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Exhibit 4.1    
    


 
  FOREST OIL CORPORATION    
    


7.25%
Senior Notes due 2019 




INDENTURE  


Dated as of June 6, 2007 




U.S.
Bank National Association 


Trustee









  



 
 

Table of Contents    
    



	 
	 	 
	 	Page

	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE	 	1
	 	
 SECTION 1.01.	
 	

DEFINITIONS	
 	

1
	 	SECTION 1.02.	 	OTHER DEFINITIONS	 	19
	 	SECTION 1.03.	 	INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT	 	20
	 	SECTION 1.04.	 	RULES OF CONSTRUCTION	 	20
	

ARTICLE II THE SECURITIES	
 	

21
	 	
 SECTION 2.01.	
 	

FORM, DATING AND TERMS	
 	

21
	 	SECTION 2.02.	 	EXECUTION AND AUTHENTICATION	 	26
	 	SECTION 2.03.	 	REGISTRAR AND PAYING AGENT	 	28
	 	SECTION 2.04.	 	PAYING AGENT TO HOLD MONEY IN TRUST	 	28
	 	SECTION 2.05.	 	SECURITYHOLDER LISTS	 	28
	 	SECTION 2.06.	 	TRANSFER AND EXCHANGE	 	28
	 	SECTION 2.07.	 	FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS	 	31
	 	SECTION 2.08.	 	FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S	 	32
	 	SECTION 2.09.	 	REPLACEMENT SECURITIES	 	33
	 	SECTION 2.10.	 	OUTSTANDING SECURITIES	 	34
	 	SECTION 2.11.	 	TEMPORARY SECURITIES	 	34
	 	SECTION 2.12.	 	CANCELLATION	 	34
	 	SECTION 2.13.	 	DEFAULTED INTEREST	 	34
	 	SECTION 2.14.	 	COMPUTATION OF INTEREST	 	35
	 	SECTION 2.15.	 	CUSIP NUMBERS	 	35
	

ARTICLE III REDEMPTION	
 	

35
	 	
 SECTION 3.01.	
 	

NOTICES TO TRUSTEE	
 	

35
	 	SECTION 3.02.	 	SELECTION OF SECURITIES TO BE REDEEMED	 	35
	 	SECTION 3.03.	 	NOTICE OF REDEMPTION	 	35
	 	SECTION 3.04.	 	EFFECT OF NOTICE OF REDEMPTION	 	36
	 	SECTION 3.05.	 	DEPOSIT OF REDEMPTION PRICE	 	36
	 	SECTION 3.06.	 	SECURITIES REDEEMED IN PART	 	36
	

ARTICLE IV COVENANTS	
 	

37
	 	
 SECTION 4.01.	
 	

PAYMENT OF SECURITIES	
 	

37
	 	SECTION 4.02.	 	SEC REPORTS	 	37
	 	SECTION 4.03.	 	LIMITATION ON INDEBTEDNESS	 	37
	 	SECTION 4.04.	 	LIMITATION ON RESTRICTED PAYMENTS	 	37
	 	SECTION 4.05.	 	LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES	 	39
	 	SECTION 4.06.	 	LIMITATION ON ASSET SALES	 	40
	 	SECTION 4.07.	 	LIMITATION ON TRANSACTIONS WITH AFFILIATES	 	42
	 	SECTION 4.08.	 	LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES	 	43
	 	SECTION 4.09.	 	CHANGE OF CONTROL	 	44
	 	SECTION 4.10.	 	LIMITATION ON LIENS	 	45
	 	 	 	 	 





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	 	SECTION 4.11.	 	COMPLIANCE CERTIFICATE	 	45
	 	SECTION 4.12.	 	FURTHER INSTRUMENTS AND ACTS	 	45
	 	SECTION 4.13.	 	FUTURE SUBSIDIARY GUARANTORS	 	45
	 	SECTION 4.14.	 	RESTRICTED AND UNRESTRICTED SUBSIDIARIES	 	45
	 	SECTION 4.15.	 	TERMINATION OF CERTAIN COVENANTS	 	46
	 	SECTION 4.16.	 	REGISTRATION DEFAULT	 	46
	

ARTICLE V SUCCESSOR COMPANY	
 	

47
	 	
 SECTION 5.01.	
 	

WHEN COMPANY MAY MERGE OR TRANSFER ASSETS	
 	

47
	

ARTICLE VI DEFAULTS AND REMEDIES	
 	

48
	 	
 SECTION 6.01.	
 	

EVENTS OF DEFAULT	
 	

48
	 	SECTION 6.02.	 	ACCELERATION	 	49
	 	SECTION 6.03.	 	OTHER REMEDIES	 	49
	 	SECTION 6.04.	 	WAIVER OF PAST DEFAULTS	 	50
	 	SECTION 6.05.	 	CONTROL BY MAJORITY	 	50
	 	SECTION 6.06.	 	LIMITATION ON SUITS	 	50
	 	SECTION 6.07.	 	RIGHTS OF HOLDERS TO RECEIVE PAYMENT	 	50
	 	SECTION 6.08.	 	COLLECTION SUIT BY TRUSTEE	 	50
	 	SECTION 6.09.	 	TRUSTEE MAY FILE PROOFS OF CLAIM	 	50
	 	SECTION 6.10.	 	PRIORITIES	 	51
	 	SECTION 6.11.	 	UNDERTAKING FOR COSTS	 	51
	 	SECTION 6.12.	 	WAIVER OF STAY OR EXTENSION LAWS	 	51
	

ARTICLE VII TRUSTEE	
 	

51
	 	
 SECTION 7.01.	
 	

DUTIES OF TRUSTEE	
 	

51
	 	SECTION 7.02.	 	RIGHTS OF TRUSTEE	 	52
	 	SECTION 7.03.	 	INDIVIDUAL RIGHTS OF TRUSTEE	 	52
	 	SECTION 7.04.	 	TRUSTEE'S DISCLAIMER	 	53
	 	SECTION 7.05.	 	NOTICE OF DEFAULTS	 	53
	 	SECTION 7.06.	 	REPORTS BY TRUSTEE TO HOLDERS	 	53
	 	SECTION 7.07.	 	COMPENSATION AND INDEMNITY	 	53
	 	SECTION 7.08.	 	REPLACEMENT OF TRUSTEE	 	54
	 	SECTION 7.09.	 	SUCCESSOR TRUSTEE BY MERGER	 	54
	 	SECTION 7.10.	 	ELIGIBILITY; DISQUALIFICATION	 	54
	 	SECTION 7.11.	 	PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY	 	55
	

ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE	
 	

55
	 	
 SECTION 8.01.	
 	

DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE	
 	

55
	 	SECTION 8.02.	 	CONDITIONS TO DEFEASANCE	 	56
	 	SECTION 8.03.	 	APPLICATION OF TRUST MONEY	 	56
	 	SECTION 8.04.	 	REPAYMENT TO THE COMPANY	 	56
	 	SECTION 8.05.	 	INDEMNITY FOR GOVERNMENT OBLIGATIONS	 	57
	 	SECTION 8.06.	 	REINSTATEMENT	 	57
	

ARTICLE IX AMENDMENTS	
 	

57
	 	
 SECTION 9.01.	
 	

WITHOUT CONSENT OF HOLDERS	
 	

57
	 	SECTION 9.02.	 	WITH CONSENT OF HOLDERS	 	57
	 	SECTION 9.03.	 	COMPLIANCE WITH TRUST INDENTURE ACT	 	58
	 	SECTION 9.04.	 	REVOCATION AND EFFECT OF CONSENTS AND WAIVERS	 	58
	 	 	 	 	 



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	 	SECTION 9.05.	 	NOTATION ON OR EXCHANGE OF SECURITIES	 	59
	 	SECTION 9.06.	 	TRUSTEE TO SIGN AMENDMENTS	 	59
	

ARTICLE X SUBSIDIARY GUARANTEES	
 	

59
	 	
 SECTION 10.01.	
 	

SUBSIDIARY GUARANTEE	
 	

59
	 	SECTION 10.02.	 	CONTRIBUTION	 	61
	 	SECTION 10.03.	 	SUCCESSORS AND ASSIGNS	 	61
	 	SECTION 10.04.	 	NO WAIVER	 	61
	 	SECTION 10.05.	 	MODIFICATION	 	61
	 	SECTION 10.06.	 	EXECUTION OF SUPPLEMENTAL INDENTURE FOR FUTURE SUBSIDIARY GUARANTORS	 	61
	

ARTICLE XI MISCELLANEOUS	
 	

62
	 	
 SECTION 11.01.	
 	

TRUST INDENTURE ACT CONTROLS	
 	

62
	 	SECTION 11.02.	 	NOTICES	 	62
	 	SECTION 11.03.	 	COMMUNICATION BY HOLDERS WITH OTHER HOLDERS	 	62
	 	SECTION 11.04.	 	CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT	 	62
	 	SECTION 11.05.	 	STATEMENTS REQUIRED IN CERTIFICATE OR OPINION	 	63
	 	SECTION 11.06.	 	WHEN SECURITIES DISREGARDED	 	63
	 	SECTION 11.07.	 	RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR	 	63
	 	SECTION 11.08.	 	LEGAL HOLIDAYS	 	63
	 	SECTION 11.09.	 	GOVERNING LAW	 	63
	 	SECTION 11.10.	 	NO RECOURSE AGAINST OTHERS	 	63
	 	SECTION 11.11.	 	SUCCESSORS	 	63
	 	SECTION 11.12.	 	MULTIPLE ORIGINALS	 	63
	 	SECTION 11.13.	 	TABLE OF CONTENTS; HEADINGS	 	64
	 	SECTION 11.14.	 	CONSENT TO JURISDICTION	 	64





EXHIBITS  



	EXHIBIT A	 	FORM OF INITIAL SECURITY AND ADDITIONAL SECURITY
	EXHIBIT B	 	FORM OF EXCHANGE SECURITY
	EXHIBIT C	 	FORM OF SUPPLEMENTAL INDENTURE




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CROSS-REFERENCE TABLE    
    



	TIA Section
 
	 	Indenture

Section

	310(a)(1)	 	7.10
	(a)(2)	 	7.10
	(a)(3)	 	N.A.
	(a)(4)	 	N.A.
	(b)	 	7.08; 8.10
	(c)	 	N.A.
	311(a)	 	7.11
	(b)	 	7.11
	(c)	 	N.A.
	312(a)	 	2.06
	(b)	 	11.03
	(c)	 	11.03
	313(a)	 	7.06
	(b)(1)	 	N.A.
	(b)(2)	 	7.06
	(c)	 	11.02
	(d)	 	7.06
	314(a)	 	4.02; 4.11 11.02
	(b)	 	N.A.
	(c)(1)	 	11.04
	(c)(2)	 	11.04
	(c)(3)	 	N.A.
	(d)	 	N.A.
	(e)	 	11.05
	(f)	 	4.11
	315(a)	 	7.01
	(b)	 	7.05; 11.02
	(c)	 	7.01
	(d)	 	7.01
	(e)	 	6.11
	316(a) (last sentence)	 	11.06
	(a)(1)(A)	 	6.05
	(a)(1)(B)	 	6.04
	(a)(2)(A)	 	N.A.
	(b)	 	6.07
	317(a)(1)	 	6.08
	(a)(2)	 	6.09
	(b)	 	2.05





N.
A. means Not Applicable. 


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


iv










        INDENTURE dated as of June 6, 2007, among Forest Oil Corporation, a New York corporation (the "COMPANY"), Forest Oil Permian Corporation, a Delaware corporation, as Subsidiary
Guarantor, and U.S. Bank National Association, as Trustee (the "TRUSTEE"). 


        Each
party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (i) the Company's 7.25% Senior Notes due 2019 (the
"Initial Securities"), (ii) if and when issued, additional 7.25% Senior Notes due 2019 in unlimited principal amount that may be offered subsequent to the Issue Date (the "Additional
Securities"), to be issued, from time to time, in one or more series as provided in this Indenture and (iii) if and when issued in exchange for Initial Securities or any Additional Securities
as provided in the Registration Rights Agreement or a similar agreement relating to Initial Securities, the Company's 7.25% Senior Notes due 2019 (the "Exchange Securities"). 


ARTICLE I  


 DEFINITIONS AND INCORPORATION BY REFERENCE  


        SECTION 1.01.    DEFINITIONS.    


        "ADDITIONAL
ASSETS" means (a) any Property (other than cash, Permitted Short-Term Investments or securities) used in the Oil and Gas Business or any business ancillary
thereto, (b) Investments in any other Person engaged in the Oil and Gas Business or any business ancillary thereto (including the acquisition from third parties of Capital Stock of such Person)
as a result of which such other Person becomes a Restricted Subsidiary in compliance with Section 4.14, (c) the acquisition from third parties of Capital Stock of a Restricted Subsidiary
or (d) Permitted Business Investments. 


        "ADDITIONAL
SECURITIES" has the meaning ascribed to it in the second introductory paragraph of this Indenture. 


        "ADJUSTED
CONSOLIDATED NET TANGIBLE ASSETS" means (without duplication), as of the date of determination, the remainder of: (a) the sum of (i) discounted future net
revenues from proved oil and gas reserves of the Company and its Restricted Subsidiaries calculated in accordance with Commission guidelines before any provincial, territorial, state, Federal or
foreign income taxes, as estimated by the Company in a reserve report prepared as of the end of the Company's most recently completed fiscal year for which audited financial statements are available,
as increased by, as of the date of determination, the estimated discounted future net revenues from (A) estimated proved oil and gas reserves acquired since such year-end, which
reserves were not reflected in such year-end reserve report, and (B) estimated oil and gas reserves attributable to upward revisions of estimates of proved oil and gas reserves
since such year-end due to exploration, development or exploitation activities, in each case calculated in accordance with Commission guidelines (utilizing the prices utilized in such
year-end reserve report), and decreased by, as of the date of determination, the estimated discounted future net revenues from (C) estimated proved oil and gas reserves produced or
disposed of since such year-end and (D) estimated oil and gas reserves attributable to downward revisions of estimates of proved oil and gas reserves since such year-end
due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, in each case calculated in accordance with Commission
guidelines (utilizing the prices utilized in such year-end reserve report); PROVIDED that, in the case of each of the determinations made pursuant to clauses (A) through (D), such
increases and decreases shall be as estimated by the Company's petroleum engineers, (ii) the capitalized costs that are attributable to oil and gas properties of the Company and its Restricted
Subsidiaries to which no proved oil and gas reserves are attributable, based on the Company's books and records as of a date no earlier than the date of the Company's latest available annual or
quarterly financial statements, (iii) the Net Working Capital on a date no earlier than the date of the Company's latest annual or quarterly financial statements and (iv) the greater of
(A) the net book value on a date no earlier than the date of the Company's latest annual or quarterly financial statements and (B) the Fair Market Value, as estimated by the Company, of
other tangible assets (including, without duplication, Investments in unconsolidated Restricted Subsidiaries) of the 







 



Company
and its Restricted Subsidiaries, as of the date no earlier than the date of the Company's latest audited financial statements, minus (b) the sum of (i) minority interests,
(ii) any net gas balancing liabilities of the Company and its Restricted Subsidiaries reflected in the Company's latest audited financial statements, (iii) to the extent included in
(a)(i) above, the discounted future net revenues, calculated in accordance with Commission guidelines (utilizing the prices utilized in the Company's year-end reserve report), attributable
to reserves which are required to be delivered to third parties to fully satisfy the obligations of the Company and its Restricted Subsidiaries with respect to Volumetric Production Payments
(determined, if applicable, using the schedules specified with respect thereto) and (iv) the discounted future net revenues, calculated in accordance with Commission guidelines, attributable to
reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the discounted future net revenues specified in
(a)(i) above, would be necessary to fully satisfy the payment obligations of the Company and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto). If the Company changes its method of accounting from the full cost method to the successful efforts method or a similar method of
accounting, "Adjusted Consolidated Net Tangible Assets" will continue to be calculated as if the Company were still using the full cost method of accounting. 


        "AFFILIATE"
of any specified Person means any other Person (a) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common
control with such specified Person. For the purposes of this definition, "control," when used with respect to any specified Person, means the power to direct the management and policies of such Person
directly or indirectly, whether through the ownership of Voting Stock, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. 


        "ASSET
SALE" means, with respect to any Person, any transfer, conveyance, sale, lease (other than an operating lease entered into in the ordinary course of business) or other disposition
(collectively, "dispositions," and including dispositions pursuant to any consolidation or merger) by such Person in any single transaction or series of transactions of (a) shares of Capital
Stock of another Person (including Capital Stock of Restricted Subsidiaries and Unrestricted Subsidiaries) or (b) any other Property of such Person; PROVIDED, HOWEVER, that the term "Asset
Sale" shall not include: (i) the disposition of Permitted Short-Term Investments, inventory, accounts receivable, surplus or obsolete equipment or other Property (excluding the
disposition of oil and gas in place and other interests in real property unless made in connection with a Permitted Business Investment) in the ordinary course of business; (ii) the
abandonment, assignment, lease, sublease or farm-out of oil and gas properties, or the forfeiture or other disposition of such properties pursuant to standard form operating agreements, in
each case in the ordinary course of business in a manner that is customary in the Oil and Gas Business; (iii) the disposition of Property received in settlement of debts owing to such Person as
a result of foreclosure, perfection or enforcement of any Lien or debt, which debts were owing to such Person in the ordinary course of its business; (iv) any disposition that constitutes a
Restricted Payment made in compliance with Section 4.04; (v) when used with respect to the Company, any disposition of all or substantially all of the Property of such Person permitted
pursuant to Article V; (vi) the disposition of any Property by such Person to the Company or a Restricted Subsidiary; (vii) the disposition of any asset with a Fair Market Value
since the Issue Date of less than $10,000,000; (viii) any Production Payments and Reserve Sales; PROVIDED that any such Production Payments and Reserve Sales, other than incentive compensation
programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to the Company or a Restricted Subsidiary, shall
have been created, incurred, issued, assumed or Guaranteed in connection with the financing of, and within 60 days after the acquisition of, the Property that is subject thereto;
(ix) the creation of a Permitted Lien and dispositions in connection with Permitted Liens; (x) dispositions of receivables in connection with the compromise, settlement or collection
thereof in the ordinary course of business or in bankruptcy or similar proceedings and 


2







 



exclusive
of factoring or similar arrangements; (xi) a surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind; or
(xii) the licensing or sublicensing of intellectual property or other general intangibles and licenses, leases or subleases of other property in the ordinary course of business which do not
materially interfere with the business of the Company and its Restricted Subsidiaries. 


        "AVERAGE
LIFE" means, with respect to any Indebtedness or Preferred Stock, at any date of determination, the quotient obtained by dividing (a) the sum of the products of
(i) the number of years (and any portion thereof) from the date of determination to the date or dates of each successive scheduled principal payment (including any sinking fund or mandatory
redemption payment requirements) of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by (ii) the amount of each such principal payment by
(b) the sum of all such payments. 


        "BANK
CREDIT FACILITIES" means, with respect to any Person, one or more debt facilities or commercial paper facilities with banks or other institutional lenders (including pursuant to
the Amended and Restated Credit Agreement dated as of September 28, 2004, as amended on October 19, 2005, December 21, 2005 and October 31, 2006, among the Company, the
Lenders named therein, Bank
of America N.A. and Citibank, N.A., as co-global syndication agents, BNP Paribas and Harris Nesbitt Financing, Inc., as co-U.S. documentation agents, and JPMorgan Chase
Bank, as global administrative agent, and the Amended and Restated Credit Agreement dated as of September 28, 2004, as amended on October 19, 2005, December 21, 2005 and
October 31, 2006, among the Company, the Lenders named therein, Bank of America, N.A. and Citibank, N.A., as co-global syndication agents, BNP Paribas and Harris Nesbitt
Financing, Inc., as co-U.S. documentation agents, and JPMorgan Chase Bank, as global administrative agent) providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or trade letters of credit, together with any
extensions, revisions, restatements, refinancings or replacements thereof by a lender or syndicate of lenders. 


        "BOARD
OF DIRECTORS" means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board. 


        "BUSINESS
DAY" means each day which is not a Legal Holiday. 


        "CANADIAN
SUBSIDIARY" means a Subsidiary organized under the laws of Canada or any province thereof. 


        "CAPITAL
LEASE OBLIGATION" means any obligation which is required to be classified and accounted for as a capital lease obligation in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment date of rent
or any other amount due in respect of such obligation. 


        "CAPITAL
STOCK" in any Person means any and all shares, interests, participations or other equivalents in the equity interest (however designated) in such Person and any rights (other
than debt securities convertible into an equity interest), warrants or options to subscribe for or to acquire an equity interest in such Person. 


        "CHANGE
OF CONTROL" means the occurrence of any of the following events: 



        (a)   any
"person" or "group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either of the foregoing, including
any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act), becomes (other than as a result of
a merger or consolidation) the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a 



3







 

Person
will be deemed to have "beneficial ownership" of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time) of
more than 50% of the total voting power of all classes of the Voting Stock of the Company or currently exercisable warrants or options to acquire such Voting Stock; 


        (b)   the
sale, lease, conveyance or transfer of all or substantially all the assets of the Company and the Restricted Subsidiaries taken as a whole (other than to any Wholly
Owned Subsidiary) shall have occurred; 


        (c)   the
shareholders of the Company shall have approved any plan of liquidation or dissolution of the Company; 



        (d)   the
Company consolidates with or merges into another Person or any Person consolidates with or merges into the Company in any such event pursuant to a transaction in
which the outstanding Voting Stock of the Company is reclassified into or exchanged for cash, securities or other property, other than any such transaction where the outstanding Voting Stock of the
Company is reclassified into or exchanged for Voting Stock of the surviving corporation that is Capital Stock and the holders of the Voting Stock of the Company immediately prior to such transaction
own, directly or indirectly, not less than a majority of the Voting Stock of the surviving corporation immediately after such transaction in substantially the same proportion as before the transaction
(for purposes of this clause (d), the holders of the Voting Stock immediately prior to such transaction shall be deemed to beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if the holders of the Voting Stock immediately prior to such transaction are the beneficial owners (as defined in clause (a) above), directly or indirectly, of more than 50%
of the voting power of the Voting Stock of such parent corporation); or 


        (e)   during
any period of two consecutive years, individuals who at the beginning of such period constituted the Company's Board of Directors (together with any new directors
whose election or appointment by such Board or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Company's Board of
Directors then in office. 




        "CODE"
means the Internal Revenue Code of 1986, as amended. 


        "COMPANY"
means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. 


        "CONSOLIDATED
INTEREST COVERAGE RATIO" means, as of the date of the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio (the "Transaction Date"),
the ratio of (a) the aggregate amount of EBITDA of the Company and its consolidated Restricted Subsidiaries for the four full fiscal quarters immediately prior to the Transaction Date for which
financial statements are available to (b) the aggregate Consolidated Interest Expense of the Company and its Restricted Subsidiaries that is anticipated to accrue during a period consisting of
the fiscal quarter in which the Transaction Date occurs and the three fiscal quarters immediately subsequent thereto (based upon the pro forma amount and maturity of, and interest payments in respect
of, Indebtedness of the Company and its Restricted Subsidiaries expected by the Company to be outstanding on the Transaction Date), assuming for the purposes of this measurement the continuation of
market interest rates prevailing on the Transaction Date and base interest rates in respect of floating interest rate obligations equal to the base interest rates on such obligations in effect as of
the Transaction Date; PROVIDED that if the Company or any of its Restricted Subsidiaries is a party to any Interest Rate Protection Agreement which would have the effect of changing the interest rate
on any Indebtedness of the Company or any of its Restricted Subsidiaries for such four quarter period (or a portion thereof), the resulting rate shall be used for such four quarter period or portion
thereof; 


4







 



PROVIDED
FURTHER that any Consolidated Interest Expense with respect to Indebtedness Incurred or retired by the Company or any of its Restricted Subsidiaries during the fiscal quarter in which the
Transaction Date occurs shall be calculated as if such Indebtedness was so Incurred or retired on the first day of the fiscal quarter in which the Transaction Date occurs. In addition, if since the
beginning of the four full fiscal quarter period preceding the Transaction Date, (i) the Company or any of its Restricted Subsidiaries shall have engaged in any Asset Sale, EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive), or increased by an amount equal to the EBITDA (if negative), directly attributable to the assets which are the subject of such
Asset Sale for such period calculated on a pro forma basis as if such Asset Sale and any related retirement of Indebtedness had occurred on the first day of such period or (ii) the Company or
any of its Restricted Subsidiaries shall have acquired any material assets or made an Investment in any Restricted Subsidiary, EBITDA shall be calculated on a pro forma basis as if such asset
acquisitions or Investment had occurred on the first day of such four fiscal quarter period. 


        "CONSOLIDATED
INTEREST EXPENSE" means with respect to any Person for any period, without duplication, (a) the sum of (i) the aggregate amount of cash and noncash interest
expense (including capitalized interest) of such Person and its Restricted Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP in respect of Indebtedness
(including (A) any amortization of debt discount, (B) net costs associated with Interest Rate Protection Agreements (including any amortization of discounts), (C) the interest
portion of any deferred payment obligation, (D) all accrued interest and (E) all commissions, discounts, commitment fees, origination fees and other fees and charges owed with respect to
any Bank Credit Facilities and other Indebtedness) paid, accrued or
scheduled to be paid or accrued during such period; (ii) Redeemable Stock dividends of such Person (and of its Restricted Subsidiaries if paid to a Person other than such Person or its
Restricted Subsidiaries) and Preferred Stock dividends of such Person's Restricted Subsidiaries if paid to a Person other than such Person or its other Restricted Subsidiaries; (iii) the
portion of any rental obligation of such Person or its Restricted Subsidiaries in respect of any Capital Lease Obligation allocable to interest expense in accordance with GAAP; (iv) the portion
of any rental obligation of such Person or its Restricted Subsidiaries in respect of any Sale and Leaseback Transaction (other than any Sale or Leaseback Transaction related to Lantern Drilling
Company) that is Indebtedness allocable to interest expense (determined as if such obligation were treated as a Capital Lease Obligation) in accordance with GAAP; and (v) to the extent any
Indebtedness of any other Person (other than Restricted Subsidiaries) is Guaranteed by such Person or any of its Restricted Subsidiaries, the aggregate amount of interest paid, accrued or scheduled to
be paid or accrued by such other Person during such period attributable to any such Indebtedness; less (b) to the extent included in (a) above, amortization or write-off of deferred
financing costs of such Person and its Restricted Subsidiaries during such period and amounts classified as other comprehensive income in the balance sheet of such Person; in the case of both
(a) and (b) above, after elimination of intercompany accounts among such Person and its Restricted Subsidiaries and as determined in accordance with GAAP. 


        "CONSOLIDATED
NET INCOME" of any Person means, for any period, the aggregate net income (or net loss, as the case may be) of such Person and its Restricted Subsidiaries for such period
on a consolidated basis, determined in accordance with GAAP; PROVIDED that there shall be excluded therefrom, without duplication, (a) items classified as extraordinary gains or losses net of
taxes (less all fees and expenses relating thereto); (b) any gain or loss net of taxes (less all fees and expenses relating thereto), realized on the sale or other disposition of Property,
including the Capital Stock of any other Person and pursuant to any Sale and Leaseback Transaction (but in no event shall this clause (b) apply to any gains or losses on the sale in the
ordinary course of business of oil, gas or other hydrocarbons produced or manufactured); (c) the net income of any Restricted Subsidiary of such specified Person to the extent the transfer to
that Person of that income is restricted by contract or otherwise, except for any cash dividends or cash distributions actually paid by such Restricted Subsidiary to such Person during such period;
(d) the net income (or loss) of any other Person in which 


5







 



such
Person or any of its Restricted Subsidiaries has an interest (which interest does not cause the net income of such other Person to be consolidated with the net income of such Person in accordance
with GAAP or is an interest in a consolidated Unrestricted Subsidiary), except to the extent of the amount of cash dividends or other cash distributions actually paid to such Person or its
consolidated Restricted Subsidiaries by such other Person during such period; (e) for the purposes of Section 4.04 only, the net income of any Person acquired by such Person or any of
its Restricted Subsidiaries in a pooling-of-interests transaction for any period prior to the date of such acquisition; (f) any gain or loss, net of taxes, realized on
the termination of any employee pension benefit plan; (g) any adjustments of a deferred tax liability or asset pursuant to Statement of Financial Accounting Standards No. 109 which
result from changes in enacted tax laws or rates; (h) the cumulative effect of a change in accounting principles; (i) any write-downs of non-current assets; PROVIDED that any
ceiling limitation write-downs under Commission guidelines shall be treated as capitalized costs, as if such write-downs had not occurred; (j) any non-cash gains or losses related
to Exchange Rate Contracts and Oil and Gas Hedging Contracts, net of taxes; (k) any non-cash gains or losses related to foreign currency exchange, net of taxes; (l) any
non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards; and (m) any expenses relating to the Forcenergy Merger, net of taxes. 


        "CORPORATE
TRUST OFFICE" means an office of the Trustee at which any particular time its corporate trust business shall be administered, which office is, as of the date of this
Indenture, located at 225 Asylum Street, Hartford, CT 06103. 


        "DEFAULT"
means any event, act or condition the occurrence of which is, or after notice or the passage of time or both would be, an Event of Default. 


        "DEFINITIVE
SECURITIES" means certificated Securities. 


        "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 Securities 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 Company to repurchase or redeem such Capital Stock upon the occurrence of a
change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with Sections 4.04, 4.06 and 4.09. 



        "DOLLAR-DENOMINATED
PRODUCTION PAYMENTS" means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations in
connection therewith. 


        "DOMESTIC
RESTRICTED SUBSIDIARY" means a Restricted Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia. 


        "DOMESTIC
SUBSIDIARY" means a Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia. 



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


        "EBITDA"
means, with respect to any Person for any period, an amount equal to the Consolidated Net Income of such Person for such period, plus (a) the sum of, to the extent
reflected in the consolidated income statement of such Person and its Restricted Subsidiaries for such period from which Consolidated Net Income is determined and deducted in the determination of such
Consolidated Net Income, without duplication, (i) consolidated income tax expense, (ii) Consolidated Interest 


6







 



Expense,
(iii) consolidated depreciation and depletion expense, (iv) consolidated amortization expense or impairment charges and (v) consolidated exploration expense (if
applicable), and (vi) any other non-cash charges reducing Consolidated Net Income; less (b) the sum of, to the extent reflected in the consolidated income statement of such
Person and its Restricted Subsidiaries for such period from which Consolidated Net Income is determined and added in the determination of such Consolidated Net Income, without duplication, income tax
recovery (excluding, however, income tax recovery relating to sales or other dispositions of Property, including the Capital Stock of any other Person, the losses from which are excluded in the
determination of such Consolidated Net Income) and other non-cash items increasing Consolidated Net Income. 


        "EQUITY
OFFERING" means any public or private sale of Capital Stock (other than Disqualified Stock) made for cash on a primary basis by the Company after the Issue Date, provided that at
any time on or after Change of Control, any sale of Capital Stock to an Affiliate of the Company shall not be deemed an Equity Offering. 


        "EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder. 


        "EXCHANGE
SECURITIES" has the meaning ascribed to it in the second introductory paragraph of this Indenture. 


        "EXCHANGED
PROPERTIES" means properties used or useful in the Oil and Gas Business received by the Company or a Restricted Subsidiary in trade or as a portion of the total consideration
for other such properties or assets. 


        "EXCHANGE
RATE CONTRACT" means, with respect to any Person, any currency swap agreements, forward exchange rate agreements, foreign currency futures or options, exchange rate collar
agreements, exchange rate insurance and other agreements or arrangements, or any combination thereof, entered into by such Person in the ordinary course of its business for the purpose of limiting or
managing exchange rate risks to which such Person is subject. 


        "FAIR
MARKET VALUE" means, with respect to any assets to be transferred pursuant to any Asset Sale or Sale and Leaseback Transaction or any non-cash consideration or property
transferred or received by any Person, the fair market value of such consideration or other property as determined in good faith by (a) any officer of the Company if such fair market value is
less than $25,000,000 and (b) the Board of Directors of the Company as evidenced by a certified resolution delivered to the Trustee if such fair market value is equal to or in excess of
$25,000,000. Any such determinations shall be conclusive in the absence of manifest error. 


        "FORCENERGY
MERGER" means the transactions contemplated by the Agreement and Plan of Merger, dated as of July 10, 2000, among the Company, Forest Acquisition I Corporation,
a Delaware corporation and Forcenergy Inc., a Delaware corporation. 


        "GAAP"
means U.S. generally accepted accounting principles as in effect from time to time, unless stated otherwise. 



        "GOVERNMENT
OBLIGATIONS" means securities that are (a) direct obligations of the United States or Canada for the timely payment of which the full faith and credit of the United
States or Canada is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States or Canada, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States or Canada which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian, with respect to any such Government Obligation or a specific payment of
principal of or interest on any such Government Obligation held by such custodian for the account of the holder of such depository receipt; PROVIDED, HOWEVER, that (except as required by law) such
custodian is not authorized to make 


7







 



any
deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of principal of
or interest on the Government Obligation evidenced by such depository receipt. 



        "GUARANTEE"
by any Person means any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and including any Lien on the assets of such Person securing obligations to pay Indebtedness of the primary obligor and any
obligation of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase or
payment of) any security for the payment of such Indebtedness, (b) to purchase Property, securities or services for the purpose of assuring the holder of such Indebtedness of the payment of
such Indebtedness or (c) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness (and "GUARANTEED", "GUARANTEEING" and "GUARANTOR" shall have meanings correlative to the foregoing);
PROVIDED, HOWEVER, that a Guarantee by any Person shall not include (i) endorsements by such Person for collection or deposit, in either case, in the ordinary course of business or
(ii) a contractual commitment by one Person to invest in another Person for so long as such Investment is reasonably expected to constitute a Permitted Investment under clause (e) of the
definition of Permitted Investments. 


        "HOLDER"
or "SECURITYHOLDER" means the Person in whose name a Security is registered on the Note Register. 



        "INCUR"
means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, Guarantee or become liable in
respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or obligation on the balance sheet of such Person (and
"INCURRENCE", "INCURRED" and "INCURRING" shall have meanings correlative to the foregoing); PROVIDED, HOWEVER, that (a) change in GAAP that results in an obligation of such Person that exists
at such time, and is not theretofore classified as Indebtedness, becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness. For purposes of this definition, Indebtedness of the
Company held by a Restricted Subsidiary or Indebtedness of a Restricted Subsidiary held by another Restricted Subsidiary shall be deemed to be Incurred by the issuer of such Indebtedness in the event
the Restricted Subsidiary holding such Indebtedness ceases to be a Restricted Subsidiary or in the event such Indebtedness is transferred to a Person other than the Company or a Restricted Subsidiary.
For purposes of this definition, any non-interest bearing or other Indebtedness shall be deemed to have been Incurred (in an amount equal to its aggregate principal amount at its Stated
Maturity) only on the date of original issue thereof. 


        "INDEBTEDNESS"
means at any time (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person, and whether or not contingent,
(a) any obligation of such Person for borrowed money, (b) any obligation of such Person evidenced by bonds, debentures, notes, Guarantees or other similar instruments, including any such
obligations Incurred in connection with the acquisition of Property, assets or businesses, (c) any reimbursement obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (d) any obligation of such Person issued or assumed as the deferred purchase price of Property or services (other than
Trade Accounts Payable), (e) any Capital Lease Obligation of such Person, (f) the maximum fixed redemption or repurchase price of Redeemable Stock of such Person at the time of
determination, (g) any payment obligation of such Person under Exchange Rate Contracts, Interest Rate Protection Agreements, Oil and Gas Hedging Contracts or under any similar agreements or
instruments, (h) any obligation to pay rent or other payment amounts of such Person with respect to any Sale and Leaseback Transaction to which such Person is a party and (i) any 


8







 



obligation
of the type referred to in clauses (a) through (h) of this paragraph of another Person and all dividends of another Person the payment of which, in either case, such Person has
Guaranteed or is responsible or liable, directly or indirectly, as obligor, Guarantor or otherwise; PROVIDED, HOWEVER, that Indebtedness shall not include Production Payments and Reserve Sales. For
purposes of this definition, the maximum fixed repurchase price of any Redeemable Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Redeemable
Stock as if such Redeemable Stock were repurchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture; PROVIDED, HOWEVER, that if such Redeemable Stock is
not then permitted to be repurchased, the repurchase price shall be the book value of such Redeemable Stock. The amount of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional obligations as described above and the maximum liability at such date in respect of any contingent obligations described above; PROVIDED, HOWEVER, that money borrowed
and set aside at the time of the Incurrence of any Indebtedness in order to pre-fund the payment of interest on such Indebtedness shall not be deemed to be "Indebtedness" provided that
such money is held to secure the payment of such interest. IN ADDITION, "Indebtedness" of any Person shall include Indebtedness described in the initial paragraph of this definition that would not
appear as a liability on the balance sheet of such Person if: (a) such Indebtedness is the obligation of a partnership or joint venture that is not a Restricted Subsidiary (a "Joint Venture");
(b) such Person or a Restricted Subsidiary of such Person is a general partner of the Joint Venture (a "General Partner"); and (c) there is recourse, by contract or operation of law,
with respect to the payment of such Indebtedness to Property of such Person or a Restricted Subsidiary of such Person; and then such Indebtedness shall be included in an amount not to exceed:
(i) the lesser of (a) the net assets of the General Partner and (b) the amount of such obligations to the extent that there is recourse, by contract or operation of law, to the
Property of such Person or a Restricted Subsidiary of such Person; or (ii) if less than the amount determined pursuant to clause (i) immediately above, the actual amount of such
Indebtedness that is recourse to such Person or a Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a writing and is for a determinable amount. 


        "INDENTURE"
means this Indenture as amended or supplemented from time to time. 


        "INITIAL
SECURITIES" has the meaning ascribed to it in the second introductory paragraph of this Indenture. 


        "INTEREST
RATE PROTECTION AGREEMENT" means, with respect to any Person, any interest rate swap agreement, forward rate agreement, interest rate cap or collar agreement or other financial
agreement or arrangement entered into by such Person in the ordinary course of its business for the purpose of limiting or managing interest rate risks to which such Person is subject. 


        "INVESTMENT"
means, with respect to any Person (a) any amount paid by such Person, directly or indirectly, to any other Person for Capital Stock of, or as a capital contribution
to, any other Person or (b) any direct or indirect loan or advance to any other Person (other than accounts receivable of such Person arising in the ordinary course of business); PROVIDED,
HOWEVER, that Investments shall not include (i) in the case of clause (a) as used in the definition of "Restricted Payments" only, any such amount paid through the issuance of Capital
Stock of the Company; (ii) Permitted Hedging Agreement entered into in the ordinary course of business and in compliance with this Indenture; and (iii) in the case of clause (a)
or (b), extensions of trade credit on commercially reasonable terms in accordance with normal trade practices and any increase in the equity ownership in any Person resulting from retained earnings of
such Person. 


        "INVESTMENT
GRADE RATING" means BBB- or above, in the case of S&P (or its equivalent under any successor rating categories of S&P), Baa3 or above, in the case of Moody's (or
its equivalent under any successor rating categories of Moody's) and the equivalent in respect of the rating categories of any Rating Agencies substituted for S&P or Moody's. 


9







 



        "ISSUE
DATE" means the date on which the Initial Securities will be first issued under this Indenture. 


        "LIEN"
means, with respect to any Property, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, lien (statutory or other), charge,
easement, encumbrance, preference, priority or other security or similar agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such Property (including any
conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing). For purposes of Section 4.10, a Capital Lease Obligation shall be
deemed to be secured by a Lien on the Property being leased. 


        "LIQUID
SECURITIES" means securities (a) of an issuer that is not an Affiliate of the Company, (b) that are publicly traded on the New York Stock Exchange, the American
Stock Exchange, the Toronto Stock Exchange or the Nasdaq National Market and (c) as to which the Company or the
Restricted Subsidiary holding such securities is not subject to any restrictions on sale or transfer (including any volume restrictions under Rule 144 under the Securities Act or any other
restrictions imposed by the Securities Act) or as to which a registration statement under the Securities Act covering the resale thereof is in effect for as long as the securities are held; PROVIDED
that securities meeting the requirements of clauses (a), (b) and (c) above shall be treated as Liquid Securities from the date of receipt thereof until and only until the earlier of
(i) the date on which such securities are sold or exchanged for cash or Permitted Short Term Investments and (ii) 180 days following the date of receipt of such securities. If
such securities are not sold or exchanged for cash or Permitted Short-Term Investments within 180 days of receipt thereof, for purposes of determining whether the transaction
pursuant to which the Company or a Restricted Subsidiary received the securities was in compliance with Section 4.06, such securities shall be deemed not to have been Liquid Securities at any
time. 


        "MERGER"
means the merger contemplated by the Merger Agreement. 


        "MERGER
AGREEMENT" means the Agreement and Plan of Merger by and among the Company, MJCO Corporation and The Houston Exploration Company dated as of January 7, 2007 as amended. 


        "MOODY'S"
means Moody's Investors Service, Inc. 


        "NET
AVAILABLE CASH" from an Asset Sale means cash proceeds received therefrom (including (a) any cash proceeds received by way of deferred payment of principal pursuant to a note
or installment receivable or otherwise, but only as and when received and (b) the Fair Market Value of Liquid Securities and Permitted Short-Term Investments, and excluding
(i) any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the Property that is the subject of such Asset Sale or
received in any other non-cash form and (ii) except to the extent subsequently converted to cash, Liquid Securities or Permitted Short-Term Investments within
240 days after such Asset Sale, consideration constituting Exchanged Properties or consideration other than as identified in the immediately preceding clauses (a) and (b)), in each case
net of (A) all legal, title and recording expenses, commissions and other fees and expenses incurred, and all federal, state, foreign and local taxes required to be paid or accrued as a
liability under GAAP (after taking into account any available tax credits or deductions and any tax sharing agreements) as a consequence of such Asset Sale, (B) all payments made on any
Indebtedness (but specifically excluding Indebtedness of the Company and its Restricted Subsidiaries assumed in connection with or in anticipation of such Asset Sale) which is secured by any assets
subject to such Asset Sale, in accordance with the terms of any Lien upon such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Sale or by applicable law, be
repaid out of the proceeds from such Asset Sale; PROVIDED that such payments are made in a manner that results in the permanent reduction in the balance of such Indebtedness and, if applicable, a
permanent reduction in any 


10







 



outstanding
commitment for future incurrences of Indebtedness thereunder, (C) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint
ventures as a result of such Asset Sale and (D) the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with
the assets disposed of in such Asset Sale and retained by the Company or any Restricted Subsidiary after such Asset Sale; PROVIDED, HOWEVER, that if any consideration for an Asset Sale (which would
otherwise constitute Net Available Cash) is required to be held in escrow pending determination of whether a purchase price adjustment will be made, such consideration (or any portion thereof) shall
become Net Available Cash only at such time as it is released to the Company or any Restricted Subsidiary from escrow. 



        "NET
WORKING CAPITAL" means (a) all current assets of the Company and its Restricted Subsidiaries, less (b) all current liabilities of the Company and its
Restricted Subsidiaries, except current liabilities included in Indebtedness, in each case as set forth in consolidated financial statements of the Company prepared in accordance with GAAP. 


        "NON-RECOURSE
PURCHASE MONEY INDEBTEDNESS" means Indebtedness (other than Capital Lease Obligations) of the Company or any Restricted Subsidiary Incurred in connection with
the acquisition by the Company or such Restricted Subsidiary in the ordinary course of business of fixed assets used in the Oil and Gas Business (including office buildings and other real property
used by the Company or such Restricted Subsidiary in conducting its operations) with respect to which (a) the holders of such Indebtedness agree that they will look solely to the fixed assets
so acquired which secure such Indebtedness, and neither the Company nor any Restricted Subsidiary (i) is directly or indirectly liable for such Indebtedness or (ii) provides credit
support, including any undertaking, Guarantee, indemnity agreement or instrument that would constitute Indebtedness (other
than the grant of a Lien on such acquired fixed assets), and (b) no default or event of default with respect to such Indebtedness would cause, or permit (after notice or passage of time or
otherwise), any holder of any other Indebtedness of the Company or a Restricted Subsidiary to declare a default or event of default on such other Indebtedness or cause the payment, repurchase,
redemption, defeasance or other acquisition or retirement for value thereof to be accelerated or payable prior to any scheduled principal payment, scheduled sinking fund payment or maturity. 


        "NOTE
REGISTER" means the register of Securities, maintained by the Trustee, pursuant to Section 2.03. 


        "OFFICER"
means the Chairman, the President, the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer or the Treasurer or the Secretary of the Company. 


        "OFFICERS'
CERTIFICATE" means a certificate signed by (a) the President or the Chief Executive Officer and (b) the Chief Financial Officer, the Chief Accounting Officer or
the Treasurer of the Company and delivered to the Trustee, which shall comply with this Indenture. 


        "OIL
AND GAS BUSINESS" means the business of exploiting, exploring for, developing, acquiring, operating, producing, processing, gathering, marketing, storing, selling, hedging,
treating, swapping, refining and transporting hydrocarbons and other related energy businesses. 


        "OIL
AND GAS HEDGING CONTRACT" means, with respect to any Person, any agreement or arrangement, or any combination thereof, relating to oil and gas or other hydrocarbon prices,
transportation or basis costs or differentials or other similar financial factors, that is customary in the Oil and Gas Business and is entered into by such Person in the ordinary course of its
business for the purpose of limiting or managing risks associated with fluctuations in such prices, costs, differentials or similar factors. 


        "OPINION
OF COUNSEL" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company. 


11







 



        "PARI
PASSU INDEBTEDNESS" means any Indebtedness of the Company or a Subsidiary Guarantor that is pari passu in right of payment to the
Securities or a Subsidiary Guarantee, as applicable. 


        "PARI
PASSU OFFER" means an offer by the Company or a Subsidiary Guarantor to purchase all or a portion of Pari Passu Indebtedness to the extent required by the indenture or other
agreement or instrument pursuant to which such Pari Passu Indebtedness was issued. 


        "PERMITTED
BUSINESS INVESTMENTS" means Investments and expenditures made in the ordinary course of, and of a nature that is or shall have become customary in, the Oil and Gas Business as
a means of actively engaging therein through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory requirements regarding local ownership
or satisfy other objectives customarily achieved through the conduct of Oil and Gas Business jointly with third parties, including (a) ownership interests in oil and gas properties or
gathering, transportation, processing, storage or related systems and (b) Investments and expenditures in the form of or pursuant to operating agreements, processing agreements,
farm-in agreements, farm-out agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling arrangements, joint bidding agreements,
service contracts, joint venture agreements, partnership agreements (whether general or limited), and other similar agreements (including for limited liability companies) with third parties, excluding
however, Investments in corporations other than Restricted Subsidiaries. 


        "PERMITTED
HEDGING AGREEMENTS" means (a) Exchange Rate Contracts and Oil and Gas Hedging Contracts and (b) Interest Rate Protection Agreements but only to the extent that
the stated aggregate notional amount thereunder does not exceed 100% of the aggregate principal amount of the Indebtedness of the Company or a Restricted Subsidiary covered by such Interest Rate
Protection Agreements at the time such agreements were entered into. 


        "PERMITTED
INDEBTEDNESS" means any and all of the following: (i) Indebtedness arising under this Indenture with respect to the Initial Securities and any Subsidiary Guarantees
relating thereto, and the related Exchange Securities and exchange guarantees issued in a registered exchange offer pursuant to a Registration Rights Agreement; (ii) Indebtedness under Bank
Credit Facilities; PROVIDED that the aggregate principal amount of all Indebtedness under Bank Credit Facilities Incurred pursuant to this clause, together with all Indebtedness Incurred pursuant to
clause (x) of this paragraph in respect of Indebtedness previously Incurred under Bank Credit Facilities, at any one time outstanding does not exceed the greater of (a) $1,200,000,000,
which amount shall be permanently reduced by the amount of Net Available Cash from Asset Sales (1) used to permanently repay Indebtedness under Bank Credit Facilities and not subsequently
reinvested in Additional Assets or (2) used to permanently reduce other Indebtedness to the extent permitted pursuant to Section 4.06 and (b) an amount equal to the sum of
(1) $150,000,000 and (2) 25% of Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness; (iii) Indebtedness to the Company or
any Restricted Subsidiary by any of its Restricted Subsidiaries or Indebtedness of the Company to any of its Restricted Subsidiaries (but only so long as such Indebtedness is held by the Company or a
Restricted Subsidiary); (iv) Indebtedness in respect of bid, performance, reimbursement or surety obligations issued by or for the account of the Company or any Restricted Subsidiary in the
ordinary course of business, including Guarantees and letters of credit functioning as or supporting such bid, performance, reimbursement or surety obligations (in each case other than for an
obligation for money borrowed); (v) Indebtedness under Permitted Hedging Agreements; (vi) in-kind obligations relating to oil or gas balancing positions arising in the
ordinary course of business; (vii) Indebtedness outstanding on the Issue Date not otherwise permitted in clauses (i) through (vi) above; (viii) Non-recourse Purchase
Money Indebtedness; (ix) Indebtedness not otherwise permitted to be Incurred pursuant to this paragraph (excluding any Indebtedness Incurred pursuant to clause (a) of  Section 4.03);
PROVIDED that the aggregate principal amount of all Indebtedness Incurred pursuant 


12







 



to
this clause (ix), together with all Indebtedness Incurred pursuant to clause (x) of this paragraph in respect of Indebtedness previously Incurred pursuant to this clause (ix),
at any one time outstanding does not exceed $100,000,000; (x) Indebtedness Incurred in exchange for, or the proceeds of which are used to refinance, (a) Indebtedness referred to in
clauses (i), (ii), (vii), (viii) and (ix) of this paragraph (including Indebtedness previously Incurred pursuant to this clause (x)) and (b) Indebtedness Incurred pursuant to
clause (a) of Section 4.03; PROVIDED that, in the case of each of the foregoing clauses (a) and (b), such Indebtedness is Permitted
Refinancing Indebtedness; and (xi) Indebtedness consisting of obligations in respect of purchase price adjustments, indemnities or Guarantees of the same or similar matters in connection with
the acquisition or disposition of Property. For purposes of determining compliance with Section 4.03. In the event that an item of Indebtedness (including Indebtedness Incurred by the Company
to banks or other lenders) could be Incurred pursuant to more than one of the clauses in this paragraph or Section 4.03(a), the Company, in its
sole discretion, may classify such item of Indebtedness on the date of its Incurrence, or later reclassify it, and will only be required to include the amount and type of such Indebtedness in (and to
have Incurred such Indebtedness pursuant to) one of the clauses in this paragraph or Section 4.03(a); and an item of Indebtedness (including
Indebtedness Incurred by the Company to banks or other lenders) may for this purpose be divided into more than one of the types of Indebtedness described in this paragraph or  Section 4.03(a). For
purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was
Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; PROVIDED that if such Indebtedness is Incurred to refinance other Indebtedness denominated
in a foreign currency and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in
effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not
exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this definition or Section 4.03, the
maximum amount of Indebtedness that the Company may Incur pursuant to Section 4.03 shall not be deemed to be exceeded solely as a result of
fluctuations in the exchange rate of currencies. The principal amount of any Permitted Refinancing Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be
calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. 



        "PERMITTED
INVESTMENTS" means any and all of the following: (a) Permitted Short-Term Investments; (b) Investments in property, plant and equipment used in the
ordinary course of business and Permitted Business Investments; (c) Investments by any Restricted Subsidiary in the Company; (d) Investments by the Company or any Restricted Subsidiary
in any Restricted Subsidiary; (e) Investments by the Company or any Restricted Subsidiary in (i) any Person that will, upon the making of such Investment, become a Restricted Subsidiary
or (ii) any Person if as a result of such Investment such Person is merged or consolidated with or into, or transfers or conveys all or substantially all its Property to, the Company or a
Restricted Subsidiary; (f) Investments in the form of securities received from Asset Sales; PROVIDED that such Asset Sales are made in compliance with Section 4.06;
(g) Investments in negotiable instruments held for collection; lease, utility and other similar deposits; and stock, obligations or other securities received in settlement of debts (including
under any bankruptcy or other similar proceeding) owing to the Company or any of its Restricted Subsidiaries as a result of foreclosure, perfection or enforcement of any Liens or Indebtedness, in each
of the foregoing cases in the ordinary course of business of the Company or such Restricted Subsidiary; (h) relocation allowances for, and advances and loans to, officers, directors and
employees of the Company or any of its Restricted Subsidiaries; PROVIDED such items do not exceed in the aggregate $10,000,000 at any one time outstanding; (i) Investments intended to promote
the Company's strategic 


13







 



objectives
in the Oil and Gas Business in an aggregate amount not to exceed 10% of the Adjusted Consolidated Net Tangible Assets (determined as of the date of the making of any such Investment) at any
one time outstanding (which Investments shall be deemed to be no longer outstanding only upon the return of capital thereof); (j) Investments made for the purpose of acquiring gas marketing
contracts in an aggregate amount not to exceed $25,000,000 at any one time outstanding; and (k) Investments pursuant to any agreement or obligation of the Company or any of its Restricted
Subsidiaries as in effect on the Issue Date (other than Investments described in clauses (a) through (j) above). 



        "PERMITTED
LIENS" means any and all of the following: (a) Liens securing Indebtedness incurred under Bank Credit Facilities pursuant to Section 4.03; PROVIDED, HOWEVER,
that in the event all the conditions described under Section 4.15 shall have been satisfied and the Company and its Restricted Subsidiaries shall no longer be subject to the provisions of this
Indenture terminated in accordance with such provision, Liens securing Indebtedness under the Bank Credit Facilities shall no longer be deemed to be Permitted Liens by reason of this
clause (a); (b) Liens securing the Securities, any Subsidiary Guarantees and other obligations arising under this Indenture; (c) any Lien existing on any Property of a Person at
the time such Person is merged or consolidated with or into the Company or a Restricted Subsidiary or becomes a Restricted Subsidiary (and not incurred in anticipation of or in
connection with such transaction); PROVIDED that such Liens are not extended to other Property of the Company or its Restricted Subsidiaries; (d) any Lien existing on any Property at the time
of the acquisition thereof (and not incurred in anticipation of or in connection with such transaction); PROVIDED that such Liens are not extended to other Property of the Company or its Restricted
Subsidiaries; (e) Liens securing Permitted Hedging Agreements of the Company and its Restricted Subsidiaries; (f) Liens securing purchase money Indebtedness, Sale and Leaseback
Transactions or Capital Lease Obligations; PROVIDED that such Liens attach only to the Property acquired with the proceeds of such purchase money Indebtedness or the Property which is the subject of
such Sale and Leaseback Transactions or Capital Lease Obligations; (g) Liens securing Non-Recourse Purchase Money Indebtedness granted in connection with the acquisition by the
Company or any Restricted Subsidiary in the ordinary course of business of fixed assets used in the Oil and Gas Business (including office buildings and other real property used by the Company or such
Restricted Subsidiary in conducting its operations); PROVIDED that (i) such Liens attach only to the fixed assets acquired with the proceeds of such Non-Recourse Purchase Money
Indebtedness and (ii) such Non-Recourse Purchase Money Indebtedness is not in excess of the purchase price of such fixed assets; (h) Liens resulting from the deposit of funds
or evidences of Indebtedness in trust for the purpose of decreasing, satisfying and discharging, or legally defeasing Indebtedness of the Company or any Restricted Subsidiary so long as such deposit
of funds is permitted under Section 4.04; (i) Liens resulting from a pledge of Capital Stock of a Person that is not a Restricted Subsidiary to secure obligations of such Person and any
refinancings thereof; (j) Liens to secure any permitted extension, renewal, refinancing, refunding or exchange (or successive extensions, renewals, refinancings, refundings or exchanges) in
whole or in part, of or for any Indebtedness secured by Liens referred to in clauses (a), (b), (c), (d), (f) and (g) above; PROVIDED, HOWEVER, that (i) such new Lien shall be limited to
all or part of the same Property (including future improvements thereon and accessions thereto) subject to the original Lien and (ii) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, the committed amount of the Indebtedness secured by such original Lien immediately prior to
such extension, renewal, refinancing, refunding or exchange and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension,
renewal or replacement; (k) Liens in favor of the Company or a Restricted Subsidiary; and (l) Liens not otherwise permitted by clauses (a) through (k) above securing Indebtedness
having an aggregate principal amount not in excess of $25,000,000 at any one time outstanding. 


14









   
        "PERMITTED REFINANCING INDEBTEDNESS" means Indebtedness ("new Indebtedness") Incurred in exchange for, or proceeds of which are used to refinance, other Indebtedness ("old
Indebtedness"); PROVIDED, HOWEVER, that (a) such new Indebtedness is in an aggregate principal amount not in excess of the sum of (i) the aggregate principal amount then outstanding of
the old Indebtedness (or, if such old Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as
of the date of determination), and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such exchange or refinancing, (b) such new Indebtedness has a
Stated Maturity no earlier than the Stated Maturity of the old Indebtedness, (c) such new Indebtedness has an Average Life at the time such new Indebtedness is Incurred that is equal to or
greater than the Average Life of the old Indebtedness at such time, (d) such new Indebtedness is subordinated in right of payment to the Securities (or, if applicable, the relevant Subsidiary
Guarantee) to at least the same extent, if any, as the old Indebtedness, (e) if such old Indebtedness is Non-Recourse Purchase Money Indebtedness or Indebtedness that refinanced
Non-Recourse Purchase Money Indebtedness, such new Indebtedness satisfies clauses (a) and (b) of the definition of "Non-Recourse Purchase Money Indebtedness" and
(f) such new Indebtedness is not incurred by a Restricted Subsidiary which thereafter will not be a Subsidiary Guarantor to refinance old Indebtedness of the Company or a Subsidiary Guarantor. 


        "PERMITTED
SHORT-TERM INVESTMENTS" means (a) Investments in Government Obligations maturing within one year of the date of acquisition thereof; (b) Investments
in demand accounts, time deposit accounts, certificates of deposit, bankers' acceptances and money market deposits maturing within one year of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America or any State thereof or the District of Columbia or Canada or any Province thereof that is a member of the Federal Reserve
System or comparable Canadian system and has capital, surplus and undivided profits aggregating in excess of $500,000,000 and whose long-term Indebtedness is rated "A" (or such similar
equivalent rating), or higher, according to Moody's or Dominion Bond Rating Service Limited or Canadian Bond Rating Service, Inc.; (c) Investments in deposits available for withdrawal on
demand with any commercial bank that is organized under the laws of any country in which the Company or any Restricted Subsidiary maintains an office or is engaged in the Oil and Gas Business;
PROVIDED that (i) all such deposits have been made in such accounts in the ordinary course of business and (ii) such deposits do not at any one time exceed $20,000,000 in the aggregate,
(d) repurchase and reverse repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (a) entered into with a bank meeting
the qualifications described in clause (b), (e) Investments in commercial paper or notes, maturing not more than one year after the date of acquisition, issued by a corporation (other
than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any State thereof or the District of Columbia, or Canada or any Province thereof, with a
short-term rating at the time as of which any Investment therein is made of "P-2" (or higher) according to Moody's or "A-2" (or higher) according to S&P or
"R-1" (or higher) by Dominion Bond Rating Service Limited or Canadian Bond Rating Service, Inc. (in the case of a Canadian issuer) or a long-term rating at the time as
of which any Investment therein is made of "A3" (or higher) according to Moody's or "A-" (or higher) according to S&P or such similar equivalent rating (or higher) by Dominion Bond Rating
Service Limited or Canadian Bond Rating Service, Inc. (in the case of a Canadian issuer), (f) Investments in any money market mutual fund having assets in excess of $250,000,000
substantially all of whose assets consist of other obligations of the types described in clauses (a), (b) and (d) hereof and (g) Investments in asset-backed securities maturing within one year
of the date of acquisition thereof with a long-term rating at the time as of which any Investment therein is made of "A3" (or higher) according to Moody's or "A-1" (or higher)
according to S&P or such similar equivalent rating (or higher) by Dominion Bond Rating Service Limited or Canadian Bond Rating Service, Inc. (in the case of a Canadian issuer). 


15







 



        "PERSON"
means any individual, corporation, partnership, joint venture, limited liability company, unlimited liability company, trust, estate, unincorporated organization or government
or any agency or political subdivision thereof. 


        "PREFERRED
STOCK" of any Person means Capital Stock of such Person of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution
of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person; PROVIDED, HOWEVER, that "Preferred
Stock" shall not include Redeemable Stock. 


        "PRODUCTION
PAYMENTS AND RESERVE SALES" means the grant or transfer by the Company or a Restricted Subsidiary to any Person of a royalty, overriding royalty, net profits interest,
production payment (whether volumetric or dollar denominated), partnership or other interest in oil and gas properties, reserves or the right to receive all or a portion of the production or the
proceeds from the sale of production attributable to such properties where the holder of such interest has recourse solely to such production or proceeds of production, subject to the obligation of
the grantor or transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner or other customary standard or subject to the obligation
of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers pursuant to incentive compensation
programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists or other providers of technical services to the Company or a Restricted Subsidiary. 


        "PROPERTY"
means, with respect to any Person, any interest of such Person in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including Capital
Stock and other securities issued by any other Person (but excluding Capital Stock or other securities issued by such first mentioned Person). 


        "QIB"
means any "qualified institutional buyer" (as defined in Rule 144A under the Securities Act). 


        "RATING
AGENCIES" means (a) S&P and Moody's or (b) if S&P or Moody's or both of them are not making ratings of the Securities publicly available, a nationally recognized
U.S. rating agency or agencies, as the case may be, selected by the Company, which will be substituted for S&P or Moody's or both, as the case may be. 



        "REDEEMABLE
STOCK" of any Person means any Capital Stock of such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable),
or otherwise (including on the happening of an event), is or could become required to be redeemed for cash or other Property or is or could become redeemable for cash or other Property at the option
of the holder thereof, in whole or in part, on or prior to the first anniversary of the Stated Maturity of the Securities; or is or could become exchangeable at the option of the holder thereof for
Indebtedness of the Company or any of its Restricted Subsidiaries at any time in whole or in part, on or prior to the first anniversary of the Stated Maturity of the Securities; PROVIDED, HOWEVER,
that Redeemable Stock shall not include any security by virtue of the fact that it may be exchanged or converted at the option of the holder for Capital Stock of the Company having no preference as to
dividends or liquidation over any other Capital Stock of the Company. 


        "REFERENCE
DATE" means September 30, 2000. 


        "REGISTRATION
RIGHTS AGREEMENT" means that certain registration rights agreement dated as of the Issue Date by and among the Company, the Subsidiary Guarantors and the initial purchasers
set forth therein and, with respect to any Additional Securities, one or more substantially similar registration rights agreements among the Company and the other parties thereto, as such agreements
may be amended from time to time. 


16







 



        "RESTRICTED
PAYMENT" means (a) a dividend or other distribution declared or paid on the Capital Stock of the Company or to the Company's shareholders (other than dividends,
distributions or payments made solely in Capital Stock of the Company), or declared and paid to any Person other than the Company or any of its Restricted Subsidiaries (and, if such Restricted
Subsidiary is not a Wholly Owned Subsidiary, to the other holders of the Capital Stock of such Restricted Subsidiary on a pro rata basis) on the Capital Stock of any Restricted Subsidiary,
(b) a payment made by the Company or any of its Restricted Subsidiaries (other than to the Company or any Restricted Subsidiary) to purchase, redeem, acquire or retire any Capital Stock of the
Company or of a Restricted Subsidiary, (c) a payment made by the Company or any of its Restricted Subsidiaries to redeem, repurchase, legally defease or otherwise acquire or retire for value
(including pursuant to mandatory repurchase covenants), prior to any scheduled maturity, scheduled sinking fund or scheduled mandatory redemption, any Subordinated Indebtedness, PROVIDED that this
clause (c) shall not include any such payment with respect to (i) any such Subordinated Indebtedness to the extent of Excess Proceeds remaining after compliance with Section 4.06
and to the extent required by the indenture or other agreement or instrument pursuant to which such Subordinated Indebtedness was issued or (ii) the purchase, repurchase or other acquisition of
any such Subordinated Indebtedness acquired in anticipation of satisfying a scheduled maturity, scheduled sinking fund or scheduled mandatory redemption, in each case due within one year of the date
of acquisition, or (d) an Investment (other than a Permitted Investment) by the Company or a Restricted Subsidiary in any Person. 


        "RESTRICTED
PERIOD" means the 40 consecutive days beginning on and including the later of (A) the day on which the Initial Securities are offered to Persons other than
distributors (as defined in Regulation S under the Securities Act) and (B) the Issue Date. 



        "RESTRICTED
SECURITIES LEGEND" means the Private Placement Legend set forth in clause (i) of Section 2.01(c) or the Regulation S Legend set forth in
clause (ii) of Section 2.01(c), as applicable. 


        "RESTRICTED
SUBSIDIARY" means any Subsidiary of the Company that is not an Unrestricted Subsidiary. 


        "S&P"
means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors. 


        "SALE
AND LEASEBACK TRANSACTION" means, with respect to any Person, any direct or indirect arrangement (excluding, however, any such arrangement between such Person and a Restricted
Subsidiary of such Person or between one or more Restricted Subsidiaries of such Person) pursuant to which Property is sold or transferred by such Person or a Restricted Subsidiary of such Person and
is thereafter leased back from the purchaser or transferee thereof by such Person or one of its Restricted Subsidiaries. 


        "SEC"
means the Securities and Exchange Commission. 


        "SECURITIES"
means the collective reference to the Initial Securities, Additional Securities and Exchange Securities. 


        "SECURITIES
ACT" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 



        "SECURITIES
CUSTODIAN" means the custodian with respect to the Global Security (as appointed by DTC), or any successor Person thereto and shall initially be the Trustee. 


        "SENIOR
INDEBTEDNESS OF THE COMPANY" means the obligations of the Company with respect to Indebtedness of the Company, whether outstanding on the date hereof or thereafter Incurred, and
any renewal, refunding, refinancing, replacement or extension thereof, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which 


17







 



the
same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Securities; PROVIDED, HOWEVER, that Senior Indebtedness of the Company shall not
include (a) Indebtedness of the Company to a Subsidiary of the Company, (b) amounts owed for goods, materials or services purchased in the ordinary course of business,
(c) Indebtedness Incurred in violation of this Indenture, (d) amounts payable or any other Indebtedness to employees of the Company or any Subsidiary of the Company, (e) any
liability for federal, state, local or other taxes owed or owing by the Company, (f) any Indebtedness of the Company that, when Incurred and without regard to any election under
Section 1111(b) of the United States Bankruptcy Code, was without recourse to the Company, (g) Subordinated Indebtedness of the Company, (h) Indebtedness of the Company that is
represented by Redeemable Stock and (i) in-kind obligations relating to net oil and gas balancing positions. 


        "SENIOR
INDEBTEDNESS OF ANY SUBSIDIARY GUARANTOR" has a correlative meaning; PROVIDED that clause (a) above shall be deemed to refer to Indebtedness of any Subsidiary Guarantor to
the Company or any Subsidiary of the Company. 


        "SIGNIFICANT
SUBSIDIARY" means, at any date of determination, any Restricted Subsidiary that would be a "Significant Subsidiary" of the Company within the meaning of
Rule 1-02 under Regulation S-X promulgated by the Commission. 


        "STATED
MATURITY", when used with respect to any security or any installment of principal thereof or interest thereon, means the date specified in such security as the fixed date on
which the principal of such security or such installment of principal or interest is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing
for the repurchase, redemption or repayment of such security upon the happening of any contingency unless such contingency has occurred). 


        "SUBORDINATED
INDEBTEDNESS" means Indebtedness of the Company or a Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is subordinated or junior in
right of payment to the Securities or the relevant Subsidiary Guarantee, as applicable, pursuant to a written agreement to that effect. 


        "SUBSIDIARY"
of a Person means (a) another Person which is a corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned or controlled by
(i) the first Person, (ii) the first Person and one or more of its Subsidiaries or (iii) one or more of the first Person's Subsidiaries or (b) another Person which is not a
corporation (x) at least 50% of the ownership interest of which and (y) the power to elect or direct the election of a majority of the directors or other governing body of which are
controlled by Persons referred to in clause (i), (ii) or (iii) above. 


        "SUBSIDIARY
GUARANTEE" means an unconditional, unsecured senior Guarantee of the Securities (including any Exchange Securities issued in a registered exchange offer pursuant to a
Registration Rights Agreement) given by any Restricted Subsidiary pursuant to the terms of this Indenture. 


        "SUBSIDIARY
GUARANTOR" means, unless released from its Guarantee as permitted by this Indenture, any Restricted Subsidiary that (i) executes this Indenture as Subsidiary Guarantor
or (ii) thereafter becomes a Guarantor of the Securities in compliance with the provisions of this Indenture by executing a supplemental indenture agreeing to be bound by the terms of this
Indenture, until a successor replaces such Restricted Subsidiary pursuant to the applicable provisions hereof and, thereafter, means the successor. 


        "TIA"
means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture except as required by Section 9.03
hereof; PROVIDED that in the event the Trust Indenture Act of 1939 is amended after such date, "TRUST INDENTURE ACT" means, to the extent required by any such amendment, the Trust Indenture Act of
1939, as so amended. 


18







 



        "TRADE
ACCOUNTS PAYABLE" means accounts payable or other obligations of the Company or any Restricted Subsidiary to trade creditors created or assumed by the Company or such Restricted
Subsidiary in the ordinary course of business in connection with the obtaining of goods or services. 


        "TRANSACTIONS"
means the transactions contemplated by (1) the Merger Agreement, (2) the Bank Credit Facilities and (3) the offering of the Initial Securities. 



        "TRUSTEE"
means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. 


        "TRUST
OFFICER" means any officer in the Corporate Trust Division of the Trustee or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its
corporate trust matters. 


        "UNIFORM
COMMERCIAL CODE" means the New York Uniform Commercial Code as in effect from time to time. 


        "UNRESTRICTED
SUBSIDIARY" means (a) Forest Alaska Holding LLC, Forest Alaska Operating LLC, Forest Texas Gathering Company, Forest Exploration International (South Africa)
(Proprietary) Limited, and Forest CMI S.p.A.; (b) each Subsidiary of the Company that the Company has designated pursuant to Section 4.15 as an Unrestricted Subsidiary; and
(c) any Subsidiary of an Unrestricted Subsidiary. 


        "VOLUMETRIC
PRODUCTION PAYMENTS" means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertakings and obligations in connection
therewith. 


        "VOTING
STOCK" of any Person means Capital Stock of such Person which ordinarily has voting power for the election of directors (or persons performing similar functions) of such Person
whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency. 



        "WHOLLY
OWNED SUBSIDIARY" means, at any time, a Restricted Subsidiary of the Company all the Voting Stock of which (other than directors' qualifying shares) is at such time owned,
directly or indirectly, by the Company and its other Wholly Owned Subsidiaries. 


        SECTION 1.02.    OTHER DEFINITIONS.    



	Term
 
	 	Defined in Section
	 
	"Agent Members"	 	2.01	(d)
	"Authenticating Agent"	 	2.02	 
	"Bankruptcy Law"	 	6.01	 
	"Change of Control Offer"	 	4.09	 
	"Change of Control Payment"	 	4.09	 
	"Change of Control Payment Date"	 	4.09	 
	"Claiming Guarantor"	 	10.02	 
	"Company Order"	 	2.02	 
	"Contributing Party"	 	10.02	 
	"covenant defeasance option"	 	8.01	(b)
	"Custodian"	 	6.01	 
	"Event of Default"	 	6.01	 
	"Excess Proceeds"	 	4.06	 
	"Exchange Global Note"	 	2.01	(a)
	"Global Securities"	 	2.01	(a)
	"IAI"	 	2.01	(a)
	 	 	 	 






19







 

	"Institutional Accredited Investor Global Note"	 	2.01	(a)
	"Global Security"	 	2.01	(a)
	"legal defeasance option"	 	8.01	(b)
	"Legal Holiday"	 	11.08	 
	"Non-U.S. Persons	 	2.01	(a)
	"Obligations"	 	10.01	 
	"Offer Amount"	 	4.06	 
	"Offer Period"	 	4.06	 
	"Paying Agent"	 	2.03	 
	"Permitted Consideration"	 	4.06	 
	"Prepayment Offer"	 	4.06	 
	"Prepayment Offer Notice"	 	4.06	 
	"Private Placement Legend"	 	2.01	(c)
	"Purchase Date"	 	4.06	 
	"Registrar"	 	2.03	 
	"Registration Default"	 	Exhibit A	 
	"Regulation S"	 	2.01	(a)
	"Regulation S Global Note"	 	2.01	(a)
	"Regulation S Legend"	 	2.01	(c)
	"Resale Restriction Termination Date"	 	2.06	 
	"Rule 144A"	 	2.01	(a)
	"Rule 144A Global Note"	 	2.01	(a)
	"Successor Company"	 	5.01	 






        SECTION 1.03.    INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.    


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



        "Commission"
means the SEC. 


        "indenture
securities" means the Securities. 


        "indenture
security holder" means a Securityholder. 


        "indenture
to be qualified" means this Indenture. 


        "indenture
trustee" or "institutional trustee" means the Trustee. 


        "obligor"
on the indenture securities means the Company, each Subsidiary Guarantor and any other obligor on the indenture securities. 




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


        SECTION 1.04.    RULES OF CONSTRUCTION.    Unless the context otherwise requires: 



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



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


        (c)   "or"
is not exclusive; 


        (d)   "including"
means including without limitation; 


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



20







 




        (f)    unsecured
Indebtedness shall not be deemed to be subordinate or junior to secured Indebtedness merely by virtue of its nature as unsecured Indebtedness; 


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


        (h)   the
principal amount of any Preferred Stock shall be the greater of (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred Stock. 



ARTICLE II  


 THE SECURITIES  


        SECTION 2.01.    FORM, DATING AND TERMS.    (a)    The Initial Securities and the Additional
Securities shall be in substantially the form set forth in Exhibit A hereto, which is hereby incorporated by reference and made a part of this
Indenture, and the Exchange Securities shall be in substantially the form set forth in Exhibit B hereto, which is hereby incorporated by
reference and made a part of this Indenture.
The Initial Securities will be resold initially only to (A) QIBs in reliance on Rule 144A under the Securities Act ("Rule 144A")
and (B) Persons other than U.S. Persons (as defined in Regulation S under the Securities Act ("Regulation S")) in reliance on
Regulation S. Such Initial Securities may thereafter be transferred to among others, QIBs, purchasers in reliance on Regulation S and "institutional accredited investors" (as defined in
Rule 501(a)(1), (2), (3) and (7) under the Securities Act) who are not QIBs ("IAIs") in accordance with the procedure described herein. 


        Initial
Securities and Additional Securities offered and sold to QIBs in the United States of America in reliance on Rule 144A will be issued initially in the form of a permanent
global Security, without interest coupons, made a part of this Indenture, including appropriate legends as set forth in Section 2.01(c) (a
"Rule 144A Global Note"), deposited with the Trustee, as custodian for DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. A Rule 144A Global Note may be represented by more than one certificate, if so required by DTC's rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of a Rule 144A Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for DTC,
as hereinafter provided. 


        Initial
Securities and Additional Securities offered, sold and resold outside the United States of America to Persons other than U.S. Persons
("Non-U.S. Persons") in reliance on Regulation S will be issued initially in the form of a permanent global Security, including
appropriate legends as set forth in 2.01(c) below (a "Regulation S Global Note") deposited with the Trustee, as custodian for DTC, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. A Regulation S Global Note may be represented by more than one certificate, if so required by DTC's rules regarding the
maximum principal amount to be represented by a single certificate. The aggregate principal amount of a Regulation S Global Note may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for DTC, as hereinafter provided. 


        Initial
Securities or Additional Securities resold after an initial resale thereof to QIBs in reliance on Rule 144A or an initial resale thereof in reliance on Regulation S
to IAIs in the United States of America in accordance with the procedure described herein will be initially issued in the form of a permanent global Security (an "Institutional
Accredited Investor Global Note") deposited with the Trustee, as custodian for DTC, duly executed by the Company and authenticated by the Trustee as hereinafter provided. An
Institutional Accredited Investor Global Note may be represented by more that one certificate, if so required by DTC's rules regarding the maximum principal amount to be 


21







 



represented
by a single certificate. The aggregate principal amount of an Institutional Accredited Investor Global Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided. 


        Exchange
Securities exchanged for interests in a Rule 144A Global Note, a Regulation S Global Note or an Institutional Accredited Investor Global Note will be issued
initially in the form of a permanent
global Security, deposited with the Trustee as hereinafter provided, including the appropriate legend set forth in Section 2.01(c) (an
"Exchange Global Note"). An Exchange Global Note may be represented by more than one certificate, if so required by DTC's rules regarding the maximum
principal amount to be represented by a single certificate. 


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


        Except
as described in the succeeding two sentences, the principal of (and premium, if any) and interest on the Securities shall be payable at the office or agency of the Company
maintained for such purpose in The City of New York, or at such other office or agency of the Company as may be maintained for such purpose pursuant to  Section 2.03; provided, however, that, at the
option of the Company, each installment of interest may be paid by (i) check mailed to
addresses of the Persons entitled thereto as such addresses shall appear on the Note Register or (ii) wire transfer to an account located in the United States maintained by the payee. Payments
in respect of Securities represented by a Global Security (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by DTC.
Payments in respect of Securities represented by Definitive Securities (including principal, premium, if any, and interest) held by a Holder of at least $1,000,000 aggregate principal amount of
Securities represented by Definitive Securities will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion). 


        The
Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage, in addition to those set
forth on Exhibits A and B and in Section 2.01(c) provided that any such notation, legend or endorsement is in a form reasonably acceptable to the
Company. The Company and the Trustee shall approve the forms of the Securities and any notation, endorsement or legend on them. Each Security shall be dated the date of its authentication. The terms
of the Securities set forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to be bound by such terms. 


        (b)    Denominations.    The Securities shall be issuable only in fully registered form, without coupons, and only in
minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof. 


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



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


"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY
INTEREST 



22







 




OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION. 


THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF
THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
PROVIDED THAT PRIOR TO SUCH TRANSFER, THE TRANSFEROR FURNISHES TO THE COMPANY AND THE TRUSTEE A CERTIFICATE CONTAINING CERTAIN REPRESENTATIONS RELATING TO THE PROPOSED TRANSFER BEING EFFECTED PURSUANT
TO AND IN ACCORDANCE WITH REGULATION S (THE FORM OF WHICH CERTIFICATE CAN BE OBTAINED FROM THE TRUSTEE), (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000 OF SECURITIES FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT AND THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE COMPANY AND THE TRUSTEE A CERTIFICATE CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH CERTIFICATE CAN BE OBTAINED FROM THE TRUSTEE), OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) AND (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE." 


         (ii)  Each
Regulation S Global Note shall bear the following legend (the "Regulation S Legend") on the face
thereof: 


"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE
ACCOUNT 



23







 




OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT
OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE 40-DAY PERIOD REFERRED TO BELOW, ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S, PROVIDED THAT PRIOR TO SUCH TRANSFER, THE TRANSFEROR FURNISHES TO THE COMPANY AND THE TRUSTEE A CERTIFICATE CONTAINING CERTAIN REPRESENTATIONS RELATING TO THE PROPOSED TRANSFER
BEING EFFECTED PURSUANT TO AND IN ACCORDANCE WITH REGULATION S (THE FORM OF WHICH CERTIFICATE CAN BE OBTAINED FROM THE TRUSTEE), (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH
CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, AND THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE COMPANY AND THE TRUSTEE A CERTIFICATE CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH CERTIFICATE CAN BE OBTAINED FROM THE TRUSTEE), OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY
ON WHICH THE SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT." 



24









  



        (iii)  The
Global Securities, shall bear the following legend on the face thereof: 


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


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




        (d)    Book-Entry Provisions.    



          (i)  This
Section 2.01(d) shall apply only to Global Securities deposited with the Trustee, as custodian for DTC. 


         (ii)  Each
Global Security initially shall (x) be registered in the name of Cede & Co., as nominee of DTC, (y) be delivered to the Trustee as custodian
for DTC and (z) bear legends as set forth in Section 2.01(c). 


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



        (iv)  In
connection with any transfer of a portion of the beneficial interest in a Global Security pursuant to subsection (e) of this Section to beneficial owners who
are required to hold Definitive Securities, the Securities Custodian shall reflect on its books and records the date and a decrease in the principal amount of such Global Security in an amount equal
to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Definitive
Securities of like tenor and amount. 


         (v)  In
connection with the transfer of an entire Global Security to beneficial owners pursuant to subsection (e) of this Section, such Global Security shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by DTC in exchange for its
beneficial interest in such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations. 



25







 




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




        (e)    Definitive Securities.    



          (i)  Except
as provided below, owners of beneficial interests in Global Securities will not be entitled to receive Definitive Securities. If required to do so pursuant to
any applicable law or regulation, beneficial owners may obtain Definitive Securities in exchange for their beneficial interests in a Global Security upon written request in accordance with DTC's and
the Registrar's procedures. In addition, Definitive Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Security if (a) DTC notifies
the Company that it is unwilling or unable to continue as depositary for such Global Security or DTC ceases to be a clearing agency registered under the Exchange Act, at a time when DTC is required to
be so registered in order to act as depositary, and in each case a successor depositary is not appointed by the Company within 90 days of such notice or (b) the Company executes and
delivers to the Trustee and Registrar an Officers' Certificate stating that such Global Security shall be so exchangeable. 



         (ii)  Any
Definitive Security delivered in exchange for an interest in a Global Security pursuant to Section 2.01(d)(iv) or
(v) shall, except as otherwise provided by Section 2.06(c), bear the applicable legend regarding transfer restrictions
applicable to the Definitive Security set forth in Section 2.01(c). 


        (iii)  In
connection with the exchange of a portion of a Definitive Security for a beneficial interest in a Global Security, the Trustee shall cancel such Definitive
Security, and the Company shall execute, and the Trustee shall authenticate and deliver, to the transferring Holder a new Definitive Security representing the principal amount not so transferred. 




        SECTION
2.02.    EXECUTION AND AUTHENTICATION.    One Officer shall sign the Securities for the Company by manual or
facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless, after
giving effect to any exchange of Initial Securities or Additional Securities for Exchange Securities. 



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


        At
any time and from time to time after the execution and delivery of this Indenture, the Trustee shall authenticate and make available for delivery: (1) Initial Securities for
original issue on the Issue Date in an aggregate principal amount of $750 million, (2) if and when issued, the Additional Securities and (3) Exchange Securities for issue only in
a registered exchange offer pursuant to a Registration Rights Agreement, and only in exchange for Initial Securities or Additional Securities of an equal principal amount, and in each case upon a
written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company (the "Company
Order"). Such Company Order shall specify the amount of the Securities to be authenticated and whether the Securities are to be Initial Securities, Additional Securities or
Exchange Securities. The Trustee shall authenticate and make available for delivery Initial Securities on the Issue Date in an amount limited to $750.0 million aggregate principal amount and,
subsequent to the Issue Date, such additional principal amount of Additional Securities as may be authorized from time to time by resolution adopted by the Company's Board of Directors, except for
Securities authenticated and 


26







 



delivered
upon registration or transfer of, or in exchange for, or in lieu of, other Securities pursuant to this Section 2.02,  Section 2.06, Section 2.09,  Section 2.11, Section 3.06 or  Section 9.05 and except for Exchange Securities. All Securities issued on the Issue Date and all Additional Securities and Exchange Securities
shall be of the same series and shall be identical in all respects other than issue dates, the date from which interest accrues and any changes relating thereto. 


        With
respect to any Additional Securities, there shall be established in or pursuant to a resolution of the Board of Directors of the Company, prior to the issuance of such Additional
Securities: 


        (a)   the
aggregate principal amount of such Additional Securities which may be authenticated and delivered under this Indenture; 


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



        (c)   if
applicable, that such Additional Securities shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective
depositories for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in this Article II; and 


        (d)   if
applicable, that such Additional Securities shall not be issued in the form of Initial Securities subject to Exhibit A, but shall be issued in the form of
Exchange Securities as set forth in Exhibit B. 


        If
any of the terms of any Additional Securities are established by action taken pursuant to a resolution of the Board of Directors of the Company, a copy of an appropriate record of
such action shall be certified by the Secretary or any Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms
of the Additional Securities. 


        Notwithstanding
anything to the contrary contained in this Indenture, the Holders of all Securities issued under this Indenture shall vote and consent together on all matters as one
class and the Holders of any Initial Securities, Additional Securities, or Exchange Securities will not have the right to vote or consent as a separate class on any matter. 


        The
Trustee may appoint an agent (the "Authenticating Agent") reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by the Authenticating Agent. 


        In
case the Company, pursuant to Article V, shall be consolidated or merged with or into any other Person or shall convey, transfer
or lease all or substantially all of the Property of the Company and its Restricted Subsidiaries, taken as a whole, to any Person, and the Successor Company resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the Person which shall have received a conveyance, transfer or lease as aforesaid, shall have executed an indenture
supplemental hereto with the Trustee pursuant to Article V, any of the Securities authenticated or delivered prior to such consolidation, merger,
conveyance, transfer or lease may, from time to time, at the request of the Successor Company, be exchanged for other Securities executed in the name of the Successor Company with such changes in
phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order
of the Successor Company, shall authenticate and deliver Securities as specified in such order for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any
new name of a Successor Company pursuant to this Section 2.02 in exchange or substitution for or upon registration of transfer of any Securities,
such Successor Company, at the option of the Holders but without expense to them, shall provide for the 


27







 



exchange
of all Securities at the time outstanding for Securities authenticated and delivered in such new name. 



        SECTION
2.03.    REGISTRAR AND PAYING AGENT.    The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Securities may be presented for payment (the "Paying Agent"). The Company shall cause each of the
Registrar and the Paying Agent to maintain an office or agency in the Borough of Manhattan, The City of New York. The Registrar shall keep a register of the Securities and of their transfer and
exchange (the "Note Register"). The Company may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. 



        The
Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms
of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any of its
Restricted Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent. 


        The
Company initially appoints the Trustee as Registrar and Paying Agent for the Securities. 



        SECTION
2.04.    PAYING AGENT TO HOLD MONEY IN TRUST.    By at least 10:00 a.m. (New York City time) on the
date on which any principal of, premium, if any, or interest on any Security is due and payable, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal, premium or
interest when due. The Company shall require each Paying Agent (other than the Trustee)
to agree in writing that such Paying Agent shall hold in trust for the benefit of Security holders or the Trustee all money held by such Paying Agent for the payment of principal of, premium, if any,
or interest on the Securities and shall notify the Trustee in writing of any default by the Company or any Subsidiary Guarantor in making any such payment. If the Company or a Restricted Subsidiary
acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent (other than the Trustee) to pay
all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section, the Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money delivered to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company when acting as Paying Agent, the Trustee shall
serve as Paying Agent for the Securities. 


        SECTION
2.05.    SECURITYHOLDER 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 Securityholders. If the Trustee is not the Registrar, or to the extent otherwise required under the TIA, the Company shall furnish to
the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders. 


        SECTION
2.06.    TRANSFER AND EXCHANGE.    (a)    The following provisions shall apply with respect to any
proposed transfer of a beneficial interest in a Rule 144A Global Note or an Institutional Accredited Investor Global Note or any Definitive Security issued in exchange therefor prior to the
date which is two years after the later of the date of its original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date"): 



          (i)  a
transfer thereof to a QIB shall be made upon the representation of the transferee in the form as set forth on the reverse of the Security, that it is purchasing for
its own account or an 



28







 

account
with respect to which it exercises sole investment discretion and that each of it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from
registration provided by Rule 144A; 


         (ii)  a
transfer thereof to an IAI shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth in  Section 2.07 from the proposed transferee and, if requested
by the Company or the Trustee, the delivery of an opinion of counsel, certification
and/or other information satisfactory to each of them; and 


        (iii)  a
transfer thereof to a Non-U.S. Person shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth in
Section 2.08 from the transferor and, if requested by the Company or the Trustee, the delivery of an opinion of counsel, certification and/or other information satisfactory to each of them. 




        (b)   The
following provisions shall apply with respect to any proposed transfer of a beneficial interest in a Regulation S Global Note or any Definitive Securities
issued in exchange therefor prior to the expiration of the Restricted Period: 



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


         (ii)  a
transfer thereof to an IAI shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth in  Section 2.07 from the proposed transferee and, if requested
by the Company or the Trustee, the delivery of an opinion of counsel, certification
and/or other information satisfactory to each of them; and 


        (iii)  a
transfer thereof to a Non-U.S. Person shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth in  Section 2.08 hereof from the transferor and, if
requested by the Company or the Trustee, delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them. 




        After
the expiration of the Restricted Period, beneficial interests in the Regulation S Global Note or Definitive Securities issued in exchange therefor may be transferred without
requiring certification set forth in Section 2.07, Section 2.08 or any additional
certification. 


        (c)    Restricted Securities Legend.    Upon the transfer, exchange or replacement of Securities not bearing a
Restricted Securities Legend, the Registrar shall deliver Securities that do not bear a Restricted Securities Legend. Upon the transfer, exchange or replacement of Securities bearing a Restricted
Securities Legend, the Registrar shall deliver only Securities that bear a Restricted Securities Legend unless such Securities are Exchange Securities issued in a registered exchange offer or are
otherwise sold under an effective registration statement under the Securities Act or there is delivered to the Registrar an opinion of counsel to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. 


29









   
        (d)   The Registrar shall retain copies of all letters, notices and other written communications received pursuant to  Section 2.01 or
this Section 2.06. The Company shall have the right to inspect and make
copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Registrar. 



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



          (i)  To
permit registrations of transfers and exchanges, the Company shall, subject to the other terms and conditions of this  Article II, execute and the Trustee shall authenticate Definitive Securities
and Global Securities at the Registrar's or
co-registrar's request. 


         (ii)  No
service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer
tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charges payable upon exchange or transfer
pursuant to Sections 4.06, 4.09 or 9.05). 


        (iii)  The
Registrar or co-registrar shall not be required to register the transfer of or exchange of any Security for a period of (1) 15 days
before a selection of Securities to be redeemed or (2) 15 days before an interest payment date. 


        (iv)  Prior
to the due presentation for registration of transfer of any Security, the Company, each Subsidiary Guarantor, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the Person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of, premium, if
any, and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, any Subsidiary Guarantor, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the contrary. 


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




        (f)    No Obligation of the Trustee.    



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


         (ii)  The
Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Security (including any transfers between or among DTC participants, members or beneficial owners in any Global Security) other than
to require delivery of such certificates and other documentation or evidence as are expressly required 



30







 




by,
and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. 




        SECTION
2.07.    FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS TO INSTITUTIONAL ACCREDITED
INVESTORS.    


[Date]



Forest
Oil Corporation

c/o U.S. Bank National Association

Corporate Trust Services

EP-MN-WS2N

60 Livingston Avenue

St. Paul, MN 55107 


Ladies
and Gentlemen: 


        This
certificate is delivered to request a transfer of $                        principal amount of the 7.25% Senior Notes due 2019
(the "Securities") of Forest Oil Corporation (the "Company"). 



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



	Name:	 	 
	

Address:	
 	

 
	

Taxpayer ID Number:	
 	

 






        The
undersigned represents and warrants to you that: 



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


        2.     We
understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is two
years after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a registration statement which has been declared effective under the Securities Act, (c) in a transaction
complying with the requirements of Rule 144A under the Securities Act, to a person we reasonably believe is a qualified institutional buyer under Rule 144A (a "QIB") that purchases for
its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e) to an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the account of such an institutional "accredited investor," in each case in a minimum principal 



31







 




amount
of Securities of $250,000 or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made
pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company
and the Trustee, which shall provide, among other things, that the transferee is an institutional "accredited investor" (within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Company and the
Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale Termination Date of the Securities pursuant to clauses (d), (e) or (f) above to require the delivery of
an opinion of counsel, certifications and/or other information satisfactory to the Company and the Trustee. 



	

 	

TRANSFEREE:
	

 	


	

 	

 
	



 	



BY:
	

 	







        SECTION
2.08.    FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S.    


[Date]



Forest
Oil Corporation

c/o U.S. Bank National Association

Corporate Trust Services

EP-MN-WS2N

60 Livingston Avenue

St. Paul, MN 55107 



	Re:
	Forest
Oil Corporation
 7.25% Senior Notes due 2019 (the "Securities")




Ladies
and Gentlemen: 



        In
connection with our proposed sale of $            aggregate principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with
Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent that: 



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


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



32







 




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


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




        In
addition, if the sale is made during a restricted period and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable thereto, we confirm
that such sale has been made in accordance with the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be. 


        You
and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S. 



	

 	
 	

Very truly yours,
	

 	
 	

[Name of Transferor]
	

 	
 	

By:	
 	

 
 Authorized Signature





        SECTION
2.09.    REPLACEMENT SECURITIES.    If a mutilated Security is surrendered to the Registrar or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar
from any loss which any of them may suffer if a Security is replaced, and, in the absence of notice to the Company, any Subsidiary Guarantor or the Trustee that such Security has been acquired by a
protected purchaser, the Company shall execute and upon Company Order the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding. 


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


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


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


33







 



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


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


        If
a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is
held by a protected purchaser. 


        If
the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 10:00 a.m. (New York City time) on a redemption date or Stated Maturity date money
sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such
Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue. 


        SECTION
2.11.    TEMPORARY SECURITIES.    Until Definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Company considers appropriate
for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Securities. After the preparation of Definitive Securities, the temporary
Securities shall be exchangeable for Definitive Securities upon surrender of the temporary Securities at any office or agency maintained by the Company for that purpose and such exchange shall be
without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute, and the Trustee shall authenticate and make available for delivery in
exchange therefor, one or more Definitive Securities representing an equal principal amount of Securities. Until so exchanged, the Holder of temporary Securities shall in all respects be entitled to
the same benefits under this Indenture as a Holder of Definitive Securities. 


        SECTION
2.12.    CANCELLATION.    The Company at any time may deliver Securities to the Trustee for cancellation. The
Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Securities in accordance with its internal policies including delivery of a Certificate of
Destruction describing such Securities. The Company may not issue new Securities to replace Securities it has paid or delivered to the Trustee for cancellation for any reason other than in connection
with a transfer or exchange. 


        SECTION
2.13.    DEFAULTED INTEREST.    If the Company defaults in a payment of interest on the Securities, the
Company shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the Persons who are
Securityholders on a subsequent special record date. The Company shall fix or cause to be 


34







 

fixed
any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Securityholder a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid. 


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


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


ARTICLE III  


 REDEMPTION  


        SECTION
3.01.    NOTICES TO TRUSTEE.    If the Company is required to redeem Securities pursuant to paragraph 5
of the Securities or if it elects to redeem Securities pursuant to paragraph 6 of the Securities, it shall notify the Trustee in writing of the redemption date, the principal amount of
Securities to be redeemed and the paragraph of the Securities pursuant to which such redemption is being made. In connection with any such redemption pursuant to the third paragraph of
paragraph 6 of the Securities, the Company shall deliver to the Trustee an Officers' Certificate setting forth the redemption price on all Securities to be redeemed, and the Trustee shall rely
solely upon, and shall be fully protected in relying upon such Officers' Certificate, in all matters concerning the redemption price. 


        The
Company shall give each notice to the Trustee provided for in this Section at least five Business Days before mailing any notice of redemption pursuant to  Section 3.03, unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers' Certificate and an Opinion of
Counsel from the Company to the effect that such redemption will comply with the conditions herein. 


        SECTION
3.02.    SELECTION OF SECURITIES TO BE REDEEMED.    If less than all the Securities are to be redeemed at any
time, selection of Securities for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed,
or, if the Securities are not so listed, on a pro rata basis or by such other method that the Trustee shall deem fair and appropriate. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $2,000. Securities and portions of them the
Trustee selects shall be in minimum amounts of $2,000 or a whole multiple of $1,000 in excess thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed. 


        SECTION
3.03.    NOTICE OF REDEMPTION.    At least 30 days but not more than 60 days before a date for
optional redemption of Securities, and no more than 15 days before the mandatory redemption date, as the case may be, the Company shall mail a notice of redemption by first-class mail to each
Holder of Securities to be redeemed. 


35







 



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



        (a)   the
redemption date; 


        (b)   the
redemption price (if then determinable or, if not, then the method for determination of the redemption price); 


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


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


        (e)   if
fewer than all the outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed; 



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


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




        At
the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. In such event, the Company shall provide the Trustee with
the information required by this Section. 


        SECTION
3.04.    EFFECT OF NOTICE OF REDEMPTION.    Once notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date and at the applicable redemption price. Upon surrender to the Paying Agent, such Securities shall be paid at the applicable redemption price,
plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on
or prior to the date of redemption). Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. The Company is not required to
transfer or exchange any Security selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed). Also, the Company is not required
to transfer or exchange any Security for a period of 15 days before a selection of Securities to be redeemed. 


        SECTION
3.05.    DEPOSIT OF REDEMPTION PRICE.    By 10:00 a.m. (New York City time) on the redemption date, the
Company shall deposit with the Paying Agent (or, if the Company or a Restricted Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and
accrued and unpaid interest (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of
redemption) on all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption which have been delivered by the Company to the Trustee for
cancellation. 


        SECTION
3.06.    SECURITIES REDEEMED IN PART.    Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder (at the Company's expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered. 


36







 


ARTICLE IV  


 COVENANTS  


        SECTION
4.01.    PAYMENT OF SECURITIES.    The Company shall promptly pay the principal of and interest and premium,
if any, on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal, premium and interest shall be considered paid on the date due if
by10:00 a.m. (New York City time) on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay timely all principal, premium and interest then
due. 


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


        SECTION
4.02.    SEC REPORTS.    Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC and provide the Trustee and Holders of Securities with copies of the quarterly and annual
financial information required to be contained in a filing with the SEC on Forms 10-Q and 10-K, including a Management's Discussion and Analysis of Financial Condition and
Results of Operations, and, with respect to the annual consolidated financial statements only, a report thereon by the Company's independent auditors; PROVIDED, HOWEVER, that the Company shall not be
so obligated to file such information with the SEC if the SEC does not permit such filings. The Company shall comply with the other provisions of Section 314(a) of the Trust Indenture Act. 


        SECTION
4.03.    LIMITATION ON INDEBTEDNESS.    The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any Indebtedness unless, after giving pro forma effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds thereof, no
Default would occur as a consequence of, and no Event of Default would be continuing
following, such Incurrence and application and either (a) the Consolidated Interest Coverage Ratio would exceed 2.25 to 1.0 or (b) such Indebtedness is Permitted Indebtedness. 


        SECTION
4.04.    LIMITATION ON RESTRICTED PAYMENTS.    (a) The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, make any Restricted Payment if, at the time of and after giving effect to the proposed Restricted Payment, (i) any Default or Event of Default
would have occurred and be continuing, (ii) the Company could not Incur at least $1.00 of additional Indebtedness pursuant to clause (a) of Section 4.03 or (iii) the
aggregate amount expended or declared for all Restricted Payments from the Reference Date would exceed the sum (without duplication) of the following: 



        (A)  50%
of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis commencing on the last day of the fiscal quarter immediately preceding the
fiscal quarter in which the Reference Date occurs, and ending on the last day of the fiscal quarter ending on or immediately preceding the date of such proposed Restricted Payment (or, if such
aggregate Consolidated Net Income shall be a loss, minus 100% of such loss), plus 



        (B)  the
aggregate net cash proceeds, or the Fair Market Value of Property other than cash, received by the Company on or after the Reference Date from the issuance or sale
(other than to a Subsidiary of the Company) of Capital Stock of the Company, plus 


        (C)  the
aggregate net cash proceeds, or the Fair Market Value of Property other than cash, received by the Company as capital contributions to the Company (other than from a
Subsidiary of the Company) on or after the Reference Date, plus 



        (D)  the
aggregate net cash proceeds received by the Company from the issuance or sale (other than to any Subsidiary of the Company) on or after the Reference Date of
convertible 



37







 




Indebtedness
that has been converted into or exchanged for Capital Stock of the Company, together with the aggregate net cash proceeds received by the Company at the time of such conversion or
exchange or received by the Company from any such conversion or exchange of convertible Indebtedness issued or sold (other than to any Subsidiary of the Company) prior to the Reference Date, plus 



        (E)  to
the extent not otherwise included in the Company's Consolidated Net Income, an amount equal to the net reduction in Investments made by the Company and its Restricted
Subsidiaries subsequent to the Reference Date in any Person resulting from (1) payments of interest on debt, dividends, repayments of loans or advances or other transfers or distributions of
Property, in each case to the
Company or any Restricted Subsidiary from any Person other than the Company or a Restricted Subsidiary, and in an amount not to exceed the book value of such Investments previously made in such Person
that were treated as Restricted Payments, or (2) the designation of any Unrestricted Subsidiary as a Restricted Subsidiary, and in an amount not to exceed the lesser of (x) the book
value of all Investments previously made in such Unrestricted Subsidiary that were treated as Restricted Payments and (y) the Fair Market Value of such Unrestricted Subsidiary, plus 


        (F)  $25,000,000.





        (b)   The
limitations set forth in paragraph (a) above will not prevent the following Restricted Payments so long as, at the time thereof, no Default or Event of
Default shall have occurred and be continuing (except in the case of clause (i), under which the payment of a dividend is permitted): 



          (i)  the
payment of any dividend on Capital Stock of the Company or any Restricted Subsidiary within 60 days after the declaration thereof, if at such declaration
date such dividend could have been paid in compliance with paragraph (a) above; 


         (ii)  the
repurchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any of its Subsidiaries held by any current or former
officers, directors or employees of the Company or any of its Subsidiaries pursuant to the terms of agreements (including employment agreements) or plans approved by the Company's Board of Directors,
including any such repurchase, redemption, acquisition or retirement of shares of such Capital Stock that is deemed to occur upon the exercise of stock options or similar rights if such shares
represent all or a portion of the exercise price or are surrendered in connection with satisfying United States or Canadian Federal income tax obligations; PROVIDED, HOWEVER, that the aggregate amount
of such repurchases, redemptions, acquisitions and retirements shall not exceed the sum of (A) $10,000,000 in any 12-month period and (B) the aggregate net proceeds, if any,
received by the Company during such 12-month period from any issuance of such Capital Stock pursuant to such agreements or plans; 


        (iii)  the
purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the
aggregate net cash proceeds of, a substantially concurrent issuance and sale (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any
of its Subsidiaries, for the benefit of their employees) of Capital Stock of the Company; 


        (iv)  the
making of any principal payment on or the repurchase, redemption, legal defeasance or other acquisition or retirement for value, prior to any scheduled principal
payment, scheduled sinking fund payment or maturity, of any Subordinated Indebtedness in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent issuance and sale (other
than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries, for the benefit of their employees) of Capital Stock of the
Company; 



38







 




         (v)  the
making of any principal payment on or the repurchase, redemption, legal defeasance or other acquisition or retirement for value of Subordinated Indebtedness in
exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent Incurrence (other than a sale to a Subsidiary of the Company) of Subordinated Indebtedness so long as such new
Indebtedness is Permitted Refinancing Indebtedness and (A) has an Average Life that is longer than the Average Life of the Securities and (B) has a Stated Maturity for its final
scheduled principal payment that is more than one year after the Stated Maturity of the final scheduled principal payment of the Securities; 


        (vi)  the
making of any principal payment on or the repurchase, redemption, legal defeasance or other acquisition or retirement for value, prior to any scheduled principal
payment, scheduled sinking fund payment or maturity, of any Subordinated Indebtedness that is either (A) existing on the Issue Date or (B) issued after the Issue Date in exchange for, or
for aggregate net cash proceeds used to repurchase, redeem, legally defease or otherwise acquire or retire for value, Subordinated Indebtedness existing on the Issue Date;  provided, however, that the
aggregate principal amount of such Subordinated Indebtedness issued after the Issue Date shall not exceed the aggregate
principal amount of the Subordinated Indebtedness existing on the Issue Date so exchanged, repurchased, redeemed, legally defeased or otherwise acquired or retired for value; and 


       (vii)  loans
made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors (or a duly authorized officer), the net
cash proceeds of which are used solely (A) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received
pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options or (B) to refinance loans, together
with accrued interest thereon, made pursuant to item (A) of this clause (vii). 




        The
actions described in clauses (i) and (ii) of this paragraph (b) shall be included in subsequent calculations of the amount of Restricted Payments. The actions
described in clauses (iii), (iv), (v), (vi) and (vii) of this paragraph (b) shall be excluded in the subsequent calculations of the amount of Restricted Payments; PROVIDED that
the net cash proceeds from any issuance or sale of Capital Stock of the Company pursuant to such clauses (iii), (iv) and (vii) shall be excluded from any calculations pursuant to clauses
(B) or (C) under the immediately preceding paragraph (a). 


        The
amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the securities or other assets proposed to be issued or
transferred by the Company or any of its Restricted Subsidiaries, as the case may be, pursuant to the Restricted Payment. 


        SECTION
4.05.    LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES.    The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the
legal right of any Restricted Subsidiary to (i) pay dividends, in cash or otherwise, or make any other distributions on or in respect of its Capital Stock, or pay any Indebtedness or other
obligation owed, to the Company or any other Restricted Subsidiary, (ii) make loans or advances to the Company or any other Restricted Subsidiary or (iii) transfer any of its Property to
the Company or any other Restricted Subsidiary. Such limitation will not apply (a) with respect to clauses (i), (ii) and (iii), to encumbrances and restrictions (1) in Bank Credit
Facilities and other agreements and instruments, in each case as in effect on the Issue Date, (2) relating to Indebtedness of a Restricted Subsidiary and existing at the time it became a
Restricted Subsidiary if such encumbrance or restriction was not created in anticipation of or in connection with the transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary PROVIDED, that any such encumbrance or restriction shall not extend to any assets or property of the Company or 


39







 



any
other Restricted Subsidiary other than the assets and property so acquired and that, in the case of Indebtedness, was permitted to be Incurred pursuant to this Indenture; (3) which result
from the renewal, refinancing, extension or amendment of an agreement that is the subject of clause (a) (1) or (2) above or clause (b) (1) or (2) below, or
any agreement for the sale or other disposition of Property, including without limitation an agreement for the sale or other disposition of the Capital Stock or Property of a Restricted Subsidiary,
that restricts distributions, advances or transfers by the applicable Restricted Subsidiary pending the sale of or other disposition; PROVIDED that such encumbrance or restriction is not materially
less favorable to the Holders of Securities than those under or pursuant to the agreement so renewed, refinanced, extended or amended, and (b) with respect to clause (iii) only, to
(1) any restriction on the sale, transfer or other disposition of Property relating to Indebtedness that is permitted to be Incurred and secured under Sections 4.03 and
4.10, (2) any encumbrance or restriction applicable to Property at the time it is acquired by the Company or a Restricted Subsidiary, so long as such encumbrance or
restriction relates solely to the Property so acquired and was not created in anticipation of or in connection with such acquisition, (3) customary provisions restricting subletting or
assignment of leases and customary provisions in other agreements that restrict assignment of such agreements or rights thereunder and (4) customary restrictions contained in asset sale
agreements limiting the transfer of such assets pending the closing of such sale. 


        SECTION
4.06.    LIMITATION ON ASSET SALES.    (a) The Company will not, and will not permit any Restricted
Subsidiary to, consummate any Asset Sale unless (i) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the Property subject to such Asset Sale and (ii) all of the consideration paid to the Company or such Restricted Subsidiary in connection with such Asset Sale is in the
form of cash, cash equivalents, Liquid Securities, Exchanged Properties or the assumption by the purchaser of liabilities of the Company (other than liabilities of the Company that are by their terms
subordinated to the Securities) or liabilities of any Restricted Subsidiary that made such Asset Sale (other than
liabilities of any Subsidiary Guarantor that are by their terms subordinated to such Subsidiary Guarantor's Subsidiary Guarantee), in each case as a result of which the Company and its remaining
Restricted Subsidiaries are no longer liable for such liabilities ("PERMITTED CONSIDERATION"); PROVIDED, HOWEVER, that the Company and its Restricted Subsidiaries shall be permitted to receive
Property other than Permitted Consideration, so long as the aggregate Fair Market Value of all such Property other than Permitted Consideration received from Asset Sales and held by the Company and
the Restricted Subsidiaries at any one time shall not exceed 10.0% of Adjusted Consolidated Net Tangible Assets. 


        The
Net Available Cash from Asset Sales by the Company or a Restricted Subsidiary may be applied by the Company, such Restricted Subsidiary or another Restricted Subsidiary, to the
extent the Company elects (or is required by the terms of any Pari Passu Indebtedness of the Company or a Restricted Subsidiary), to (i) prepay, repay or purchase Pari Passu Indebtedness of the
Company (including the Securities) or a Subsidiary Guarantor or any Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor (in each case excluding Indebtedness owed to the Company
or an Affiliate of the Company); or (ii) to reinvest in Additional Assets (including by means of an Investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received
by the Company or another Restricted Subsidiary). 


        (b)   Any
Net Available Cash from an Asset Sale not applied in accordance with the preceding paragraph within 365 days from the date of such Asset Sale will constitute
"Excess Proceeds". When the aggregate amount of Excess Proceeds exceeds $50,000,000, an offer to purchase Securities having an aggregate principal amount equal to the aggregate amount of Excess
Proceeds (the "PREPAYMENT OFFER") must be made by the Company at a purchase price equal to 100% of the principal amount of such Securities plus accrued and unpaid interest, if any, to the Purchase
Date (as defined) in accordance with the procedures (including prorating in the event of oversubscription) set 


40







 



forth
in this Indenture, but, if the terms of any Pari Passu Indebtedness require that a Pari Passu Offer be made contemporaneously with the Prepayment Offer, then the Excess Proceeds shall be
prorated between the Prepayment Offer and such Pari Passu Offer in accordance with the aggregate outstanding principal amounts of the Securities and such Pari Passu Indebtedness, and the aggregate
principal amount of Securities for which the Prepayment Offer is made shall be reduced accordingly. If the aggregate principal amount of Securities tendered by Holders thereof exceeds the amount of
available Excess Proceeds, then such Excess Proceeds will be allocated pro rata according to the principal amount of the Securities tendered and the Trustee will select the Securities to be purchased
in accordance with this Indenture. To the extent that any portion of the amount of Excess Proceeds remains after compliance with the second sentence of this paragraph and PROVIDED that all Holders of
Securities have been given the opportunity to tender their Securities for purchase as described in the following paragraph in accordance with this Indenture, the Company and its Restricted
Subsidiaries may use such remaining amount for purposes permitted by this Indenture and the amount of Excess Proceeds will be reset to zero. 



        (c)   (1)
Within 30 days after the 365th day following the date of an Asset Sale, the Company shall, if it is obligated to make an offer to purchase the Securities
pursuant to the preceding paragraph, send a written Prepayment Offer notice, by first-class mail, to the Holders of the Securities (the "PREPAYMENT OFFER NOTICE"), accompanied by such information
regarding the Company and its Subsidiaries as the Company believes will enable such Holders of the Securities to make an informed decision with respect to the Prepayment Offer (which at a minimum
shall include (i) the most recently filed Annual Report on Form 10-K (including audited consolidated financial statements) of the Company, the most recent subsequently filed
Quarterly Report on Form 10-Q of the Company and any Current Report on Form 8-K of the Company filed subsequent to such Quarterly Report, other than Current
Reports describing Assets Sales otherwise described in the offering materials, or corresponding successor reports (or, during any time that the Company is not subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, corresponding reports prepared pursuant to Section 4.02), (ii) a description of material developments in the Company's business subsequent
to the date of the latest such reports and (iii) if material, appropriate pro forma financial information). The Prepayment Offer Notice shall state, among other things, (i) that the
Company is offering to purchase Securities pursuant to the provisions of this Indenture, (ii) that any Security (or any portion thereof) accepted for payment (and duly paid on the Purchase
Date) pursuant to the Prepayment Offer shall cease to accrue interest on the Purchase Date, (iii) that any Securities (or portions thereof) not properly tendered will continue to accrue
interest, (iv) the purchase price and purchase date, which shall be, subject to any contrary requirements of applicable law, no less than 30 days nor more than 60 days after the
date the Prepayment Offer Notice is mailed (the "PURCHASE DATE"), (v) the aggregate principal amount of Securities to be purchased, (vi) a description of the procedures which Holders of
Securities must follow in order to tender their Securities and the procedures that Holders of Securities must follow in order to withdraw an election to tender their Securities for payment and
(vii) all other instructions and materials necessary to enable Holders to tender Securities pursuant to the Prepayment Offer. 


        (2)   Not
later than the date upon which written notice of a Prepayment Offer is delivered to the Trustee as provided above, the Company shall deliver to the Trustee an
Officers' Certificate as to (i) the amount of the Prepayment Offer (the "OFFER AMOUNT"), (ii) the allocation of the Net Available Cash from the Asset Sales pursuant to which such
Prepayment Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(a). On such date, the
Company shall also irrevocably deposit with the Trustee or with the Paying Agent (or, if the Company or a Restricted Subsidiary is the Paying Agent, shall segregate and hold in trust) in Permitted
Short-Term Investments, maturing on the last day prior to the Purchase Date or on the Purchase Date if funds are immediately available by open of business, an amount equal to the Offer
Amount to be held for payment in accordance with the provisions of this Section. Upon the expiration of the period for which the Prepayment Offer remains open (the "OFFER PERIOD"), the Company shall
deliver to 


41







 



the
Trustee for cancellation the Securities or portions thereof which have been properly tendered to and are to be accepted by the Company. The Trustee or Paying Agent, as applicable, shall, on or
promptly after the Purchase Date, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the aggregate purchase price of the Securities delivered by
the Company to the Trustee is less than the Offer Amount, the Trustee shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in accordance with
this Section. 


        (3)   Holders
electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company at the address
specified in the notice at least three Business Days prior to the Purchase Date. Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than one Business
Day prior to the Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have such Security purchased. If at the expiration of the Offer Period the aggregate principal amount of Securities surrendered
by Holders exceeds the Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only
Securities in minimum denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall be purchased). Holders whose Securities are purchased only in part shall be issued new
Securities equal in principal amount to the unpurchased portion of the Securities surrendered. 


        (4)   At
the time the Company delivers Securities to the Trustee which are to be accepted for purchase, the Company shall also deliver an Officers' Certificate stating that
such Securities are to be accepted by the Company pursuant to and in accordance with the terms of this Section 4.06. A Security shall be deemed to have been accepted for purchase at the time
the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering Holder. 


        (d)   The
Company shall comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or
regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of Securities as described above. To the extent that the provisions of any securities laws
or regulations conflict with the provisions relating to the Prepayment Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its
obligations described above by virtue thereof. 


        SECTION
4.07.    LIMITATION ON TRANSACTIONS WITH AFFILIATES.    The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, conduct any business or enter into any transaction or series of transactions (including the sale, transfer, disposition, purchase, exchange or lease
of Property, the making of any Investment, the giving of any Guarantee or the rendering of any service) with or for the benefit of any Affiliate of the Company (other than the Company or a Restricted
Subsidiary), unless (i) such transaction or series of transactions is on terms no less favorable to the Company or such Restricted Subsidiary than those that could be obtained in a comparable
arm's-length transaction with a Person that is not an Affiliate of the Company or such Restricted Subsidiary, and (ii) with respect to a transaction or series of transactions involving
aggregate payments by or to the Company or such Restricted Subsidiary having a Fair Market Value equal to or in excess of (a) $5,000,000 but less than $10,000,000, an Officer of the Company
certifies that such transaction or series of transactions complies with clause (i) of this paragraph, as evidenced by an Officers' Certificate delivered to the Trustee, (b) $10,000,000
but less than $75,000,000, the Board of Directors of the Company (including a majority of the disinterested members of such Board of Directors) approves such transaction or series of transactions and
certifies that such transaction or series of transactions complies with clause (i) of this paragraph, as evidenced by a certified resolution delivered to the Trustee or (c) $75,000,000,
(1) the Company receives from an independent, nationally recognized investment banking firm or appraisal firm, in either case specializing or having a specialty in 


42







 



the
type and subject matter of the transaction (or series of transactions) at issue, a written opinion that such transaction (or series of transactions) is fair, from a financial point of view, to the
Company or such Restricted Subsidiary and (2) the Board of Directors of the Company (including a majority of the disinterested members of such Board of Directors) approves such transaction or
series of transactions and certifies that such transaction or series of transactions complies with clause (i) of this paragraph, as evidenced by a certified resolution delivered to the Trustee. 


        The
limitations of the preceding paragraph do not apply to (i) the payment of reasonable and customary regular fees to directors of the Company or any of its Restricted
Subsidiaries who are not employees of the Company or any of its Restricted Subsidiaries, (ii) indemnities of officers and directors of the Company or any Subsidiary consistent with such
Person's charter, bylaws and applicable statutory provisions, (iii) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans approved by the Board of Directors of the Company, (iv) loans made (a) to officers, directors or employees of the
Company or any Restricted Subsidiary approved by the Board of Directors (or by a duly authorized officer) of the Company, the proceeds of which are used solely to purchase common stock of the Company
in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a
principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to this clause (iv),
(v) advances and loans to officers, directors and employees of the Company or any Subsidiary in the ordinary course of business; PROVIDED such loans and advances (excluding loans or advances
made pursuant to the preceding clause (iv)) do not exceed $10,000,000 at any one time outstanding, (vi) any Restricted Payment permitted to be paid pursuant to Section 4.04,
(vii) any issuance of Capital Stock (other than Redeemable Stock) of the Company to, or receipt of a capital contribution from, Affiliates (or a Person who becomes an Affiliate) of the Company;
or (viii) any transaction or series of transactions pursuant to any agreement or obligation of the Company or any of its Restricted Subsidiaries in effect on the Issue Date. 



        SECTION
4.08.    LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES.    The Company will
not (a) permit any Restricted Subsidiary to issue any Capital Stock other than to the Company or one of its Wholly Owned Subsidiaries or (b) permit any Person other than the Company or a
Wholly Owned Subsidiary to own any Capital Stock of any other Restricted Subsidiary (other than directors' qualifying shares), except, in each case, for (i) the sale of the Capital Stock of a
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary effected in accordance with Section 4.06; (ii) the issuance of Capital Stock by a Restricted Subsidiary to a
Person other than the Company or a Restricted Subsidiary and (iii) the Capital Stock of a Restricted Subsidiary owned by a Person at the time such Restricted Subsidiary became a Restricted
Subsidiary or acquired by such Person in connection with the formation of the Restricted Subsidiary, or transfers thereof; PROVIDED that any sale or issuance of Capital Stock of a Restricted
Subsidiary shall be deemed to be an Asset Sale to the extent the percentage of the total outstanding Voting Stock of such Restricted Subsidiary owned directly and indirectly by the Company is reduced
as a result of such sale or issuance; PROVIDED FURTHER that if a Person whose Capital Stock was issued or sold in a transaction described in this Section is, as a result of such transaction, no longer
a Restricted Subsidiary, then the Fair Market Value of Capital Stock of such Person retained by the Company and the other Restricted Subsidiaries shall be treated as an Investment for purposes of
Section 4.04. In the event of the consummation of a sale of all the Capital Stock of a Restricted Subsidiary pursuant to the foregoing clause (i) and the execution and delivery of a
supplemental indenture in form satisfactory to the Trustee, any such Restricted Subsidiary that is also a Subsidiary Guarantor shall be released from all its obligations under its Subsidiary
Guarantee. 


43







 



        SECTION
4.09.    CHANGE OF CONTROL.    (a) Upon the occurrence of a Change of Control, each Holder of
Securities shall have the right to require the Company to repurchase all or any part (equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof) of such Holder's
Securities pursuant to the offer described below (the "CHANGE OF CONTROL OFFER") at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of purchase, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date (the "CHANGE OF CONTROL PAYMENT"). 


        (b)   Within
30 days following any Change of Control, unless the Company has exercised its right to redeem all of the Securities in accordance with  Article III, the Company shall mail a notice to each
Holder stating, among other things: (i) that a Change of Control has occurred and a
Change of Control Offer is being made pursuant to this Indenture and that all Securities (or portions thereof) properly tendered will be accepted for payment; (ii) the purchase price and the
purchase date, which shall be, subject to any contrary requirements of applicable law, no fewer than 30 days nor more than 60 days from the date the Company mails such notice (the
"CHANGE OF CONTROL PAYMENT DATE"); (iii) that any Security (or portion thereof) accepted for payment (and duly paid on the Change of Control Payment Date) pursuant to the Change of Control
Offer shall cease to accrue interest on the Change of Control Payment Date; (iv) that any Securities (or portions thereof) not properly tendered will continue to accrue interest; (v) a
description of the transaction or transactions constituting the Change of Control; (vi) the procedures that Holders of Securities must follow in order to tender their Securities (or portions
thereof) for payment and the procedures that Holders of Securities must follow in order to withdraw an election to tender Securities (or portions thereof) for payment; and (vii) all other
instructions and materials necessary to enable Holders to tender Securities pursuant to the Change of Control Offer. Prior to the mailing of the notice to Holders of Securities described above, but in
any event within 30 days following any Change of Control, the Company covenants to (A) repay or cause to be repaid in full all Indebtedness of the Company and any Subsidiary Guarantor
that would prohibit the repurchase of the Securities pursuant to such Change of Control Offer or (B) obtain any requisite consents under instruments governing any such Indebtedness of the
Company and any Subsidiary Guarantor to permit the repurchase of the Securities. The Company shall first comply with the covenant in the preceding sentence before it shall repurchase Securities
pursuant to this Section. 


        (c)   Holders
electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company at the address
specified in the notice at least three Business Days prior to the Change of Control Payment Date. Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later
than one Business Day prior to the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which
was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Security purchased. 


        (d)   On
or prior to the Change of Control Payment Date, the Company shall irrevocably deposit with the Trustee or with the Paying Agent (or, if the Company or any Restricted
Subsidiary is acting as the Paying Agent, segregate and hold in trust) in cash an amount equal to the Change of Control Payment payable to the Holders entitled thereto, to be held for payment in
accordance with the provisions of this Section. 


        (e)   On
the Change of Control Payment Date, the Company shall deliver to the Trustee the Securities or portions thereof which have been properly tendered to and are to be
accepted by the Company for payment. The Trustee or Paying Agent, as applicable, shall, on or promptly after the Change of Control Payment Date, mail or deliver payment to each tendering Holder of the
Change of Control Payment. In the event that the aggregate Change of Control Payment delivered by the Company to the Trustee is less than the amount deposited with the Trustee, the Trustee shall
deliver the excess to the Company immediately after the Change of Control Payment Date. 


44









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



        (g)   The
Company will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of Securities in connection with a Change of Control. To the extent that the provisions of
any securities laws or regulations conflict with the provisions relating to the Change of Control Offer, the Company will comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations described above by virtue thereof. 


        (h)   In
the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Securities accept a Change of Control Offer and the Company purchases
all of the Securities held by such Holders, the Company will have the right, upon not less than 30 nor more than 60 days' prior notice, given in accordance with  Article III not more than
30 days following the purchase pursuant to the Change of Control Offer described above, to redeem all of the
Securities that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment plus, to the extent not included in the Change of Control Payment, accrued and
unpaid interest on the Securities that remain outstanding, to, but not including, the date of redemption (subject to the right of the Holders on the relevant record date to receive interest due on an
interest payment date that is on or prior to the redemption date). 


        SECTION
4.10.    LIMITATION ON LIENS.    The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into, create, incur, assume or suffer to exist any Lien on or with respect to any Property of the Company or such Restricted Subsidiary securing Indebtedness, whether
owned on the Issue Date or acquired thereafter, or any interest therein or any income or profits therefrom, unless the Securities or any Subsidiary Guarantee of such Restricted Subsidiary, as
applicable, are secured equally and ratably with (or prior to) such Indebtedness for so long as such Indebtedness is secured, except that the Company and its Restricted Subsidiaries may enter into,
create, incur, assume or suffer to exist Permitted Liens. 


        SECTION
4.11.    COMPLIANCE CERTIFICATE.    The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Company is taking or proposes to take with respect thereto. 



        SECTION
4.12.    FURTHER INSTRUMENTS AND ACTS.    Upon request of the Trustee, the Company shall execute and deliver
such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. 


        SECTION
4.13.    FUTURE SUBSIDIARY GUARANTORS.    The Company shall cause each Domestic Restricted Subsidiary having
an aggregate of $25,000,000 or more of Indebtedness and Preferred Stock outstanding at any time to promptly execute and deliver to the Trustee a supplemental indenture in accordance with  Section 10.06. In addition, any Restricted Subsidiary that Guarantees Indebtedness of the Company will be required to execute and deliver to the
Trustee a supplemental indenture in accordance with Section 10.06. 


        SECTION
4.14.    RESTRICTED AND UNRESTRICTED SUBSIDIARIES.    Unless defined or designated as an Unrestricted
Subsidiary, any Person that becomes a Domestic Subsidiary or a 


45







 



Canadian
Subsidiary of the Company or any of its Restricted Subsidiaries shall be classified as a Restricted Subsidiary subject to the provisions of the next paragraph. The Company may designate a
Subsidiary (including a newly formed or newly acquired Subsidiary) of the Company or any of its Restricted Subsidiaries as an Unrestricted Subsidiary only if: (a) such Subsidiary does not at
such time own any Capital Stock or Indebtedness of, or own or hold any Lien on any Property of, the Company or any other Restricted Subsidiary; (b) such Subsidiary does not at such time have
any Indebtedness or other obligations which, if in default, would result (with the passage of time or notice or otherwise) in a default on any Indebtedness of the Company or any Restricted Subsidiary;
(c)(i) such designation is effective immediately upon such Subsidiary becoming a Subsidiary of the Company or of a Restricted Subsidiary, (ii) the Subsidiary to be so designated has
total assets of $1,000 or less or (iii) if such Subsidiary has assets greater than $1,000, then such redesignation as an Unrestricted Subsidiary is deemed to constitute a Restricted Payment in
an amount equal to the Fair Market Value of the Company's direct and indirect ownership interest in such Subsidiary and such Restricted Payment would be permitted to be made at the time of such
designation under Section 4.04; (d) such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or
substantially all of the business of the Company and its Subsidiaries; (e) such Subsidiary is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any
direct or indirect obligation: (i) to subscribe for additional Capital Stock of such Person; or (ii) to maintain or preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and (f) on the date such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary with terms substantially less favorable to the Company than those that might have been obtained from Persons who are not
Affiliates of the Company. Except as provided in the next succeeding paragraph, no Unrestricted Subsidiary may be redesignated as a Restricted Subsidiary. The designation of an Unrestricted Subsidiary
or removal of such designation shall be made by the Board of Directors of the Company or a committee thereof pursuant to a certified resolution delivered to the Trustee and shall be effective as of
the date specified in the applicable certified resolution, which shall not be prior to the date such certified resolution is delivered to the Trustee. If, at any time, any Unrestricted Subsidiary
would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be Incurred as of such date. 


        The
Company will not redesignate an Unrestricted Subsidiary as a Restricted Subsidiary unless, after giving effect to such action, (i) the Company could Incur at least $1.00 of
additional Indebtedness pursuant to clause (a) of Section 4.03 and (ii) no Default or Event of Default would occur or be continuing. 


        SECTION
4.15.    TERMINATION OF CERTAIN COVENANTS.    In the event that any time (a) the rating assigned to the
Securities by either S&P or Moody's is at least an Investment Grade Rating, (b) the obligations under the Bank Credit Facilities cease to be secured and (c) no Default or Event of
Default shall have occurred and be continuing, the Company and its Restricted Subsidiaries shall have no further obligation to comply with the covenants set forth in Section 4.03 (Limitation On
Indebtedness),
Section 4.04 (Limitation On Restricted Payments), Section 4.08 (Limitation On Issuance And Sale of Capital Stock of Restricted Subsidiaries), Section 4.06 (Limitation On Asset
Sales), Section 4.05 (Limitation on Restrictions On Distributions From Restricted Subsidiaries) and Section 4.13 (Future Subsidiary Guarantors). In addition, if the conditions set forth
in clauses (a), (b) and (c) of the preceding sentence are satisfied, the Company will no longer be obligated to comply with the financial tests set forth in clause (f) of
Section 5.01. 


        SECTION
4.16.    REGISTRATION DEFAULT.    If a Registration Default occurs, the Company shall deliver to the Trustee a
certificate to that effect stating (i) the amount of additional interest to be 


46







 



paid
to each Holder of Registrable Securities (as defined in the applicable Registration Rights Agreement), and (ii) the date on which such additional interest is payable. Unless and until a
Trust Officer receives such a certificate at its Corporate Trust Office, the Trustee shall assume without inquiry that no such additional interest is payable. If the Company has paid such additional
interest directly to the Holders entitled to such interest, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment. 


ARTICLE V  


 SUCCESSOR COMPANY  


        SECTION
5.01.    WHEN COMPANY MAY MERGE OR TRANSFER ASSETS.    The Company shall not consolidate with or merge with or
into any Person, or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all the Property of the Company and its Restricted Subsidiaries, taken as a whole,
unless: 



        (a)   the
resulting, surviving or transferee person (the "SUCCESSOR COMPANY") shall be a Person organized or existing under the laws of (i) the United States of
America, any State thereof or the District of Columbia or (ii) Canada or any province thereof; 



        (b)   if
the Successor Company is not the Company, a supplemental indenture is executed and delivered to the Trustee, in form satisfactory to the Trustee, by the Successor
Company expressly assuming the obligations of the Company to pay the principal of and interest on the Securities and to perform all the covenants of the Company under this Indenture (in which case the
Successor Company shall be
considered the issuer of the Securities) and the obligations of the Company under the Registration Rights Agreement; 


        (c)   if
the Successor Company is not the Company, each Subsidiary Guarantor shall execute and deliver to the Trustee a supplemental indenture, in form satisfactory to the
Trustee, confirming the obligation of such Subsidiary Guarantor to pay the principal of and interest on the Securities pursuant to such Subsidiary Guarantor's Subsidiary Guarantee and shall have by
written agreement confirmed that its obligations under the Registration Rights Agreement shall continue to be in effect; 


        (d)   in
the case of a conveyance, transfer or lease of all or substantially all the Property of the Company and its Restricted Subsidiaries, taken as a whole, such Property
shall have been so conveyed, transferred or leased as an entirety or virtually as an entirety to one Person; 


        (e)   immediately
after giving effect to such transaction (and treating, for purposes of this clause (e) and clauses (f) and (g) below, any Indebtedness
which becomes or is anticipated to become an obligation of the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by such Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; 


        (f)    other
than with respect to the consolidation of the Company with or merger of the Company with or into, or the conveyance, transfer or lease of all or substantially all
the Property of the Company and its Restricted Subsidiaries, taken as a whole, to a Wholly Owned Subsidiary, immediately after giving effect to such transaction, the Successor Company would be able to
Incur an additional $1.00 of Indebtedness pursuant to clause (a) of Section 4.03; and 



        (g)   the
Company shall have delivered to the Trustee an Officers' Certificate, stating that such consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture. 



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        The
Successor Company shall be the successor to the Company and shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture, and,
except in the case of the lease of all or substantially all the Property of the Company and its Restricted Subsidiaries, taken as a whole, the Company shall be released from its obligations under this
Indenture and the Registration Rights Agreement. 


ARTICLE VI  


 DEFAULTS AND REMEDIES  


        SECTION
6.01.    EVENTS OF DEFAULT.    The following events shall be "Events of Default": 



        (a)   the
Company defaults in any payment of interest on any Security when the same becomes due and payable and such default continues for a period of 30 days; 


        (b)   the
Company defaults in the payment of the principal (and premium, if any) of any Security when the same becomes due and payable at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise; 


        (c)   the
Company fails to comply with Article V; 


        (d)   default
in the performance, or breach, of any covenant or warranty of the Company or any Subsidiary Guarantor in this Indenture (other than a covenant or warranty
addressed in clauses (a), (b) or (c) above) and continuance of such default or breach for a period of 60 days after the notice specified below; 


        (e)   default
by the Company or any Restricted Subsidiary under any Indebtedness for borrowed money (other than Non-Recourse Purchase Money Indebtedness) of the
Company or any Restricted Subsidiary which results in acceleration of the maturity of such Indebtedness, or the failure to pay such Indebtedness at maturity, in an amount greater than $25,000,000 or
its foreign currency equivalent at the time if such Indebtedness is not discharged or such acceleration is not rescinded or annulled within 10 days after the notice specified below; 


        (f)    the
Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: 



          (i)  commences
a voluntary case; 


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


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



        (iv)  makes
a general assignment for the benefit of its creditors or files a proposal or other scheme of arrangement involving the rescheduling or composition of its
indebtedness; or 


         (v)  files
a petition in bankruptcy or an answer or consent seeking reorganization or relief or consents to the filing of such petition in bankruptcy or the appointment of or
taking possession by a Custodian; 




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


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



          (i)  is
for relief against the Company or any Significant Subsidiary in an involuntary case; 


         (ii)  appoints
a Custodian of the Company or any Significant Subsidiary or for any substantial part of its property; 




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        (iii)  orders
the winding up or liquidation of the Company or any Significant Subsidiary; or 


        (iv)  any
similar relief is granted under any foreign laws; 




and
in each such case the order or decree remains unstayed and in effect for 60 days; 


        (h)   one
or more final judgments or orders by a court of competent jurisdiction are entered against the Company or any Restricted Subsidiary in an uninsured or unindemnified
aggregate amount outstanding at any time in excess of $25,000,000 and such judgments or orders are not discharged, waived, stayed, satisfied or bonded for a period of 60 consecutive days; 


        (i)    a
Subsidiary Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that taken together as of the latest audited consolidated financial statements for
the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of this Indenture and such
Subsidiary Guarantee) or a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee 




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


        The
term "BANKRUPTCY LAW" means Title 11, UNITED STATES CODE, or any similar Federal or state law for the relief of debtors, or the Bankruptcy and Insolvency Act (Canada), the Companies'
Creditors Arrangements Act (Canada) or any similar federal or provincial law in Canada for the relief of debtors. The term "CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law. 


        A
Default under clause (d) or (e) is not an Event of Default until the Trustee or the Holders of at least 25% in aggregate principal amount of the outstanding Securities
notify the Company in writing of such Default and the Company does not cure such Default within the time specified after receipt of such notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default." 


        The
Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers' Certificate of any Event of Default or Default,
its status and what action the Company is taking or proposes to take with respect thereto. 


        SECTION
6.02.    ACCELERATION.    If an Event of Default (other than an Event of Default specified in
Section 6.01(f) or (g) with respect to the Company) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the
Securities by notice to the Company and the Trustee, may declare the principal of the Securities to be due and payable. Upon such a declaration, such principal shall be due and payable immediately. If
an Event of Default specified in Section 6.01(f) or (g) with respect to the Company occurs, the principal of the Securities shall automatically and without any action by the Trustee or
any Holder, become immediately due and payable. The Holders of a majority in aggregate principal amount of the outstanding Securities by notice to the Trustee and the Company may rescind any
declaration of acceleration if the rescission would not conflict with any judgment or decree, and if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely because of the acceleration. No such rescission shall affect any subsequent Default or impair any right consequent
thereto. 


        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 of, premium, if any, or interest on the Securities or to enforce the performance of any provision of the Securities or this 


49







 



Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative. 


        SECTION
6.04.    WAIVER OF PAST DEFAULTS.    The Holders of a majority in aggregate principal amount of the Securities
by notice to the Trustee may waive an existing Default and its consequences except (a) a Default in the payment of the principal of, premium, if any, or interest on a Security or (b) a
Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Securityholder affected. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right. 



        SECTION
6.05.    CONTROL BY MAJORITY.    The Holders of a majority in aggregate principal amount of the Securities may
direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to the Securities.
However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal liability; PROVIDED, HOWEVER, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled to reasonable indemnity against all losses and expenses caused by taking or not taking such action. 


        SECTION
6.06.    LIMITATION ON SUITS.    A Securityholder will have no right to institute any proceeding with respect
to this Indenture or for the appointment of a receiver or trustee, and it may not pursue any other remedy with respect to this Indenture or the Securities unless: 



        (a)   such
Holder shall have previously given to the Trustee written notice of a continuing Event of Default; 



        (b)   the
Holders of at least 25% in aggregate principal amount of the Securities then outstanding shall have made a written request, and such Holder of or Holders shall have
offered reasonable indemnity, to the Trustee to pursue such proceeding as trustee; and 


        (c)   the
Trustee has failed to institute such proceeding and has not received from the Holders of at least a majority in aggregate principal amount of the Securities
outstanding a direction inconsistent with such request, within 60 days after such notice, request and offer. 




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


        SECTION
6.07.    RIGHTS OF HOLDERS TO RECEIVE PAYMENT.    Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of, premium, if any, and interest on the Securities held by such Holder, on or after the respective due dates expressed in this Securities, or to
bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. 



        SECTION
6.08.    COLLECTION SUIT BY TRUSTEE.    If an Event of Default specified in Section 6.01(a) or
(b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07. 


        SECTION
6.09.    TRUSTEE MAY FILE PROOFS OF CLAIM.    The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company or the Subsidiary Guarantors,
their creditors or their property and, unless prohibited by law 


50







 



or
applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. 


        SECTION
6.10.    PRIORITIES.    If the Trustee collects any money or property pursuant to this Article VI, it
shall pay out the money or property in the following order: 



        FIRST:
to the Trustee for amounts due under Section 7.07; 


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


        THIRD:
to the Company. 




        The
Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section. At least 15 days before such record date, the Company shall mail to
each Securityholder and the Trustee a notice that states the record date, the payment date and amount to be paid. 



        SECTION
6.11.    UNDERTAKING FOR COSTS.    In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than
10% in aggregate principal amount of the Securities. 


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


ARTICLE VII  


 TRUSTEE  


        SECTION
7.01.    DUTIES OF TRUSTEE.    (a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs. 


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



          (i)  the
Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and 



51







 

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




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



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


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


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




        (d)   Every
provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. 


        (e)   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. 


        (f)    Money
held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 


        (g)   No
provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it. 


        (h)   Every
provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this
Section and to the provisions of the TIA. 


        SECTION
7.02.    RIGHTS OF TRUSTEE.    (a) The Trustee may rely on 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 the Company to deliver an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the Officers' Certificate or Opinion of Counsel. 


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


        (d)   The
Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; PROVIDED,
HOWEVER, that the Trustee's conduct does not constitute willful misconduct or negligence. 


        (e)   The
Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and
complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. 


        SECTION
7.03.    INDIVIDUAL RIGHTS OF TRUSTEE.    The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, 


52







 



Registrar
or co-registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. 


        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 Securities, it shall not be accountable for the Company's use of the proceeds from the Securities, and it shall not be responsible for any statement
of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee's certificate of authentication. 


        SECTION
7.05.    NOTICE OF DEFAULTS.    If a Default occurs and is continuing and if it is known to a Trust Officer,
the Trustee shall mail to each Securityholder notice of the Default within 90 days after it is known to a Trust Officer or written notice of it is received by a Trust Officer. Except in the
case of a Default in payment of principal of, premium, if any, or interest on any Security, the Trustee may withhold the notice if and so long as a committee of its trust officers in good faith
determines that withholding the notice is in the interests of Securityholders. Where notice of the occurrence of any Default is given by the Trustee under this Section and the Default is thereafter
cured, the Trustee, within 30 days after the curing of the Default is known to a Trust Officer, shall mail to all Securityholders notice that the Default is no longer continuing. 


        SECTION
7.06.    REPORTS BY TRUSTEE TO HOLDERS.    As promptly as practicable after each May 15 beginning with
May 15, 2008, and in any event prior to July 15 in each year, the Trustee shall mail to each Securityholder a brief report dated as of May 15 each year that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Section 313(b). 


        A
copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to
notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof. 


        SECTION
7.07.    COMPENSATION AND INDEMNITY.    The Company shall pay to the Trustee from time to time reasonable
compensation for its services. 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 upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company shall indemnify the Trustee against any and all loss, liability
or expense (including attorneys' fees) incurred by it in connection with the acceptance and
administration of this trust and the performance of its duties hereunder. 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 of its obligations hereunder. The Company shall defend the claim and the Trustee may have separate counsel and the Company shall pay the fees and
expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith. The Company need not pay for any settlement made by the Trustee without the Company's consent, such consent not to be unreasonably withheld. 


        To
secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than
money or property held in trust to pay principal of and interest on particular Securities. 



        The
Company's payment obligations pursuant to this Section shall survive the discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(f) or (g), the expenses are intended to constitute expenses of administration under the Bankruptcy Law. 


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        SECTION
7.08.    REPLACEMENT OF TRUSTEE.    The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in aggregate principal amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if: 



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


        (2)   the
Trustee is adjudged bankrupt or insolvent; 


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


        (4)   the
Trustee otherwise becomes incapable of acting. 




        If
the Trustee resigns, is removed by the Company, or by the Holders of a majority in aggregate principal amount of the Securities and such Holders do not reasonably promptly appoint a
successor
Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. No successor Trustee shall accept its appointment unless, at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article VII. 


        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 Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07. 


        If
a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in aggregate principal
amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. 



        If
the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee. 


        Notwithstanding
the replacement of the Trustee pursuant to this Section, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. 


        SECTION
7.09.    SUCCESSOR TRUSTEE BY MERGER.    If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association
without any further act shall be the successor Trustee. 


        In
case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall
have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and
in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the
name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the
Trustee shall have. 


        SECTION
7.10.    ELIGIBILITY; DISQUALIFICATION.    The Trustee shall at all times satisfy the requirements of TIA
Section 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the 


54







 



operation
of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if
the requirements for such exclusion set forth in TIA Section 310(b)(1) are met. If at any time the Trustee shall cease to be eligible in accordance with this Section, it shall resign promptly
in the manner and with the effect specified in this Article VII. 


        SECTION
7.11.    PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.    The Trustee shall comply with 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. 


ARTICLE VIII  


 DISCHARGE OF INDENTURE; DEFEASANCE  


        SECTION
8.01.    DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.    (a) When (i) the Company delivers
to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.09) for cancellation, (ii) all outstanding Securities have become due and payable at their
fixed maturity or (iii) all outstanding Securities are to become due and payable within one year or are to be called for redemption within one year pursuant to Article III, and the
Company irrevocably deposits with the Trustee funds sufficient to pay at fixed maturity or upon redemption all outstanding Securities, including interest thereon to fixed maturity or such redemption
date (other than Securities replaced pursuant to Section 2.09), and if in either case the Company pays all other sums payable hereunder, then this Indenture shall, subject to
Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company, as the case may be. 


        (b)   Subject
to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all its obligations under the Securities and this Indenture ("LEGAL DEFEASANCE
OPTION") or (ii) its obligations under Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.13 and 4.14, the operation of Sections 6.01(d) (to the extent relating to such other Sections),
6.01(e), 6.01(f) (with respect to Significant Subsidiaries), 6.01(g) (with respect to Significant Subsidiaries), 6.01(h) and 6.01(i), the obligations under Section 5.01(f) and the related
operation of Section 6.01(c) ("COVENANT DEFEASANCE OPTION"). The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. 


        If
the Company exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default. If the Company exercises its covenant defeasance
option, payment of the Securities may not be accelerated because of an Event of Default specified in Sections 6.01(c) and 6.01(d) (with respect to the provisions of Articles IV and V referred to in
the immediately preceding paragraph) and Sections 6.01(e), 6.01(f) (with respect to Significant Subsidiaries), 6.01(g) (with respect to Significant Subsidiaries), 6.01(h) and 6.01(i). If the Company
exercises its legal defeasance option or its covenant defeasance option, each Subsidiary Guarantor, if any, shall be released from all its obligations under its Subsidiary Guarantee. 


        Upon
satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company
terminates. 


        (c)   Notwithstanding
clauses (a) and (b) above, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08, 8.05 and 8.06 shall
survive until the Securities have been paid in full. Thereafter, the Company's obligations in Sections 7.07 and 8.05 shall survive. 


55









  





        SECTION 8.02.    CONDITIONS TO DEFEASANCE.    The Company may exercise its legal defeasance option or its covenant
defeasance option only if: 



        (a)   the
Company irrevocably deposits in trust with the Trustee money or Government Obligations, or a combination thereof, for the payment of principal of, premium, if any,
and interest on the Securities to fixed maturity or redemption, as the case may be; 


        (b)   the
Company delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal
and interest when due and without reinvestment on the deposited Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be
sufficient to pay principal, premium, if any, and interest when due on all the Securities to fixed maturity or redemption, as the case may be; 


        (c)   123 days
pass after the deposit is made and during the 123-day period no Default specified in Section 6.01(f) or (g) with respect to the
Company occurs which is continuing at the end of the period; 


        (d)   the
deposit does not constitute a default under any other agreement binding on the Company; 


        (e)   the
Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940; 


        (f)    in
the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel in the U.S. stating 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 U.S. federal income tax
law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Securityholders will not recognize income, gain or loss for federal income tax purposes as a
result of such 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 defeasance had not occurred; 


        (g)   in
the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel in the U.S. to the effect that the Securityholders
will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such covenant defeasance had not occurred; and 



        (h)   the
Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the
Securities as contemplated by this Article VIII have been complied with. 




        Before
or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date in accordance with Article III. 


        SECTION
8.03.    APPLICATION OF TRUST MONEY.    The Trustee shall hold in trust money or Government Obligations
deposited with it pursuant to this Article VIII. It shall apply the deposited money and the money from Government Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of, premium, if any, and interest on the Securities. 


        SECTION
8.04.    REPAYMENT TO THE COMPANY.    The Trustee and the Paying Agent shall promptly turn over to the Company
upon request any excess money or securities held by them at any time. Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal, premium or interest 


56







 



that
remains unclaimed for two years, and, thereafter, Securityholders entitled to the money must look to the Company for payment as general creditors. 


        SECTION
8.05.    INDEMNITY FOR GOVERNMENT OBLIGATIONS.    The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against deposited Government Obligations or the principal and interest received on such Government Obligations. 



        SECTION
8.06.    REINSTATEMENT.    If the Trustee or Paying Agent is unable to apply any money or Government
Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this
Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Obligations in accordance with this Article VIII; PROVIDED, HOWEVER, that,
if the Company has made any payment of interest or premium on or principal of any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Obligations held by the
Trustee or Paying Agent. 


ARTICLE IX  


 AMENDMENTS  


        SECTION
9.01.    WITHOUT CONSENT OF HOLDERS.    The Company, the Subsidiary Guarantors and the Trustee may amend this
Indenture or the Securities without notice to or consent of any Securityholder: 



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


        (b)   to
comply with Article V; 


        (c)   to
provide for uncertificated Securities in addition to or in place of certificated Securities; 


        (d)   to
add or to remove Subsidiary Guarantors when permitted by the terms hereof, or to secure the Securities; 


        (e)   to
add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; 


        (f)    to
comply with any requirements of the SEC in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA; or 



        (g)   to
make any change that does not adversely affect the rights of any Securityholder in any material respect; PROVIDED, however, that any change to this Indenture to
conform it to the "Description of notes" in the Company's offering memorandum relating to the Initial Securities shall not be deemed to adversely affect such rights. 




        After
an amendment under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. 



        SECTION
9.02.    WITH CONSENT OF HOLDERS.    The Company, the Subsidiary Guarantors and the Trustee may amend this
Indenture or the Securities with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities, and such Holders may waive 


57







 



compliance
by the Company with its covenants contained herein. However, without the consent of each Securityholder affected thereby an amendment or waiver may not: 



        (a)   reduce
the amount of Securities whose Holders must consent to an amendment or waiver; 


        (b)   reduce
the rate of or change the time for payment of interest on any Security; 


        (c)   reduce
the principal of or extend the Stated Maturity of any Security; 


        (d)   reduce
the premium payable upon the redemption or repurchase of any Security in accordance with Article III or  Section 4.06 or 4.09; 



        (e)   at
any time after a Change of Control or an Asset Sale has occurred, change the time at which the Change of Control Offer or Prepayment Offer relating thereto must be
made or at which the Securities must be repurchased pursuant to such Change of Control Offer or Prepayment Offer; 


        (f)    make
any Security payable in a currency other than that stated in the Security; 


        (g)   make
any change in any Subsidiary Guarantee that would adversely affect the Securityholders or reduce the relative ranking of the Securities; 



        (h)   impair
the right of any Holder to institute suit for enforcement of any payment on or with respect to such Holder's Securities or any Subsidiary Guarantee; 


        (i)    release
any security that may have been granted to the Trustee in respect of the Securities, except as permitted by this Indenture; 


        (j)    make
any change in Section 6.04 or 6.07 or the second sentence of this Section; and 



        (k)   cause
the Company or any Subsidiary Guarantor to be required to make any deduction or withholding from payments made under or with respect to the Securities or any
Subsidiary Guarantee. 




        Any
consent of the Holders under this Section may be evidenced by an electronic transmission that conforms to DTC's applicable procedures. 


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


        After
an amendment under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. 


        SECTION
9.03.    COMPLIANCE WITH TRUST INDENTURE ACT.    Every amendment to this Indenture or the Securities shall
comply with the TIA as then in effect. 


        SECTION
9.04.    REVOCATION AND EFFECT OF CONSENTS AND WAIVERS.    A consent to an amendment or a waiver by a Holder
of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder's Security, even if notation of the
consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment becomes effective, it shall bind every Securityholder. An amendment becomes effective
upon the execution of such amendment by the Trustee. 


58







 



        The
Company may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to give their consent or take any other action described
above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at
such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not
such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. 


        SECTION
9.05.    NOTATION ON OR EXCHANGE OF SECURITIES.    If an amendment changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. 


        SECTION
9.06.    TRUSTEE TO SIGN AMENDMENTS.    The Trustee shall sign any amendment authorized pursuant to this
Article IX if such amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment
the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate
and an Opinion of Counsel of the Company stating that such amendment is authorized or permitted by this Indenture. 


 
 

ARTICLE X    
    
    SUBSIDIARY GUARANTEES    
    


        SECTION
10.01.    SUBSIDIARY GUARANTEE.    Each Subsidiary Guarantor hereby unconditionally guarantees, jointly and
severally, to each Holder and to the Trustee and its successors and assigns, (a) the full and punctual payment of principal of, premium, if any, and interest on the Securities when due, whether
at Stated Maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Company under this Indenture and the Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the Company under this Indenture and the Securities (all the foregoing being hereinafter collectively called the "Obligations").
Each Subsidiary Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor will remain bound under this Article X notwithstanding any extension or renewal of any Obligation. 



        Each
Subsidiary Guarantor waives presentation to, demand of, payment from and protest to the Company of any of the Obligations and also waives notice of protest for nonpayment. Each
Subsidiary Guarantor waives notice of any default under the Securities or the Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (i) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Securities or any other agreement or otherwise;
(ii) any extension or renewal of any thereof; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other
agreement; (iv) the release of any security held by any Holder or the Trustee for the Obligations or any of them; (v) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Obligations; or (vi) any change in the ownership of such Subsidiary Guarantor, except as provided in the last paragraph of this Section. 


59







 



        Each
Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection)
and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Obligations. 


        Except
as expressly set forth in Sections 4.08, 8.01(b), 10.03 and the last paragraph of this Section, the obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law or equity. 


        Each
Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part
thereof, of principal of, premium, if any, or interest on any Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise. 


        In
furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon
the failure of the Company to pay the principal of, premium, if any, or interest on any Obligation when and as the same shall become due, whether at Stated Maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, each Subsidiary Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid,
in cash, to the Holders or the Trustee an amount equal to the sum of (A) the unpaid amount of such Obligations, (B) accrued and unpaid interest on such Obligations (but only to the
extent not prohibited by law) and (C) all other monetary Obligations of the Company to the Holders and the Trustee. 


        Each
Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in respect of any Obligations guaranteed hereby until payment in full in cash of all
Obligations. Each Subsidiary Guarantor further agrees that, as between it, 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 VI for the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein, 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 VI, such
Obligations (whether or not due and payable) shall forthwith become due and payable by such Subsidiary Guarantor for the purposes of this Section. 


        Each
Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Holder in enforcing any rights under
this Section. 


        The
Subsidiary Guarantee of each Subsidiary Guarantor will be released: (a) in connection with any sale or other disposition of all or substantially all of the properties or
assets of that Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the
Company, if the sale or other disposition complies with Section 4.06; (b) in connection with any sale or other disposition of all of the
Capital Stock of that Subsidiary Guarantor to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other disposition
complies 


60







 



with  Section 4.06; (c) if the Company designates any Restricted Subsidiary that is a Subsidiary Guarantor as an Unrestricted Subsidiary in
accordance with the applicable provisions of this Indenture; (d) if the Company exercises its legal defeasance option or its covenant defeasance option as provided in  Section 8.01(b) or upon
satisfaction and discharge of this Indenture as provided in  Section 8.01(a); or (e) at such time as such Subsidiary Guarantor ceases to Guarantee any other Indebtedness of the Company,
provided that
at such time it does not have outstanding an aggregate of $25.0 million or more of Indebtedness and Preferred Stock. 



        SECTION
10.02.    CONTRIBUTION.    Each of the Company and any Subsidiary Guarantor (each a "CONTRIBUTING PARTY")
agrees that, in the event a payment shall be made by any Subsidiary
Guarantor under its Subsidiary Guarantee (the "CLAIMING GUARANTOR"), each Contributing Party shall indemnify the Claiming Guarantor in an amount equal to the amount of such payment multiplied by a
fraction, the numerator of which shall be the net worth of the Contributing Party on the date hereof and the denominator of which shall be the aggregate net worth of the Company and all the Subsidiary
Guarantors on the date hereof (or, in the case of any Subsidiary Guarantor becoming a party hereto pursuant to Section 9.01, the date of the amendment hereto executed and delivered by such
Subsidiary Guarantor). 


        SECTION
10.03.    SUCCESSORS AND ASSIGNS.    This Article X shall be binding upon the Company and each
Subsidiary Guarantor and each of their respective successors and assigns and shall enure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer
or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this Indenture. 


        SECTION
10.04.    NO WAIVER.    Neither a failure nor a delay on the part of either the Trustee or the Holders in
exercising any right, power or privilege under this Article X shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Article X at law, in equity, by statute or otherwise. 



        SECTION
10.05.    MODIFICATION.    No modification, amendment or waiver of any provision of this Article X, nor
the consent to any departure by the Company or any Subsidiary Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver
or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Company or any Subsidiary Guarantor in any case shall entitle the Company
or such Subsidiary Guarantor to any other or further notice or demand in the same, similar or other circumstances. 



        SECTION
10.06.    EXECUTION OF SUPPLEMENTAL INDENTURE FOR FUTURE SUBSIDIARY GUARANTORS.    Each Subsidiary which is
required to become a Subsidiary Guarantor pursuant to Section 4.13 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto pursuant to
which such Subsidiary shall become a Subsidiary Guarantor under this Article X and shall guarantee the Obligations. Concurrently with the execution and delivery of such supplemental indenture,
the Company shall deliver to the Trustee an Opinion of Counsel to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and that, subject to
the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors' rights generally and to the principles of equity, whether
considered in a proceeding at law or in equity, the Subsidiary Guarantee of such Subsidiary Guarantor is a legal, valid and binding obligation of such Subsidiary Guarantor, enforceable against such
Subsidiary Guarantor in accordance with its terms. 


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ARTICLE XI    
    
    MISCELLANEOUS    
    


        SECTION
11.01.    TRUST INDENTURE ACT CONTROLS.    If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. 


        SECTION
11.02.    NOTICES.    Any notice or communication shall be in English and in writing and delivered in person
or mailed by first-class mail or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) and addressed as follows: 



if
to the Company or any Subsidiary Guarantor: 



Forest
Oil Corporation

707 17th Street Suite 3600

Denver, CO 80202

Telecopy No: (303) 812-1445

Attention of Cyrus D. Marter, IV 




if
to the Trustee: 



U.S.
Bank National Association

Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT 06103

Attention: Kathy L. Mitchell

Facsimile: (860) 241-6881 





        The
Company or any Subsidiary Guarantor, on the one hand, or the Trustee, on the other hand, by notice to the other may designate additional or different addresses for subsequent notices
or communications. 


        Any
notice or communication mailed to a Securityholder shall be mailed to the Securityholder at the Securityholder's address as it appears on the registration books of the Registrar and
shall be sufficiently given if so mailed within the time prescribed. 


        Failure
to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is
mailed in the manner provided above, it is duly given, whether or not the addressee receives it. 


        SECTION
11.03.    COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.    Securityholders may communicate pursuant to TIA
Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c). 


        SECTION
11.04.    CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.    Upon any request or application by the
Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee: 



        (a)   an
Officers' Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied with; and 


        (b)   an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been
complied with. 



62







 





        SECTION
11.05.    STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.    Each certificate or opinion with respect to
compliance with a covenant or condition provided for in this Indenture shall include: 



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


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


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


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




        SECTION
11.06.    WHEN SECURITIES DISREGARDED.    In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities 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 disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered
in any such determination. 


        SECTION
11.07.    RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR.    The Trustee may make reasonable rules for action by
or a meeting of Securityholders. The Registrar, the Paying Agent and any co-registrar may make reasonable rules for their functions. 


        SECTION
11.08.    LEGAL HOLIDAYS.    A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions
are not required to be open in the State of New York or Minnesota or the city in which the Trustee's office which administers this Indenture is located. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be
affected. 


        SECTION
11.09.    GOVERNING LAW.    THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 


        SECTION
11.10.    NO RECOURSE AGAINST OTHERS.    A director, officer, employee or stockholder, as such, of the Company
or any Subsidiary Guarantor shall not have any liability for any obligations of the Company or such Subsidiary Guarantor under the Securities, the Subsidiary Guarantees or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder shall waive and release all such liability. The waiver and release shall
be part of the consideration for the issue of the Securities. 


        SECTION
11.11.    SUCCESSORS.    All agreements of the Company and each Subsidiary Guarantor in this Indenture and the
Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors. 



        SECTION
11.12.    MULTIPLE ORIGINALS.    The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. 


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        SECTION
11.13.    TABLE OF CONTENTS; HEADINGS.    The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or
provisions hereof. 


        SECTION
11.14.    CONSENT TO JURISDICTION.    (a) The Company irrevocably submits to the jurisdiction of any
United States federal or state court located in the Borough of Manhattan in The City of New York, New York over any suit, action or proceeding arising out of or relating to this Indenture or any
Security. The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may have to the laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. The Company agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding upon the Company and may be
enforced in any courts to the jurisdiction of which the Company is subject by a suit upon such judgment. 



        (b)   Nothing
in this Section shall affect the right of the Trustee or any Holder to serve process in any manner permitted by law or limit the right of the Trustee to bring
proceedings against the Company in the courts of any jurisdiction or jurisdictions. 



64







 

        IN
WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. 



	 	 	FOREST OIL CORPORATION
	

 	
 	

By:	
 	

/s/  DAVID H. KEYTE      

	 	 	 	 	Name:	David H. Keyte
	 	 	 	 	Title:	Executive Vice President and Chief Financial Officer
	

 	
 	

FOREST OIL PERMIAN CORPORATION
	

 	
 	

By:	
 	

/s/  CYRUS D. MARTER IV      

	 	 	 	 	Name:	Cyrus D. Marter IV
	 	 	 	 	Title:	Vice President and Secretary
	

 	
 	

U.S. BANK NATIONAL ASSOCIATION, as Trustee
	

 	
 	

By:	
 	

/s/  KATHY MITCHELL      

	 	 	 	 	Name:	Kathy Mitchell
	 	 	 	 	Title:	Authorized Person




C-1











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Exhibit 4.1


FOREST OIL CORPORATION



Table of Contents

CROSS-REFERENCE TABLE


ARTICLE X SUBSIDIARY GUARANTEES

ARTICLE XI MISCELLANEOUS