Exhibit 4.2


 


Execution version


 




 





 


BERRY PETROLEUM COMPANY, as
Issuer


 


AND


 


WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee


 


 






 


Second Supplemental Indenture


 






 


Dated as of November 1, 2010


 


$300,000,000


 


63⁄4% SENIOR NOTES DUE 2020


 




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE ONE ESTABLISHMENT OF
  SERIES

  	
   

  	
  2

  
	
  SECTION 1.01

  	
  Establishment

  	
   

  	
  2

  
	
  SECTION 1.02

  	
  Book-Entry Provisions

  	
   

  	
  3

  
	
  SECTION 1.03

  	
  Definitive Securities

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TWO DEFINITIONS AND
  OTHER PROVISIONS OF GENERAL APPLICATION

  	
   

  	
  4

  
	
  SECTION 2.01

  	
  Amendments to Definitions

  	
   

  	
  4

  
	
  SECTION 2.02

  	
  Definitions

  	
   

  	
  4

  
	
  SECTION 2.03

  	
  Other Definitions

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE THREE EVENTS OF
  DEFAULT WITH RESPECT TO THE NOTES

  	
   

  	
  38

  
	
  SECTION 3.01

  	
  Original Indenture

  	
   

  	
  38

  
	
  SECTION 3.02

  	
  Events of Default

  	
   

  	
  38

  
	
  SECTION 3.03

  	
  Acceleration

  	
   

  	
  41

  
	
  SECTION 3.04

  	
  Control by Holders

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FOUR CONSOLIDATION,
  MERGER, CONVEYANCE, TRANSFER OR LEASE WITH RESPECT TO THE NOTES

  	
   

  	
  42

  
	
  SECTION 4.01

  	
  Original Indenture

  	
   

  	
  42

  
	
  SECTION 4.02

  	
  Company May Consolidate, Etc., Only on Certain
  Terms

  	
   

  	
  42

  
	
  SECTION 4.03

  	
  Successor Substituted

  	
   

  	
  43

  
	
  SECTION 4.04

  	
  Subsidiary Guarantors May Consolidate, Etc., Only
  on Certain Terms

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FIVE SUPPLEMENTAL
  INDENTURES WITH RESPECT TO THE NOTES

  	
   

  	
  44

  
	
  SECTION 5.01

  	
  Original Indenture

  	
   

  	
  44

  
	
  SECTION 5.02

  	
  Supplemental Indentures Without Consent of Holders

  	
   

  	
  44

  
	
  SECTION 5.03

  	
  Supplemental Indentures With Consent of Holders

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SIX COVENANTS WITH
  RESPECT TO THE NOTES

  	
   

  	
  46

  
	
  SECTION 6.01

  	
  Original Indenture

  	
   

  	
  46

  
	
  SECTION 6.02

  	
  Payment of Principal, Premium and Interest

  	
   

  	
  47

  
	
  SECTION 6.03

  	
  Existence

  	
   

  	
  47

  
	
  SECTION 6.04

  	
  Statement by Officers as to Default

  	
   

  	
  47

  
	
  SECTION 6.05

  	
  Effectiveness of Covenants

  	
   

  	
  47

  
	
  SECTION 6.06

  	
  Limitation on Indebtedness

  	
   

  	
  49

  
	
  SECTION 6.07

  	
  Limitation on Lines of Business

  	
   

  	
  53

  
	
  SECTION 6.08

  	
  Limitation on Restricted Payments

  	
   

  	
  53

  
	
  SECTION 6.09

  	
  Limitation on Liens

  	
   

  	
  59

  



 


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  SECTION 6.10

  	
  Limitation on Restrictions on Distributions from Restricted
  Subsidiaries

  	
   

  	
  59

  
	
  SECTION 6.11

  	
  Limitation on Sales of Assets and Subsidiary Stock

  	
   

  	
  62

  
	
  SECTION 6.12

  	
  Limitation on Affiliate Transactions

  	
   

  	
  65

  
	
  SECTION 6.13

  	
  Limitation on Sale of Capital Stock of Restricted
  Subsidiaries

  	
   

  	
  66

  
	
  SECTION 6.14

  	
  Change of Control

  	
   

  	
  67

  
	
  SECTION 6.15

  	
  Commission Reports

  	
   

  	
  68

  
	
  SECTION 6.16

  	
  Future Subsidiary Guarantors

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN REDEMPTION OF
  NOTES

  	
   

  	
  69

  
	
  SECTION 7.01

  	
  Original Indenture

  	
   

  	
  69

  
	
  SECTION 7.02

  	
  Selection by Trustee of Notes to Be Redeemed

  	
   

  	
  69

  
	
  SECTION 7.03

  	
  Notes Payable on Redemption Date

  	
   

  	
  70

  
	
  SECTION 7.04

  	
  Other Mandatory Redemption

  	
   

  	
  70

  
	
  SECTION 7.05

  	
  Optional Redemption

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT DEFEASANCE AND
  COVENANT DEFEASANCE WITH RESPECT TO THE NOTES

  	
   

  	
  71

  
	
  SECTION 8.01

  	
  Original Indenture

  	
   

  	
  71

  
	
  SECTION 8.02

  	
  Discharge of Liability on Notes; Defeasance

  	
   

  	
  72

  
	
  SECTION 8.03

  	
  Conditions to Defeasance

  	
   

  	
  73

  
	
  SECTION 8.04

  	
  Application of Trust Money

  	
   

  	
  74

  
	
  SECTION 8.05

  	
  Repayment to Company

  	
   

  	
  74

  
	
  SECTION 8.06

  	
  Indemnity for U.S. Government Obligations

  	
   

  	
  74

  
	
  SECTION 8.07

  	
  Reinstatement

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE NINE SUBSIDIARY
  GUARANTEE

  	
   

  	
  75

  
	
  SECTION 9.01

  	
  Subsidiary Guarantee

  	
   

  	
  75

  
	
  SECTION 9.02

  	
  Termination, Release and Discharge

  	
   

  	
  76

  
	
  SECTION 9.03

  	
  Limitation of Subsidiary Guarantors’ Liability

  	
   

  	
  77

  
	
  SECTION 9.04

  	
  Contribution

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TEN MISCELLANEOUS
  PROVISIONS WITH RESPECT TO THE NOTES

  	
   

  	
  78

  
	
  SECTION 10.01

  	
  Effect of Headings and Table of Contents

  	
   

  	
  78

  
	
  SECTION 10.02

  	
  Successors and Assigns

  	
   

  	
  78

  
	
  SECTION 10.03

  	
  Separability Clause

  	
   

  	
  78

  
	
  SECTION 10.04

  	
  Governing Law

  	
   

  	
  78

  
	
  SECTION 10.05

  	
  No Adverse Interpretation of Other Agreements

  	
   

  	
  78

  
	
  SECTION 10.06

  	
  Counterparts

  	
   

  	
  78

  
	
  SECTION 10.07

  	
  Notices

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  —
  Form of Note

  	
   

  	
   

  
	
  Exhibit B

  	
  —
  Form of Supplemental Indenture for Future Subsidiary Guarantees

  	
   

  	
   

  
	
  Schedule 1

  	
  — Existing Affiliate
  Transactions

  	
   

  	
   

  
					



 


ii

















 


This
SECOND SUPPLEMENTAL INDENTURE, dated as of November 1, 2010 between Berry
Petroleum Company, a corporation duly organized and existing under the laws of
the State of Delaware (herein called the “Company”),
having its principal office at 1999 Broadway, Suite 3700, Denver, Colorado
80202, and Wells Fargo Bank, National Association, a national banking
association duly organized and existing under the laws of the United States of
America, as trustee (herein called the “Trustee”).


 


Recitals of the Company


 


WHEREAS,
the Company and the Trustee executed and delivered an Indenture, dated as of June 15,
2006 (the “Original Indenture”), to
provide for the issuance by the Company from time to time of its debentures,
notes or other evidences of indebtedness (as defined therein, “Securities”), which may be issued in
one or more series as provided in the Original Indenture;


 


WHEREAS,
the Original Indenture is incorporated herein by this reference, and the
Original Indenture, as supplemented by this Second Supplemental Indenture and
any other supplemental indentures applicable to the Securities created pursuant
to this Second Supplemental Indenture, is herein called the “Indenture”;


 


WHEREAS,
under the Original Indenture, a new series of Securities may at any time be
established in or pursuant to a Board Resolution, an Officer’s Certificate or
one or more indentures supplemental to the Original Indenture;


 


WHEREAS,
the Company proposes to create under the Indenture a new series of Securities
designated as 63⁄4% Senior Notes due 2020 and to add new provisions to, and
change and eliminate certain existing provisions of, the Original Indenture in
respect of (i) such new series of Securities and (ii) as and to the
extent specified herein, any additional series of Securities of other series
hereafter established and issued pursuant to the Indenture as at the time
supplemented and modified;


 


WHEREAS,
additional Securities of other series hereafter established, except as may be
limited in the Original Indenture as at the time supplemented and modified, may
be issued from time to time pursuant to the Indenture as at the time
supplemented and modified;


 


WHEREAS,
pursuant to the First Supplemental Indenture dated May 27, 2009 to the
Original Indenture, there has been established as a series of Securities under
the Original Indenture the Company’s 101⁄4% Senior Notes due 2014, it being
understood that such First Supplemental Indenture shall not be deemed to be
applicable to the Securities created pursuant to this Second Supplemental
Indenture; and


 


WHEREAS,
all conditions necessary to authorize the execution and delivery of this Second
Supplemental Indenture and make it a valid and binding obligation of the
Company in accordance with its terms, have been done or performed.


 


NOW,
THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:


 


1

















 


For
and in consideration of the premises set forth herein and for other good and
valuable consideration the sufficiency of which is hereby acknowledged, it is
mutually agreed as follows:


 


ARTICLE ONE

ESTABLISHMENT OF SERIES


 


SECTION 1.01              Establishment.


 


There
is hereby established a new series of Securities to be issued under the
Indenture, to be designated as the Company’s 63⁄4% Senior Notes due 2020 (the “Notes”).  This Second Supplemental Indenture shall be
deemed to satisfy all requirements of Section 301 of the Original
Indenture necessary for establishment of the Notes as a series of Securities
under the Indenture notwithstanding anything to the contrary therein.


 


There
are to be authenticated and delivered Notes, initially limited in aggregate
principal amount of $300,000,000 and no further Notes shall be authenticated
and delivered except as provided by the terms of the Original Indenture and the
terms of this Second Supplemental Indenture; provided,
however, that additional Notes having identical terms and conditions
as the Notes other than issue date, the issue price, the date from which
interest thereon shall accrue, legends, if any, to be included thereon and the
first Interest Payment Date (the “Additional Notes”)
may be issued from time to time in the future, without the consent of the
Holders of the Notes, in accordance with the provisions of the Indenture. With
respect to any Additional Notes, the Company shall set forth in a resolution of
the Board of Directors or an Officers’ Certificate, the following information:


 


(a)           the
aggregate principal amount of such Additional Notes to be authenticated and
delivered pursuant to the Indenture;


 


(b)           the
issue date, the issue price, the first Interest Payment Date of such Additional
Notes, the date from which interest shall accrue and legends, if any, to be
included thereon; and


 


(c)           the
CUSIP and ISIN numbers of the Additional Notes.


 


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


 


The
Notes shall be issued in fully registered form without coupons, and only in
denominations of $2,000 and larger integral multiples of $1,000. The Notes
shall be issued in the form of one or more Global Securities in substantially
the form set out in Exhibit A hereto. The initial Depositary with
respect to the Notes shall be DTC. Payments in respect of Notes represented by
a Global Security (including principal, premium and interest) shall be made by
wire transfer of immediately available funds to the accounts specified by DTC.


 


2

















 


Each
Note shall be dated the date of authentication thereof and shall bear interest
from the date of original issuance thereof or from the most recent Interest
Payment Date to which interest has been paid or duly provided for.


 


The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage or DTC rule or usage in addition to those set
forth on Exhibit A. The Company and the Trustee shall approve the
forms of the Notes and any notation, endorsement or legend on them, such
approval to be evidenced by the execution or authentication, respectively, and
delivery of the Notes by the Company or the Trustee, respectively. The terms of
the Notes set forth in Exhibit A are part of the terms of the Indenture
and, to the extent applicable, the Company and the Trustee, by their execution
and delivery of this Second Supplemental Indenture, expressly agree to be bound
by such terms.


 


SECTION 1.02              Book-Entry Provisions.


 


This
Section 1.02 shall apply only to Global Securities deposited with
the Trustee, as custodian for DTC.


 


Each
Global Security initially shall (x) be registered in the name of DTC for
such Global Security or the nominee of DTC, (y) be delivered to the
Trustee as custodian for DTC and (z) bear legends as set forth in Section 202
of the Original Indenture.


 


Members
of, or participants in, DTC (“Agent Members”)
shall have no rights under the 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, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company 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.


 


In
connection with any transfer of a portion of the beneficial interest in a
Global Security pursuant to Section 1.03 of this Second Supplemental
Indenture 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.


 


In
connection with the transfer of an entire Global Security to beneficial owners
pursuant to Section 1.03 of this Second Supplemental Indenture,
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.


 


3

















 


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 the Indenture or the Notes.


 


SECTION 1.03              Definitive Securities.


 


Except
as provided below, owners of beneficial interests in Global Securities shall
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 or (c) an Event of Default
has occurred and is continuing and the Registrar has received a request from
DTC.


 


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.


 


ARTICLE TWO

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION


 


SECTION 2.01              Amendments to Definitions.


 


Each
capitalized term used but not defined in this Second Supplemental Indenture
shall have the meaning given to it in the Original Indenture, except that with
respect to the Notes, the terms defined in this Supplemental Indenture shall
have the meanings set forth herein in lieu of the meaning of such term in the
Original Indenture.


 


SECTION 2.02              Definitions.


 


The
following defined terms used herein with respect to the Notes shall, unless the
context otherwise requires, have the meanings specified below (notwithstanding
any other meaning given to such terms in the Original Indenture):


 


“Acquired Indebtedness” means
Indebtedness (1) of a Person or any of its Subsidiaries existing at the
time such Person becomes a Restricted Subsidiary or (2) assumed in
connection with the acquisition of assets from such Person, in each case
whether or not Incurred by such Person in connection with, or in anticipation
or contemplation of, such Person becoming a Restricted Subsidiary or such
acquisition. Acquired Indebtedness shall be deemed to have been Incurred, with
respect to clause (1) of the preceding sentence, on the date
such Person becomes a 


 


4

















 


Restricted
Subsidiary and, with respect to clause (2) of the preceding
sentence, on the date of consummation of such acquisition of assets.


 


“Additional Assets” means:


 


(1)                                  any property, plant,
equipment or other asset (excluding current assets) to be used by the Company
or a Restricted Subsidiary in a Related Business;


 


(2)                                  capital expenditures by the
Company or a Restricted Subsidiary in a Related Business;


 


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


 


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


 


provided,
however, that, in the case of clauses (3) and (4),
such Restricted Subsidiary is primarily engaged in a Related Business.


 


“Additional Interest” means
additional interest at a rate of 0.50% per annum.


 


“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 for the fiscal quarter ending prior to the date of determination),


 


and
decreased by, as of the date of determination, the estimated discounted future
net revenues from


 


5

















 


(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 on a pre-tax basis and substantially in accordance with
Commission guidelines (utilizing the prices for the fiscal quarter ending prior
to the date of determination), in each case as estimated by the Company’s
petroleum engineers or any independent petroleum engineers engaged by the
Company for that purpose;


 


(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 of other tangible
assets of the Company and its Restricted Subsidiaries, as of a date no earlier
than the date of the Company’s latest annual or quarterly financial statements,
and


 


(B)           the appraised value, as estimated by
independent appraisers, of other tangible assets of the Company and its
Restricted Subsidiaries, as of a 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


 


6

















 


(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 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 successful efforts method
of accounting to the full cost or a similar method, “Adjusted
Consolidated Net Tangible Assets” will continue to be calculated as
if the Company were still using the successful efforts method of accounting.


 


“Adjusted Net Assets” of a Subsidiary
Guarantor at any date means the amount by which the fair value of the
properties of such Subsidiary Guarantor exceeds the total amount of
liabilities, including contingent liabilities (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date), but
excluding liabilities under its Subsidiary Guarantee, of such Subsidiary
Guarantor at such date.


 


“Affiliate” of any specified Person
means any other Person, directly or indirectly, controlling or controlled by or
under direct or indirect common control with such specified Person. For the
purposes of this definition, “control” when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing; provided that
exclusively for purposes of Section 6.12 of this Second
Supplemental Indenture, beneficial ownership of 10% or more of the Voting Stock
of a Person shall be deemed to be control.


 


“Applicable Premium” means, with
respect to a Note on any date of redemption, the greater of (1) 1.0% of
the principal amount of such Note and (2) the excess of (a) the
present value at such time of the Redemption Price of such Note as of November 1,
2015 (as set forth in Section 7.05(b) of this Second Supplemental
Indenture) plus all remaining scheduled payments of interest on such Note to November 1,
2015 (but excluding accrued and unpaid interest to the redemption date),
computed using a discount rate equal to the Treasury Rate plus 50 basis points,
over (b) the then-outstanding principal amount of such Note.


 


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


 


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


 


7






 












 


(1)                                  a disposition of assets by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary;


 


(2)                                  a disposition of Cash
Equivalents in the ordinary course of business;


 


(3)                                  a disposition of
Hydrocarbons or Related Assets in the ordinary course of business;


 


(4)                                  a disposition of obsolete or
worn out equipment or equipment that is no longer useful in the conduct of the
business of the Company and its Restricted Subsidiaries and that is disposed of
in each case in the ordinary course of business;


 


(5)                                  transactions subject to and
permitted under Article Four of this Second Supplemental Indenture;


 


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


 


(7)                                  for purposes of Section 6.11
of this Second Supplemental Indenture only, the making of a Permitted
Investment (but, in the case of an Investment in which the Company or a
Restricted Subsidiary receives consideration for such transaction including
cash or Cash Equivalents, such transaction shall be deemed to also include an
Asset Disposition having a fair market value equal to the aggregate amount of
cash and Cash Equivalents so received) or a disposition subject to and in
compliance with Section 6.08 of this Second Supplemental Indenture;


 


(8)                                  an Asset Swap effected in
compliance with Section 6.11 of this Second Supplemental Indenture;


 


(9)                                  dispositions of assets with
an aggregate fair market value since the Issue Date of less than $5.0 million;


 


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


 


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


 


(12)                            the issuance by a Restricted
Subsidiary of Preferred Stock that is permitted by Section 6.06 of
this Second Supplemental Indenture;


 


(13)                            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;


 


8

















 


(14)                            foreclosure on assets;


 


(15)                            any Production Payments and
Reserve Sales that are customary in the Oil and Gas Business;


 


(16)                            a disposition of Permitted
Investments of the type described in clause (7) of the
definition thereof;


 


(17)                            a disposition of Oil and Gas
Properties in connection with tax credit transactions complying with Section 29
or any successor or analogous provisions of the Code;


 


(18)                            surrender or waiver of
contract rights or the settlement, release or surrender of contract, tort or
other claims of any kind;


 


(19)                            for purposes of clause (2) of
Section 6.11(a) of this Second Supplemental Indenture only,
dispositions of equipment in the form of Capitalized Lease Obligations or
mortgage or purchase money financing in an aggregate principal amount not to
exceed $25.0 million at any time outstanding; provided
that any proceeds received in connection with any such transaction must be
applied in accordance with Section 6.11 of this Second Supplemental
Indenture; and


 


(20)                            Sale/Leaseback Transactions
relating to assets acquired after the Issue Date; provided
that each such Sale/Leaseback Transaction is consummated within 180 days after
the date of the acquisition of such asset by the Company or such Restricted
Subsidiary (each, a “Qualifying SLB”).


 


“Asset Swap” means a concurrent
purchase and sale or exchange of Oil and Gas Properties between the Company or
any of its Restricted Subsidiaries and another Person; provided
that any cash received must be applied in accordance with Section 6.11
of this Second Supplemental Indenture.


 


“Attributable Indebtedness” in
respect of a Sale/Leaseback Transaction means, as at the time of determination,
the present value (discounted at the interest rate implicit in the transaction)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended), determined in accordance with
GAAP; provided, however, that if such
Sale/Leaseback Transaction results in a Capitalized Lease Obligation, the
amount of Indebtedness represented thereby shall be determined in accordance
with the definition of “Capitalized Lease
Obligations”, and provided, further,
obligations relating to Qualifying SLBs shall be deemed not to be Attributable
Indebtedness.


 


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


 


9

















 


“Board of Directors” means, as to any
Person, the board of directors of such Person or any duly authorized committee
thereof.


 


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


 


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


 


“Capitalized Lease Obligations” means
an obligation that is required to be classified and accounted for as a
capitalized lease for financial reporting purposes in accordance with GAAP, and
the amount of Indebtedness represented by such obligation shall be the
capitalized amount of such obligation at the time any determination thereof is
to be made as determined in accordance with GAAP, and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date such lease may be terminated without
penalty.


 


“Cash Equivalents” means:


 


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


 


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


 


(3)                                  certificates of deposit,
time deposits, eurodollar time deposits, overnight bank deposits or bankers’
acceptances having maturities of not more than one year from the date of
acquisition thereof issued by any commercial bank the long-term debt of which
is rated at the time of acquisition thereof at least “A” or the equivalent
thereof by Standard & Poor’s Ratings Group, Inc., or “A” or the
equivalent thereof by Moody’s Investors Service, Inc., and having combined
capital and surplus in excess of $500 million;


 


(4)                                  repurchase obligations with
a term of not more than 30 days for underlying securities of the types
described in clauses (1), (2) and (3) entered
into with any bank meeting the qualifications specified in clause (3) above;


 


(5)                                  commercial paper rated at
the time of acquisition thereof at least “A-2” or the equivalent thereof by
Standard & Poor’s Ratings Group, Inc. or “P-2” or the 


 


10

















 


equivalent
thereof by Moody’s Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named
rating agencies cease publishing ratings of investments, and in any case maturing
within one year after the date of acquisition thereof; and


 


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


 


“Change of Control” means:


 


(1)                                  any “person”
or “group” of related persons (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other than
one or more Permitted Holders, becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that such person or group shall be
deemed to have “beneficial ownership” of all
shares that any such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly
or indirectly, of more than 35% of the total voting power of the Voting Stock
of the Company (or its successor by merger, consolidation or purchase of all or
substantially all of its assets) (for the purposes of this clause, such person
or group shall be deemed to beneficially own any Voting Stock of the Company
held by a parent entity, if such person or group “beneficially
owns” (as defined above), directly or indirectly, more than 35% of
the voting power of the Voting Stock of such parent entity); or


 


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


 


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


 


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


 


“Change of Control Offer” shall have
the meaning set forth in Section 6.14 of this Second Supplemental
Indenture.


 


“Change of Control Payment Date”
shall have the meaning set forth in Section 6.14 of this Second
Supplemental Indenture.


 


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


 


“Commodity Agreement” means any
commodity futures contract, commodity swap, commodity option or other similar
agreement or arrangement, including options, swaps, floors, caps, collars,
futures, forward sales or forward purchases involving commodities (including


 


11

















 


Hydrocarbons
and Related Assets), commodity-related revenues or costs (including basis),
equities, bonds, or indexes based on any of the foregoing and any other
derivative agreement or arrangement based on any of the foregoing.


 


“Common Stock” means with respect to
any Person, any and all shares, interest or other participations in, and other
equivalents (however designated and whether voting or nonvoting) of such Person’s
common stock whether or not outstanding on the Issue Date, and includes,
without limitation, all series and classes of such common stock.


 


“Consolidated Cash Flow” for any
period means, without duplication, the Consolidated Net Income for such period,
plus the following to the extent deducted in calculating such Consolidated Net
Income:


 


(1)                                  Consolidated Interest
Expense; plus


 


(2)                                  Consolidated Income Taxes;
plus


 


(3)                                  consolidated depletion and
depreciation expense; plus


 


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


 


(5)                                  other non-cash charges
reducing Consolidated Net Income (excluding any such non-cash charge to the
extent it represents an accrual of or reserve for cash charges in any future
period or amortization of a prepaid cash expense that was paid in a prior
period not included in the calculation); plus


 


(6)                                  consolidated exploration
expense;


 


minus the sum of:


 


(A)                              non-cash items increasing
Consolidated Net Income of such Person for such period (excluding any items
which represent the reversal of any accrual of, or reserve for, anticipated
cash charges made in any prior period); and


 


(B)                                to the extent included in
calculating such Consolidated Net Income and in excess of any costs or expenses
attributable thereto that were deducted in calculating such Consolidated Net
Income, the sum of (x) the amount of deferred revenues that are amortized
during such period and are attributable to reserves that are subject to
Volumetric Production Payments, and (y) amounts recorded in accordance
with GAAP as repayments of principal and interest pursuant to
Dollar-Denominated Production Payments.


 


12

















 


Notwithstanding
the preceding sentence, clauses (2) through (6) relating
to amounts of a Restricted Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of such Person only
to the extent (and in the same proportion) that the net income (loss) of such
Restricted Subsidiary was included in calculating the Consolidated Net Income
of such Person and, to the extent the amounts set forth in clauses (2) through
(6) are in excess of those necessary to offset a net loss of such
Restricted Subsidiary or if such Restricted Subsidiary has net income for such
period included in Consolidated Net Income, only if a corresponding amount
would be permitted at the date of determination to be dividended to the Company
by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.


 


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


 


(1)                                  if the Company or any
Restricted Subsidiary:


 


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


 


(b)                                 has repaid, repurchased,
defeased or otherwise discharged any Indebtedness since the beginning of the
period that is no longer outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio involves a discharge of Indebtedness (in each case, other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and the related commitment
terminated), Consolidated Cash Flow and Consolidated Interest Expense for such
period shall be 


 


13

















 


calculated
after giving effect on a pro forma basis to such discharge of such
Indebtedness, including with the proceeds of such new Indebtedness, as if such
discharge had occurred on the first day of such period;


 


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


 


(a)                                  the Consolidated Cash Flow
for such period shall be reduced by an amount equal to the Consolidated Cash
Flow (if positive) directly attributable to the assets which are the subject of
such disposition for such period or increased by an amount equal to the
Consolidated Cash Flow (if negative) directly attributable thereto for such
period; and


 


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


 


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


 


(4)                                  if since the beginning of
such period any Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary since the
beginning of such period) shall have Incurred any Indebtedness or discharged
any Indebtedness, made any disposition or any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (1),
(2) or (3) above if made by the Company or a Restricted
Subsidiary during such period, Consolidated Cash Flow and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto 


 


14

















 


as
if such Person had been a Restricted Subsidiary on the first day of such period
and such transaction or transactions had occurred on the first day of such
period.


 


For
purposes of this definition, whenever pro forma effect is to be given to any
calculation under this definition, the pro forma calculations shall be
determined in good faith by a responsible financial or accounting officer of
the Company (including pro forma expense and cost reductions calculated on a
basis consistent with Regulation S-X under the Securities Act). If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for
the entire period (taking into account any Interest Rate Agreement applicable
to such Indebtedness to the extent of the remaining term thereof). If any
Indebtedness that is being given pro forma effect bears an interest rate at the
option of the Company, the interest rate shall be calculated by applying such
optional rate chosen by the Company.


 


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


 


“Consolidated Interest Expense”
means, for any period, the total interest expense of the Company and its
consolidated Restricted Subsidiaries, whether paid or accrued, plus, to the
extent not included in such interest expense and without duplication:


 


(1)                                  interest expense
attributable to Capitalized Lease Obligations and the interest portion of rent
expense associated with Attributable Indebtedness in respect of the relevant
lease giving rise thereto, determined as if such lease were a capitalized lease
in accordance with GAAP and the interest component of any deferred payment
obligations;


 


(2)                                  amortization of debt
discount; provided, however, that any amortization
of bond premium shall be credited to reduce Consolidated Interest Expense
unless, pursuant to GAAP, such amortization of bond premium has otherwise
reduced Consolidated Interest Expense;


 


(3)                                  non-cash interest expense;


 


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


 


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


 


15

















 


(6)                                  costs associated with
Hedging Obligations (including amortization of fees) provided,
however, that if Hedging Obligations result in net benefits rather
than costs, such benefits shall be credited to reduce Consolidated Interest
Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in
Consolidated Net Income;


 


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


 


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


 


(9)                                  Receivables Fees; and


 


(10)                            the cash contributions to
any employee stock ownership plan or similar trust to the extent such
contributions are used by such plan or trust to pay interest or fees to any
Person (other than the Company and its Restricted Subsidiaries) in connection
with Indebtedness Incurred by such plan or trust.


 


minus, to the extent
included above, the sum of amortization of debt issuance costs and interest
income.


 


For
the purpose of calculating the Consolidated Coverage Ratio, the calculation of
Consolidated Interest Expense shall include all interest expense (including any
amounts described in clauses (1) through (10) above)
relating to any Indebtedness of the Company or any Restricted Subsidiary
described in the penultimate paragraph of the definition of “Indebtedness”.


 


For
purposes of the foregoing, total interest expense shall be determined (i) after
giving effect to any net payments made or received by the Company and its
Subsidiaries with respect to Interest Rate Agreements and (ii) exclusive
of amounts classified as other comprehensive income in the balance sheet of the
Company. Notwithstanding anything to the contrary contained herein, commissions,
discounts, yield and other fees and charges Incurred in connection with any
transaction pursuant to which the Company or its Restricted Subsidiaries may
sell, convey or otherwise transfer or grant a security interest in any accounts
receivable or related assets shall be included in Consolidated Interest
Expense.


 


“Consolidated Net Income” means, for
any period, the net income (loss) of the Company and its consolidated
Restricted Subsidiaries determined in accordance with GAAP; provided, however, that there shall not be included in such
Consolidated Net Income:


 


(1)                                  any net income (or loss) of
any Person if such Person is not a Restricted Subsidiary, except that:


 


16

















 


(a)                                  subject to the limitations contained
in clauses (3), (4) and (5) below, the
Company’s equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend, distribution or other payment (subject, in
the case of a dividend, distribution or other payment to a Restricted
Subsidiary, to the limitations contained in clause (2) below);
and


 


(b)                                 the Company’s equity in a
net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income to the
extent such loss has been funded with cash from the Company or a Restricted
Subsidiary;


 


(2)                                  any net income (but not
loss) of any Restricted Subsidiary if such Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that:


 


(a)                                  subject to the limitations
contained in clauses (3), (4) and (5) below,
the Company’s equity in the net income of any such Restricted Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary
as a dividend, distribution or other payment (subject, in the case of a
dividend to another Restricted Subsidiary, to the limitation contained in this
clause); and


 


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


 


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


 


(4)                                  any after-tax extraordinary
gain or loss;


 


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


 


(6)                                  any asset impairment or
writedown on or related to Oil and Gas Properties under GAAP or Commission
guidelines;


 


17






 












 


(7)                                  any unrealized non-cash
gains or losses or charges in respect of Hedging Obligations (including those
resulting from the application of Statement of Financial Accounting Standards No. 133
or similar provisions);


 


(8)                                  any after-tax gain or loss
realized on the termination of any employee pension benefit plan;


 


(9)                                  non-cash charges relating to
grants of performance shares, stock options, stock awards, stock purchase
agreements or management compensation plans for officers, directors, employees
or consultants of the Company or a Restricted Subsidiary (excluding any such
non-cash charge to the extent that it represents an accrual of or reserve for
cash charges in any future period or amortization of a prepaid cash expense
that was paid in a prior period) to the extent that such non-cash charges are
deducted in computing such Consolidated Net Income; provided
that if the Company or any Restricted Subsidiary of the Company makes a cash
payment in respect of a non-cash charge in any period, such cash payment shall
(without duplication) be deducted from the Consolidated Net Income of the
Company for such period;


 


(10)                            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;
and


 


(11)                            costs incurred in connection
with acquisitions that were eligible for capitalization treatment under GAAP
but instead were expensed at the time of incurrence, provided
that any such costs shall instead reduce Consolidated Net Income for any period
to the extent of any amortization in such period that would have occurred had
they had been capitalized).


 


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


 


“covenant defeasance” shall have the
meaning set forth in Section 8.02(a) of this Second
Supplemental Indenture.


 


“Credit Facilities” means, with
respect to the Company or any Subsidiary Guarantor, one or more debt facilities
(including, without limitation, the Senior Credit Facility, and the uncommitted
money market line of credit facility, dated November 3, 2005 between the
Company and Societe Generale, as amended), or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans, receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time (and whether or not with the original administrative
agent and lenders or another 


 


18

















 


administrative
agent or agents or other lenders and whether provided under the original Senior
Credit Facility or any other credit or other agreement or indenture).


 


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


 


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


 


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


 


“Definitive Security” means a
certificated Note registered in the name of the Holder thereof and issued in
accordance with Section 1.03 of this Second Supplemental Indenture,
in the form of Exhibit A hereto except that such Note shall not
bear the Global Security legend set forth therein.


 


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


 


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


 


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


 


(3)                                  is redeemable at the option
of the holder of the Capital Stock in whole or in part,


 


in
each case on or prior to the date that is 91 days after the earlier of the date
(a) of the Stated Maturity of the Notes or (b) on which there are no
Notes outstanding, provided that
only the portion of Capital Stock which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
Holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further that any Capital Stock that would
constitute Disqualified Stock solely because the Holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of
a change of control or asset sale (each defined in a substantially identical
manner to the corresponding definitions in the Indenture) shall not constitute
Disqualified Stock if the terms of such Capital Stock (and all such securities
into which it is convertible or for which it is ratable or exchangeable)
provide that the Company may not repurchase or redeem any such Capital Stock
(and all such securities into which it is convertible or for which it is
ratable or exchangeable) pursuant to such provision prior to compliance by the
Company with the provisions of Sections 6.14 and 6.11 of
this Second Supplemental Indenture and such repurchase or redemption complies
with Section 6.08 of this Second Supplemental Indenture.


 


19

















 


“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 Subsidiary” means any
Restricted Subsidiary that is organized under the laws of the United States of
America or 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 hereinafter appointed by the Company.


 


“Equity Offering” means a public or
private offering, other than to a Subsidiary of the Company, for cash by the
Company of its Capital Stock (other than Disqualified Stock).


 


“Event of Default” shall have the
meaning set forth in Section 3.02 of this Second Supplemental
Indenture.


 


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


 


“Foreign Required Minority Shares”
means directors’ qualifying shares and other shares of Capital Stock of a
Foreign Subsidiary that are required by the applicable laws and regulations of
such foreign jurisdiction to be owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction
in order for such Foreign Subsidiary to transact business in such foreign
jurisdiction.


 


“Foreign Subsidiary” means any
Restricted Subsidiary that is not organized under the laws of the United States
of America or any state thereof or the District of Columbia and any Subsidiary
of such Restricted Subsidiary.


 


“GAAP” means generally accepted
accounting principles in the United States of America as in effect as of the
Issue Date, including those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession. All ratios and computations
based on GAAP contained in the Indenture shall be computed in conformity with
GAAP, except that in the event the Company is acquired in a transaction that is
accounted for using purchase accounting, the effects of the application of
purchase accounting shall be disregarded in the calculation of such ratios and other
computations contained in the Indenture.


 


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


 


(1)                                  to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities 


 


20

















 


or
services, to take-or-pay, or to maintain financial statement conditions or
otherwise); or


 


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


 


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


 


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


 


“Hydrocarbons” means oil, natural
gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons and all constituents, elements or
compounds thereof and products refined or processed therefrom.


 


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


 


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


 


(1)                                  the principal of and premium
(if any) in respect of indebtedness of such Person for borrowed money;


 


(2)                                  the principal of and premium
(if any) in respect of obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;


 


(3)                                  the principal component of
all obligations of such Person in respect of letters of credit, bankers’
acceptances or other similar instruments (including reimbursement obligations
with respect thereto except to the extent such reimbursement obligation relates
to a trade payable and such obligation is satisfied within 30 days of
Incurrence);


 


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


 


21

















 


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


 


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


 


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


 


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


 


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


 


(10)                            to the extent not otherwise
included in this definition, the amount of obligations outstanding under the
legal documents entered into as part of a securitization transaction or series
of securitization transactions that would be characterized as principal if such
transaction were structured as a secured lending transaction rather than as a purchase
outstanding relating to a securitization transaction or series of
securitization transactions.


 


Notwithstanding
the preceding, Indebtedness shall not include Volumetric Production
Payments. 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, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
Notwithstanding the foregoing, money borrowed and set aside at the time of the
Incurrence of any Indebtedness in order to pre-fund the payment of interest on
such Indebtedness shall not be deemed to be “Indebtedness,”
provided that such money is held to
secure the payment of such interest.


 


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


 


(1)                                  such Indebtedness is the
obligation of a partnership, limited liability company or similar entity that
is not a Restricted Subsidiary (a “Joint Venture”);


 


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


 


22

















 


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


 


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


 


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


 


No
Indebtedness will be deemed to be subordinate in right of payment to any other
Indebtedness solely by virtue of being unsecured, being secured by junior liens
or having a later maturity date.


 


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


 


“Investment” means, with respect to
any Person, all investments by such Person in other Persons (including
Affiliates) in the form of any direct or indirect advance, loan or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or
other similar instruments issued by, such Person and all other items that are
or would be classified as investments on a balance sheet prepared in accordance
with GAAP.


 


For
purposes of Section 6.08 of this Second Supplemental Indenture:


 


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


 


23

















 


(2)                                  any property transferred to
or from an Unrestricted Subsidiary shall be valued at its fair market value at
the time of such transfer, in each case as determined in good faith by the
Board of Directors of the Company.


 


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


 


“Issue Date” means November 1,
2010.


 


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


 


“Minority Interest” means the
percentage interest represented by any shares of stock of any class of Capital
Stock of a Restricted Subsidiary that are not owned by the Company or a
Restricted Subsidiary.


 


“Net Available Cash” from an Asset
Disposition means cash payments received (including any cash payments received
by way of deferred payment of principal pursuant to a note or installment
receivable or otherwise and net proceeds from the sale or other disposition of
any securities received as consideration, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring Person of Indebtedness or other obligations relating to the
properties or assets that are the subject of such Asset Disposition or received
in any other non-cash form) therefrom, in each case net of:


 


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


 


(2)                                  all payments made on any
Indebtedness which is secured by any assets subject to such Asset Disposition,
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 Disposition, or,
by applicable law, be repaid out of the proceeds from such Asset Disposition;


 


(3)                                  all distributions and other
payments required to be made to minority interest Holders in Subsidiaries or
Joint Ventures or to holders of royalty or similar interests as a result of
such Asset Disposition; and


 


(4)                                  the deduction of appropriate
amounts to be provided by the seller as reserves, in accordance with GAAP, (A) for
adjustment in respect of the sale price of the assets that were the subject of
such Asset Disposition and (B) against any liabilities associated with the
assets disposed of in such Asset Disposition and 


 


24

















 


retained
by the Company or any Restricted Subsidiary after such Asset Disposition.


 


“Net Cash Proceeds,” with respect to
any issuance or sale of Capital Stock, means the cash proceeds of such issuance
or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement
agents’ fees, listing fees, discounts or commissions and brokerage, consultant
and other fees and charges actually Incurred in connection with such issuance
or sale and net of taxes paid or payable as a result of such issuance or sale
(after taking into account any available tax credit or deductions and any tax
sharing arrangements).


 


“Net Working Capital” means (a) all
current assets of the Company and its Restricted Subsidiaries except current
assets constituting non-cash gains on Hedging Obligations resulting from the
requirements of Statement of Financial Accounting Standards No. 133 and
similar provisions, less (b) all current liabilities of the Company and
its Restricted Subsidiaries, except current liabilities included in
Indebtedness and any current liabilities constituting any non-cash losses or
charges on Hedging Obligations resulting from the requirements of Statement of
Financial Accounting Standards No. 133 and similar provisions, in each
case as set forth in the consolidated financial statements of the Company prepared
in accordance with GAAP.


 


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


 


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


 


(1)                                  as to which neither the
Company nor any Restricted Subsidiary (a) provides any Guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise); and


 


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


 


“Officer” means the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Financial Officer,
any Vice President, the Treasurer or the Secretary of the Company. Officer of
any Subsidiary Guarantor has a correlative meaning.


 


“Officers’ Certificate” means a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company.


 


“Oil and Gas Business” means (a) the
business of acquiring, exploring, exploiting, developing, producing, operating
and disposing of interests in Hydrocarbons and Oil and Gas Properties, (b) the
business of gathering, marketing, distributing, treating, processing, storing,
refining, selling and transporting of Hydrocarbons and Oil and Gas Properties
and products produced in association therewith, (c) other energy-related
business, including the ownership and 


 


25

















 


operation
of co-generation facilities and steam and electrical transmission businesses, (d) any
business relating to oil field sales and services including ownership and
operation of drilling rigs, and (e) any business or activity relating to,
arising from, or necessary, appropriate or incidental to, the activities
described in the foregoing clauses of this definition.


 


“Oil and Gas Properties” means all
properties, including equity or other ownership interests therein, owned by
such Person which contain or are believed to contain oil and gas reserves.


 


“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 or the Trustee.


 


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


 


“Permitted Business Investment” means
any Investment made in the ordinary course of, and of a nature that is or shall
have become customary in, the Oil and Gas Business or any other Related
Business including investments or expenditures for actively exploiting,
exploring for, acquiring, developing, producing, operating, disposing of
interests in, processing, gathering, marketing, distributing, treating,
storing, refining, selling or transporting Hydrocarbons, Related Assets and Oil
and Gas Properties 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 such businesses jointly with third parties, including:


 


(1)                                  ownership interests in Oil
and Gas Properties, co-generation facilities, refineries, liquid natural gas
facilities, processing facilities, gathering systems, pipelines or ancillary
real property interests, either directly or through entities the primary
business of which is to own or operate any of the foregoing; and


 


(2)                                  entry into and Investments
in the form of or pursuant to, operating agreements, working interests, royalty
interests, mineral leases, processing agreements, farm-in agreements, farm-out
agreements, contracts for the sale, transportation or exchange of oil and
natural gas, production sharing 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), limited liability company agreements,
subscription agreements, stock purchase agreements, stockholder agreements and
other similar agreements with third parties (including Unrestricted
Subsidiaries);


 


provided,
however that a “Permitted Business Investment”
shall only include Investments in entities that are classified as pass-through
entities for U.S. Federal, state and local and foreign income tax purposes.


 


“Permitted Holders” means William F.
Berry and Winberta Holdings, Ltd. Any person or group whose acquisition of
beneficial ownership constitutes a Change of Control in respect of which a
Change of Control Offer is made in accordance with the requirements of the
Indenture 


 


26

















 


(or
would result in a Change of Control Offer in the absence of the waiver of such
requirement by Holders in accordance with the Indenture) shall thereafter
constitute additional Permitted Holders.


 


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


 


(1)                                  the Company, a Restricted
Subsidiary or a Person which shall, upon the making of such Investment, become
a Restricted Subsidiary; provided, however,
that the primary business of such Restricted Subsidiary is a Related Business;


 


(2)                                  another Person if as a
result of such Investment such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all its assets to, the
Company or a Restricted Subsidiary; provided, however,
that such Person’s primary business is a Related Business;


 


(3)                                  cash and Cash Equivalents;


 


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


 


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


 


(6)                                  loans or advances to, and
Guarantees of obligations of, employees, officers or directors of the Company
or any Restricted Subsidiary in the ordinary course of business in an aggregate
amount not in excess of $2.0 million with respect to all loans or advances made
since the Start Date (without giving effect to the forgiveness of any such
loan); provided, however, that the Company and
its Subsidiaries shall comply in all material respects with the provisions of
the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated
in connection therewith relating to the provision of any such loans and
advances as if the Company had filed a registration statement with the
Commission;


 


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


 


(8)                                  Investments made as a result
of the receipt of non-cash consideration from an Asset Disposition or other
disposition that was made pursuant to and in compliance with Section 6.11
of this Second Supplemental Indenture;


 


27
















 


(9)           Investments in existence on the Start Date;


 


(10)         Currency Agreements, Interest Rate Agreements,
Commodity Agreements and related Hedging Obligations, which transactions or
obligations are Incurred in compliance with Section 6.06 of this
Second Supplemental Indenture;


 


(11)         Investments by the Company or any of its Restricted
Subsidiaries, together with all other Investments pursuant to this clause (11),
in an aggregate amount at the time of such Investment not to exceed $10.0
million outstanding at any one time (with the fair market value of such
Investment being measured at the time made and without giving effect to
subsequent changes in value);


 


(12)         Guarantees issued in accordance with Section 6.06
of this Second Supplemental Indenture;


 


(13)         any Asset Swap made in accordance with Section 6.11
of this Second Supplemental Indenture;


 


(14)         Permitted Business Investments;


 


(15)         Investments constituting prepaid expenses or
advances or extensions of credit to customers or suppliers in the ordinary
course of business;


 


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


 


(17)         acquisitions of assets, Capital Stock or other
securities by the Company or a Subsidiary for consideration to the extent such
consideration consists of Common Stock of the Company; provided,
however, that the Qualified Proceeds from such sale of Capital Stock
(to the extent so used) shall be excluded from clause (C)(ii) of
Section 6.08(a) of this Second Supplemental Indenture;


 


(18)         Investments in the form of Capitalized Lease
Obligations or mortgage or purchase money financing in an aggregate principal
amount not to exceed $25.0 million at any time outstanding;


 


(19)         Investments in the form of bank deposits (other than
time deposits); and


 


(20)         Investments in the form of other deposits made in
the ordinary course of business and constituting Permitted Liens.


 


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


 


(1)           Liens securing Indebtedness under Credit Facilities
(and related Hedging Obligations and related Guarantees) permitted to be
Incurred under Section 6.06 of this Second Supplemental Indenture;


 


28

















 


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


 


(3)           Liens imposed by law, including carriers’,
warehousemen’s, mechanics’, materialmen’s and repairmen’s Liens, or related
contracts in the ordinary course of business, in each case for sums not yet due
or being contested in good faith by appropriate proceedings if a reserve or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made in respect thereof;


 


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


 


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


 


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


 


(7)           Liens securing Hedging Obligations permitted under
clause (6) of Section 6.06(b) of this Second Supplemental
Indenture;


 


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


 


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


 


29

















 


(10)         Liens for the purpose of securing Indebtedness
represented by Capitalized Lease Obligations, mortgage financings, purchase
money obligations or other payments Incurred to finance all or any part of the
purchase price or cost of construction or improvement of assets or property
(other than Capital Stock or other Investments) acquired, constructed or
improved by such Person; provided that:


 


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


 


(b)           such Liens are created within 180 days of
construction, acquisition or improvement of such assets or property and do not
encumber any other assets or property of such Person other than such assets or
property and assets affixed or appurtenant thereto and proceeds thereof;


 


(11)         Liens arising solely by virtue of any statutory or
common law provisions relating to banker’s Liens, rights of set-off or similar
rights or related contracts in the ordinary course of business and remedies as
to deposit accounts or other funds maintained with a depositary institution; provided that:


 


(a)           such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by such
Person in excess of those set forth by regulations promulgated by the Federal
Reserve Board; and


 


(b)           such deposit account is not intended by such Person
to provide collateral to the depository institution;


 


(12)         Liens arising from Uniform Commercial Code financing
statement filings regarding operating leases entered into by such Person in the
ordinary course of business;


 


(13)         Liens existing on the Issue Date (other than Liens
permitted under clause (1));


 


(14)         Liens on property or Capital Stock of a Person at
the time such Person becomes a Restricted Subsidiary, or is merged with or into
or consolidated with or acquired by, the Company or a Restricted Subsidiary; provided, however, that such Liens are not created, Incurred
or assumed in connection with, or in contemplation of, such event; provided further, however, that any such Lien may not extend
to any other property owned by the Company or any Restricted Subsidiary other
than improvements, additions and accessions to such property, dividends and
distributions in respect of such property and proceeds of any of the foregoing;


 


(15)         Liens on property at the time the Company or a
Restricted Subsidiary acquired the property, including any acquisition by means
of a merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that such Liens are
not created, Incurred or assumed in connection with, or in contemplation
of, such acquisition; provided further, however,
that such Liens 


 


30

















 


may
not extend to any other property owned by the Company or any Restricted Subsidiary
other than improvements, additions and accessions to such property, dividends
and distributions in respect of such property and proceeds of any of the
foregoing;


 


(16)         Liens in favor of the Company or a Restricted
Subsidiary;


 


(17)         Liens securing the Notes and Subsidiary Guarantees;


 


(18)         Liens securing Refinancing Indebtedness Incurred to
refinance, refund, replace, amend, extend or modify, as a whole or in part, Indebtedness
that was previously so secured pursuant to clauses (9), (10),
(13), (14), (15), (17) and (18) of this
definition, provided that any such Lien is limited
to all or part of the same property or assets (plus improvements, additions,
accessions, proceeds, dividends and distributions in respect thereof) that
secured (or, under the written arrangements under which the original Lien
arose, could secure) the Indebtedness being refinanced or is in respect of
property that is the security for a Permitted Lien hereunder;


 


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


 


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


 


(21)         Liens in respect of Production Payments and Reserve
Sales, which Liens shall be limited to the property that is the subject of such
Production Payments and Reserve Sales and proceeds thereof;


 


(22)         Liens arising under farm-out agreements, farm-in
agreements, division orders, mineral leases, partnership agreements, joint
venture agreements, contracts for the sale, purchase, exchange, transportation,
gathering or processing of Hydrocarbons and Related Assets, unitizations and
pooling designations, declarations, orders and agreements, development
agreements, operating agreements, production sales contracts, area of mutual
interest agreements, gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other disposal agreements,
seismic or geophysical permits or agreements, and other agreements which are
customary in any Related Business; provided, however,
in all instances that such Liens are limited to the assets that are the subject
of the relevant agreement, program, order or contract and improvements,
additions and accessions thereto, and proceeds of any of the foregoing;


 


(23)         Liens on pipelines or pipeline facilities that arise
by operation of law;


 


(24)         Liens encumbering assets under construction (and
improvements, additions and accessions thereto and proceeds of any of the
foregoing) arising from progress or partial payments by a customer of the
Company or its Restricted Subsidiaries relating to such assets;


 


31

















 


(25)         Liens arising under the Indenture in favor of the
Trustee for its own benefit and similar Liens in favor of other trustees,
agents and representatives arising under instruments governing Indebtedness
permitted to be incurred under the Indenture, provided,
that such Liens are solely for the benefit of the trustees, agents, or
representatives in their capacities as such and not for the benefit of the
Holders of such Indebtedness;


 


(26)         Liens arising from the deposit of funds or
securities in trust for the purpose of decreasing or defeasing Indebtedness so
long as such deposit of funds or securities and such decreasing or defeasing of
Indebtedness are permitted under Section 6.08 of this Second
Supplemental Indenture; and


 


(27)         Liens securing Indebtedness (other than Subordinated
Obligations and Guarantor Subordinated Obligations) and other unsubordinated
obligations in an aggregate amount outstanding at any one time not to exceed
$15.0 million.


 


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


 


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


 


“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 (including Volumetric Production Payments and Dollar-Denominated
Production Payments), 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.


 


“Prospectus Supplement” means the
base prospectus, as amended dated August 9, 2009 contained in the Company’s
Registration Statement on Form S-3, as supplemented by the prospectus
supplement dated October 27, 2010 with respect to the Notes.


 


“Qualified Proceeds” means any of the
following or any combination thereof: (1) Net Cash Proceeds, (2) Cash
Equivalents, (3) assets that are used or useful in a Related Business and (4) the
Capital Stock of any Person engaged in a Related Business that becomes a
Restricted 


 


32

















 


Subsidiary
of the Company or merges with or into the Company or a Restricted Subsidiary of
the Company.


 


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


 


“Receivable” means a right to receive
payment arising from a sale or lease of goods or the performance of services by
a Person pursuant to an arrangement with another Person pursuant to which such
other Person is obligated to pay for goods or services under terms that permit
the purchase of such goods and services on credit and shall include, in any
event, any items of property that would be classified as an “account,” “chattel paper,”
“payment intangible” or “instrument” under the Uniform Commercial Code as in effect
in the State of New York and any “supporting obligations”
as so defined.


 


“Receivables Fees” means any fees or
interest paid to purchasers or lenders providing the financing in connection
with a securitization transaction, factoring agreement or other similar agreement,
including any such amounts paid by discounting the face amount of Receivables
or participations therein transferred in connection with a securitization
transaction, factoring agreement or other similar arrangement, regardless of
whether any such transaction is structured as on-balance sheet or off-balance
sheet or through a Restricted Subsidiary or an Unrestricted Subsidiary.


 


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


 


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


 


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


 


33

















 


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


 


(4)           if the Indebtedness being refinanced is subordinated
in right of payment to the Notes or the Subsidiary Guarantees, such Refinancing
Indebtedness is subordinated in right of payment to the Notes or the Subsidiary
Guarantees on terms at least as favorable to the Holders as those contained in
the documentation governing the Indebtedness being refinanced.


 


“Related Assets” means steam,
electricity, by-products of the utilization of Hydrocarbons, products produced
in association with Hydrocarbons, minerals, and other assets commonly created,
recovered or produced in the course of the conduct of any Related Business.


 


“Related Business” means (1) any
business which is the same as or related, ancillary or complementary to any of
the businesses of the Company and its Restricted Subsidiaries on the Issue
Date, (2) the Oil and Gas Business and (3) the business of acquiring,
exploiting, developing, producing, operating, gathering, marketing, treating,
processing, storing, refining, selling and transporting Related Assets.


 


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


 


“Restricted Subsidiary” means any
Subsidiary of the Company other than an Unrestricted Subsidiary.


 


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


 


“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations of the Commission
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 Credit Facility” means the
Amended and Restated Credit Agreement dated as of July 15, 2008 among the
Company, Wells Fargo Bank, National Association, as Administrative Agent, and
the lenders parties thereto from time to time, as the same may be amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time, with the same or different agents or lenders (including
increasing the amount loaned or the aggregate commitments of the lenders
thereunder, provided that such additional
Indebtedness is Incurred in accordance with Section 6.06 of this
Second Supplemental Indenture); provided that a
Senior Credit Facility shall not (1) include Indebtedness issued, created
or Incurred pursuant to a registered offering of securities under the
Securities Act or a private placement of securities 


 


34

















 


(including
under Rule 144A or Regulation S) pursuant to an exemption from the
registration requirements of the Securities Act or (2) relate to
Subordinated Obligations.


 


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


 


“Start Date” means October 24,
2006.


 


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


 


“Subordinated Obligation” means any
Indebtedness of the Company (whether outstanding on the Issue Date or
thereafter Incurred) which is subordinated in right of payment to the Notes
pursuant to a written agreement.


 


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


 


“Subsidiary Guarantee” means,
individually, any Guarantee of payment of the Notes by a Subsidiary Guarantor
pursuant to the terms of the Indenture and any supplemental indenture thereto,
and, collectively, all such Guarantees. Each such Subsidiary Guarantee shall be
in the form prescribed by the Indenture, including Article Nine of this
Second Supplemental Indenture.


 


“Subsidiary Guarantor” means any
Restricted Subsidiary that provides a Subsidiary Guarantee after the Issue Date
in accordance with the Indenture; provided that
upon release or discharge of such Restricted Subsidiary from its Subsidiary
Guarantee in accordance with the Indenture, such Restricted Subsidiary ceases
to be a Subsidiary Guarantor.


 


“Treasury Rate” means the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly available at least two
Business Days prior to the Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data))
most nearly equal to the period from the Redemption Date to November 1,
2015; provided, however, that if the period
from the Redemption Date to November 1, 2015 is not equal to the constant
maturity of a United States 


 


35

















 


Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the period from the Redemption Date
to November 1, 2015 is less than one year, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.


 


“Unrestricted Subsidiary” means:


 


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


 


(2)           any Subsidiary of an Unrestricted Subsidiary.


 


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


 


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


 


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


 


(3)           such designation and the Investment of the Company
in such Subsidiary complies with Section 6.08 of this Second
Supplemental Indenture;


 


(4)           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;


 


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


 


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


 


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


 


(6)           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.


 


36

















 


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


 


The
Board of Directors of the Company may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided that
immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof and the Company could Incur at least $1.00 of additional Indebtedness
pursuant to Section 6.06(a) of this Second Supplemental
Indenture on a pro forma basis taking into account such designation.


 


“U.S. Government Obligations” means
securities that are (a) direct obligations of the United States of America
for the timely payment of which its full faith and credit is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation of the United States of
America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depositary receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act), as
custodian with respect to any such U.S. Government Obligations or a specific
payment of principal of or interest on any such U.S. Government Obligations
held by such custodian for the account of the Holder of such depositary
receipt; provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the Holder of such depositary receipt from any amount received by
the custodian in respect of the U.S. Government Obligations or the specific
payment of principal of or interest on the U.S. Government Obligations
evidenced by such depositary receipt.


 


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


 


“Wholly Owned Subsidiary” means a
Restricted Subsidiary, all of the Capital Stock of which (other than Foreign
Required Minority Shares) is owned by the Company or another Wholly Owned
Subsidiary.


 


SECTION 2.03              Other Definitions.


 


	
  Term

  	
   

  	
  Defined in Section

  	
   

  
	
  “Additional Notes”

  	
   

  	
  1.01

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  6.12

  	
   

  



 


37






 












 


	
  Term

  	
   

  	
  Defined in Section

  	
   

  
	
  “Agent
  Members”

  	
   

  	
  1.02

  	
   

  
	
  “Asset
  Disposition Offer”

  	
   

  	
  6.11(a)

  	
   

  
	
  “Asset
  Disposition Offer Amount”

  	
   

  	
  6.11(b)

  	
   

  
	
  “Asset
  Disposition Offer Period”

  	
   

  	
  6.11(b)

  	
   

  
	
  “Asset
  Disposition Purchase Date”

  	
   

  	
  6.11(b)

  	
   

  
	
  “Change
  of Control Payment”

  	
   

  	
  6.14(1)

  	
   

  
	
  “Excess
  Proceeds”

  	
   

  	
  6.11

  	
   

  
	
  “Funding
  Guarantor”

  	
   

  	
  9.04

  	
   

  
	
  “General
  Partner”

  	
   

  	
  2.02
  (definition of “Indebtedness”)

  	
   

  
	
  “Joint
  Venture”

  	
   

  	
  2.02
  (definition of “Indebtedness”)

  	
   

  
	
  “Legal
  Defeasance”

  	
   

  	
  8.02

  	
   

  
	
  “Obligations”

  	
   

  	
  9.01

  	
   

  
	
  “Pari
  Passu Notes”

  	
   

  	
  6.11(a)

  	
   

  
	
  “Payment
  Default”

  	
   

  	
  3.02(6)(a)

  	
   

  
	
  “Qualifying
  SLB”

  	
   

  	
  2.02
  (clause (20) of the definition of “Asset Disposition”)

  	
   

  
	
  “Reinstatement
  Date”

  	
   

  	
  6.05

  	
   

  
	
  “Restricted
  Payment”

  	
   

  	
  6.08(a)

  	
   

  
	
  “Successor
  Company”

  	
   

  	
  4.02(1)

  	
   

  
	
  “Suspended
  Covenants”

  	
   

  	
  6.05

  	
   

  
	
  “Suspension
  Period”

  	
   

  	
  6.05

  	
   

  



 


ARTICLE THREE

EVENTS OF DEFAULT WITH RESPECT TO THE NOTES


 


SECTION 3.01              Original Indenture


 


Sections
501, 502 and 513 of the Original Indenture shall not apply to the Notes; and,
insofar as relating to the Notes, any reference to Section 501, 502 or 513
in the Original Indenture shall instead be deemed to refer to Section 3.02,
3.03 or 3.04, respectively, of this Second Supplemental
Indenture.


 


SECTION 3.02              Events of Default


 


“Event of Default,” whenever used in
the Original Indenture or this Second Supplemental Indenture with respect to
the Notes, means any one of the following events:


 


(1)                                  default in any payment of
interest, including Additional Interest, on any Note when due, continued for 30
days;


 


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


 


(3)                                  failure by the Company or
any Subsidiary Guarantor to comply with its obligations under Article Four
of this Second Supplemental Indenture;


 


38

















 


(4)                                  failure by the Company to
comply for 30 days after notice as provided below with any of its obligations
under Sections 6.06, 6.07, 6.08, 6.09, 6.10,
6.11, 6.12, 6.13, 6.14, or 6.16 of this
Second Supplemental Indenture or Section 1008 of the Original Indenture,
as amended by Section 6.01(b) of this Second Supplemental Indenture
(in each case, other than a failure to purchase Notes which constitutes an
Event of Default under clause (2) above);


 


(5)                                  (a) failure by the
Company to comply with Section 6.15 of this Second Supplemental
Indenture for 180 days (and, to the extent Section 314(a) of the TIA
is deemed to be a part of the Indenture pursuant to Section 318 of the
TIA, failure by the Company to comply with such deemed covenant for such period
of time as is necessary such that such period ends at the end of such 180-day
period); or (b) failure by the Company to comply for 60 days after notice
as provided below with its other agreements contained in the Indenture;


 


(6)                                  default under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment of which is Guaranteed by
the Company or any of its Restricted Subsidiaries), other than Indebtedness
owed to the Company or a Restricted Subsidiary, whether such Indebtedness or
Guarantee now exists, or is created after the Issue Date, which default:


 


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


 


(b)                                 results in the acceleration
of such Indebtedness prior to its maturity;


 


and,
in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$25.0 million or more;


 


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


 


(i)                                        commences a voluntary case
or proceeding;


 


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


 


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


 


39

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


or
any similar relief is granted under any foreign laws and the order, decree or
relief remains unstayed and in effect for 60 days;


 


(8)                                  failure by the Company or
any Significant Subsidiary or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary to pay final judgments aggregating in excess of $25.0 million (net
of any amounts covered by insurance with a reputable and creditworthy insurance
company that has not disclaimed liability therefor in writing), which judgments
are not paid, discharged or stayed for a period of 60 days; or


 


(9)                                  (a) any Subsidiary
Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
the Company and its Restricted Subsidiaries), would constitute a 


 


40

















 


Significant
Subsidiary (i) ceases to be in full force and effect (except as
contemplated by the terms of the Indenture) for 5 Business Days after notice as
provided below or (ii) is declared null and void in a judicial proceeding
or (b) any Subsidiary Guarantor that is a Significant Subsidiary or group
of Subsidiary Guarantors that taken together as of the latest audited
consolidated financial statements of the Company and its Restricted
Subsidiaries would constitute a Significant Subsidiary denies or disaffirms its
obligations under the Indenture or its Subsidiary Guarantee.


 


However,
a Default under clauses (4), (5)(b) and (9)(a)(i) of
this Section 3.02 shall not constitute an Event of Default until
the Trustee or the Holders of 25% in principal amount of the outstanding Notes
notify the Company of the Default and the Company does not cure such Default
within the time specified in clauses (4), (5)(b) and (9)(a)(i) of
this Section 3.02 after receipt of such notice.


 


During
the continuance of a Default under clause (5)(a) above of this
Section 3.02, the interest rate on the Notes shall increase by the
Additional Interest.


 


SECTION 3.03              Acceleration


 


With
respect to the Notes, if an Event of Default (other than an Event of Default
described in clause (7) of Section 3.02 of this
Second Supplemental Indenture) occurs and is continuing, the Trustee by notice
to the Company, or the Holders of at least 25% in principal amount of the
outstanding Notes by notice to the Company and the Trustee, may, and the
Trustee at the request of such Holders shall, declare the principal of,
premium, if any, and accrued and unpaid interest, if any, on all the Notes to
be due and payable. Upon such a declaration, such principal, premium and
accrued and unpaid interest shall be immediately due and payable. In the event
of a declaration of acceleration of the Notes because an Event of Default
described in clause (6) of Section 3.02 of this
Second Supplemental Indenture has occurred and is continuing, the declaration
of acceleration of the Notes shall be automatically annulled if the default
triggering such Event of Default pursuant to clause (6) shall
be remedied or cured by the Company or a Restricted Subsidiary or waived by the
Holders of the relevant Indebtedness within 20 days after the declaration of
acceleration with respect thereto and if (1) the annulment of the
acceleration of the Notes would not conflict with any judgment or decree of a
court of competent jurisdiction and (2) all existing Events of Default,
except nonpayment of principal, premium or interest on the Notes that became
due solely because of the acceleration of the Notes, have been cured or waived.
If an Event of Default described in clause (7) of Section 3.02
of this Second Supplemental Indenture occurs and is continuing, the principal
of, premium, if any, and accrued and unpaid interest on all the Notes shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders. The Holders of a majority in
principal amount of the outstanding Notes may waive all past defaults (except
with respect to nonpayment of principal, premium or interest) and rescind any
such acceleration with respect to the Notes and its consequences if (1) rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction and (2) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Notes that
have become due solely by such declaration of acceleration, have been cured or
waived.


 


41

















 


SECTION 3.04              Control by Holders


 


Subject
to Section 509 of the Original Indenture, with respect to the Notes, the
Holders of a majority in principal amount of the outstanding Notes 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, provided that the Trustee may refuse to
follow any direction:


 


(1)                                  that conflicts with law or
the Indenture, and


 


(2)                                  subject to Sections 601 and
602 of the Original Indenture, that the Trustee determines is unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability;


 


provided,
however, that the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.


 


ARTICLE FOUR

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER

OR LEASE WITH RESPECT TO THE NOTES


 


SECTION 4.01              Original Indenture


 


Article Eight
of the Original Indenture shall not apply to the Notes.


 


SECTION 4.02              Company May Consolidate, Etc.,
Only on Certain Terms


 


With
respect to the Notes, the Company shall not consolidate with or merge with or
into, or convey, transfer or lease all or substantially all its assets to, any
Person, unless:


 


(1)                                  the resulting, surviving or
transferee Person (the “Successor Company”)
shall be a corporation organized and existing under the laws of the United
States of America, any State of the United States or the District of Columbia
and the Successor Company (if not the Company) shall expressly assume, by
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the Notes
and the Indenture;


 


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


 


(3)                                  immediately after giving
effect to such transaction, the Successor Company would be able to Incur at
least $1.00 of additional Indebtedness pursuant to Section 6.06(a) of
this Second Supplemental Indenture or the Consolidated 


 


42

















 


Coverage
Ratio for the Successor Company and its Restricted Subsidiaries would be
greater than such ratio for the Company and its Restricted Subsidiaries
immediately prior to such transaction;


 


(4)                                  each Subsidiary Guarantor
(unless it is the other party to the transactions above, in which case clause (1) of
this Section 4.02 shall apply or unless the Company is the
Successor Company and such Subsidiary Guarantor was a Subsidiary Guarantor
immediately prior to such transaction) shall have by supplemental indenture
confirmed that its Subsidiary Guarantee shall apply to such Person’s
obligations in respect of the Indenture and the Notes; and


 


(5)                                  the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
together stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with the Indenture.


 


For
purposes of this Section 4.02, the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.


 


Notwithstanding
the preceding clause (3) of this Section 4.02, (a) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company or any Subsidiary Guarantor and (b) the
Company may merge with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction to realize tax benefits; provided that, in the case of a Restricted Subsidiary that
merges into the Company or any Subsidiary Guarantor, the Company shall not be
required to comply with the preceding clause (5) of this Section 4.02.


 


SECTION 4.03              Successor Substituted


 


With
respect to the Notes, upon any consolidation of the Company with, or merger of
the Company into, any other Person or any conveyance, transfer or lease of all
or substantially all its assets in accordance with Section 4.02 of
this Second Supplemental Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under the Indenture with the same effect
as if such successor Person had been named as the Company herein, and the
predecessor Company shall be released from its obligations under the Indenture,
but, in the case of a lease of all or substantially all its assets, the
predecessor Company shall not be released from the obligation to pay the
principal of and interest on the Notes.


 


SECTION 4.04              Subsidiary Guarantors May Consolidate, Etc.,
Only on Certain Terms


 


With
respect to the Notes, the Company shall not permit any Subsidiary Guarantor to
consolidate with, merge with or into any Person (other than the Company or
another Subsidiary Guarantor) and shall not permit the conveyance, transfer or
lease of all or substantially all of the 


 


43

















 


assets
of any Subsidiary Guarantor (other than to the Company or another Subsidiary
Guarantor) unless:


 


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


 


(2)                                  the transaction is made in
compliance with Section 6.11 of this Second Supplemental Indenture
(it being understood that only such portion of the Net Available Cash as is
required to be applied on the date of such transaction in accordance with the terms
of the Indenture needs to be applied in accordance therewith at such time), Section 6.13
of this Second Supplemental Indenture and this Article Four.


 


ARTICLE FIVE

SUPPLEMENTAL INDENTURES WITH RESPECT TO THE NOTES


 


SECTION 5.01              Original Indenture


 


Sections
901 and 902 of the Original Indenture shall not apply to the Notes; and,
insofar as relating to the Notes, any reference in the Original Indenture to
Sections 901 or 902 thereof shall refer instead to Section 5.02 or Section 5.03
of this Second Supplemental Indenture. 
Any reference in the Original Indenture to Article Nine thereof
shall be deemed to refer to such Article Nine as modified to include
Sections 5.02 and 5.03 hereof in lieu of Sections 901 and 902 of the Original
Indenture.


 


SECTION 5.02              Supplemental Indentures
Without Consent of Holders


 


With
respect to the Notes, without the consent of any Holder, the Company, any
Subsidiary Guarantors and the Trustee may amend the Indenture and the Notes to:


 


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


 


(2)                                  provide for the assumption
by a successor Person of the obligations of the Company or any Subsidiary
Guarantor under the Indenture;


 


44

















 


(3)                                  provide for uncertificated
Notes in addition to or in place of certificated Notes (provided
that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Notes are described in Section 163(f) (2) (B) of
the Code);


 


(4)                                  add Guarantees with respect
to the Notes or release a Subsidiary Guarantor from its obligations under its
Subsidiary Guarantee or the Indenture in accordance with the applicable
provisions of the Indenture;


 


(5)                                  secure the Notes;


 


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


 


(7)                                  make any change that does
not adversely affect the rights of any Holder;


 


(8)                                  comply with any requirement
of the Commission in connection with the qualification of the Indenture under
the Trust Indenture Act;


 


(9)                                  provide for the appointment
of a successor Trustee; provided that
the successor Trustee is otherwise qualified and eligible to act as such under
the terms of the Indenture; or


 


(10)                            conform the text of the
Indenture, the Notes or the Subsidiary Guarantees to any provision of the “Description
of Notes” contained in the Prospectus Supplement to the extent that such
provision in the “Description of Notes” contained in the Prospectus Supplement
is intended to be a verbatim recitation of a provision of the Indenture, the
Notes or the Subsidiary Guarantees.


 


After
an amendment under this Section 5.02 becomes effective, the Company
shall mail to Holders a notice briefly describing such amendment. The failure
to give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 5.02.


 


SECTION 5.03              Supplemental Indentures With
Consent of Holders


 


The
Company, any Subsidiary Guarantors and the Trustee may amend or supplement the
Indenture or the Notes without notice to any Holder but with the written
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding (including without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Notes) and, subject
to the exceptions set forth in Section 514 of the Original Indenture, any
past default or compliance with any provisions of the Indenture may be waived
with respect to the Notes with the consent of the Holders of a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes). However, without the consent of each Holder affected, an
amendment, supplement or waiver may not:


 


(1)                                  reduce the amount of Notes
whose Holders must consent to an amendment;


 


45

















 


(2)                                  reduce the stated rate of or
extend the stated time for payment of interest on any Note;


 


(3)                                  reduce the principal of or
extend the Stated Maturity of any Note;


 


(4)                                  reduce the premium payable
upon the redemption or repurchase of any Note or change the time at which any
Note may be redeemed or repurchased pursuant to Sections 6.11, 6.14
or 7.05 of this Second Supplemental Indenture whether through an
amendment or waiver of provisions in the covenants, definitions or otherwise
(except amendments to the definitions of “Change of Control” and “Permitted
Holder”);


 


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


 


(6)                                  impair the right of any
Holder to receive payment of principal, premium, if any, and interest on such
Holder’s Notes on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder’s Notes;


 


(7)                                  make any change in the
amendment provisions which require each Holder’s consent or in the waiver
provisions;


 


(8)                                  modify the ranking of the
Notes in any manner that adversely affects the rights of any Holder of Notes;
or


 


(9)                                  modify the Subsidiary
Guarantees in any manner adverse to the Holders of the Notes.


 


It
shall not be necessary for the consent of the Holders under this Section 5.03
to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof. A consent to any
amendment or waiver under the Indenture by any Holder of the Notes given in
connection with a tender of such Holder’s Notes shall not be rendered invalid
by such tender.


 


After
an amendment under this Section 5.03 becomes effective, the Company
shall mail to Holders a notice briefly describing such amendment. The failure
to give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 5.03.


 


ARTICLE SIX

COVENANTS WITH RESPECT TO THE NOTES


 


SECTION 6.01              Original Indenture


 


(a)           Sections 1001, 1005 and 1007 of the Original
Indenture shall not apply to the Notes.


 


46

















 


(b)           The last word of Section 1008 of the Original
Indenture shall be deleted and replaced with the word “amendment”.


 


(c)           With respect to the Notes, the references in Section 1009
of the Original Indenture to (1) Section 901(2) shall also
include Section 5.02(6) of this Second Supplemental Indenture,
and (2) Section 1005 of the Original Indenture shall be amended to
refer to Section 6.03 of this Second Supplemental Indenture.


 


SECTION 6.02              Payment of Principal,
Premium and Interest


 


The
Company covenants and agrees for the benefit of the Notes that it shall duly
and punctually pay the principal of and any premium and interest on the Notes
in accordance with the terms of the Notes and the Indenture.


 


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


 


SECTION 6.03              Existence


 


Subject
to Article Four and Section 9.02 of this Second
Supplemental Indenture, the Company and each of the Subsidiary Guarantors shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and that of each Restricted Subsidiary and
the corporate rights (charter and statutory), licenses and franchises of the
Company and each Restricted Subsidiary; provided, however,
that the Company shall not be required to preserve any such existence (except
the Company), right, license or franchise if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof would not have a material
adverse effect on the ability of the Company to perform its obligations under
the Notes or the Indenture, provided, further,
the Company and each Restricted Subsidiary may merge in accordance with Article Four
and Section 9.02 of this Second Supplemental Indenture.


 


SECTION 6.04              Statement by Officers as to
Default


 


The
Company shall deliver to the Trustee, as soon as possible and in any event
within thirty days after the Company becomes aware of the occurrence of any
Event of Default or an event which, with notice or the lapse of time or both,
would constitute a certain Default, an Officers’ Certificate setting forth the
details of such Event of Default or default and the action which the Company is
taking or proposing to take with respect thereto.


 


SECTION 6.05              Effectiveness of Covenants


 


Following
the first day on which:


 


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


 


47






 












 


(b)           no Default has occurred and is continuing under the
Indenture;


 


the
Company and its Restricted Subsidiaries shall not be subject to Sections 6.06,
6.07, 6.08, 6.10, 6.11, 6.12, 6.13,
and clause (3) of Section 4.02 of this Second
Supplemental Indenture (collectively, the “Suspended Covenants”).
If at any time the Notes’ credit rating is downgraded from an Investment Grade
Rating by any Rating Agency or a Default or Event of Default occurs and is
continuing, then the Suspended Covenants shall thereafter be reinstated as if
such covenants had never been suspended (the “Reinstatement
Date”) and thereafter be applicable pursuant to the terms of the
Indenture (including in connection with performing any calculation or
assessment to determine compliance with the terms of the Indenture), unless and
until the Notes subsequently attain an Investment Grade Rating (in which event
the Suspended Covenants shall no longer be in effect for such time that the
Notes maintain an Investment Grade Rating and no Default or Event of Default
has occurred and is continuing);


 


provided,
however, that no Default, Event of Default or breach of any kind shall be
deemed to exist under the Indenture, the Notes or the Subsidiary Guarantees
with respect to the Suspended Covenants based on, and none of the Company or
any of its Subsidiaries shall bear any liability for, any actions taken or
events occurring after the Notes attain an Investment Grade Rating and before
any reinstatement of such Suspended Covenants as provided above, or any actions
taken at any time pursuant to any contractual obligation arising prior to such
reinstatement, regardless of whether such actions or events would have been
permitted if the applicable Suspended Covenants remained in effect during such
period. The period of time between the date of suspension of the covenants and
the Reinstatement Date is referred to as the “Suspension
Period.”


 


On
the Reinstatement Date, all Indebtedness Incurred during the Suspension Period
shall be classified to have been Incurred pursuant to Section 6.06(a) of
this Second Supplemental Indenture or one of the clauses set forth in Section 6.06(b) of
this Second Supplemental Indenture (to the extent such Indebtedness would be
permitted to be Incurred thereunder as of the Reinstatement Date and after
giving effect to Indebtedness Incurred prior to the Suspension Period and
outstanding on the Reinstatement Date). To the extent such Indebtedness would
not be so permitted to be Incurred pursuant to the Section 6.06(a) or
(b) of this Second Supplemental Indenture, such Indebtedness shall
be deemed to have been outstanding on the Issue Date, so that it is classified
as permitted under clause (4)(b) of Section 6.06(b) of
this Second Supplemental Indenture. Calculations made after the Reinstatement
Date of the amount available to be made as Restricted Payments under Section 6.08
of this Second Supplemental Indenture shall be made as though Section 6.08
of this Second Supplemental Indenture had been in effect since the Issue Date
and throughout the Suspension Period. Accordingly, Restricted Payments made
during the Suspension Period shall reduce the amount available to be made as
Restricted Payments under Section 6.08(a) of this Second
Supplemental Indenture.


 


During
any period when the Suspended Covenants are suspended, the Board of Directors
of the Company may not designate any of the Company’s Subsidiaries as
Unrestricted Subsidiaries pursuant to the Indenture.


 


48

















 


SECTION 6.06              Limitation on Indebtedness


 


(a)           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, Incur any Indebtedness (including Acquired
Indebtedness); provided, however, that the
Company and any Subsidiary Guarantor may Incur Indebtedness if on the date
thereof:


 


(1)           the Consolidated Coverage
Ratio for the Company and its Restricted Subsidiaries is at least 2.50 to 1.00;
and


 


(2)           no Default or Event of
Default shall have occurred or be continuing or would occur as a consequence of
Incurring the Indebtedness or transactions relating to such Incurrence.


 


(b)           Section 6.06(a) of this Second
Supplemental Indenture shall not prohibit the Incurrence of the following
Indebtedness:


 


(1)           Indebtedness of the Company
or any Subsidiary Guarantor Incurred pursuant to Credit Facilities in an
aggregate amount outstanding at any time up to the greater of (a) $1.0
billion and (b) 30% of Adjusted Consolidated Net Tangible Assets
determined as of the date of the Incurrence of such Indebtedness;


 


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


 


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


 


(A)          if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated to
the prior payment in full in cash of all obligations with respect to the Notes;


 


(B)           if a Subsidiary Guarantor is
the obligor on such Indebtedness and the Company or a Subsidiary Guarantor is
not the obligee, such Indebtedness is subordinated in right of payment to the
Subsidiary Guarantee of such Subsidiary Guarantor; and


 


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


 


49

















 


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


 


(4)           Indebtedness represented by (a) the
Notes issued on the Issue Date and any Subsidiary Guarantees, (b) any
Indebtedness (other than the Indebtedness described in clauses (1),
(2), (3), (6), (8), (9) and (10) of
this Section 6.06(b)) outstanding on the Issue Date and (c) any
Refinancing Indebtedness Incurred in respect of any Indebtedness described in
this clause (4) or clause (5) of this Section 6.06(b) or
Incurred pursuant to Section 6.06(a) of this Second
Supplemental Indenture;


 


(5)           Indebtedness of a Restricted
Subsidiary Incurred and outstanding on the date on which such Restricted
Subsidiary was acquired by, or merged into, the Company or any Restricted
Subsidiary or such Restricted Subsidiary was designated as such (other than
Indebtedness Incurred (a) to provide all or any portion of the funds
utilized to consummate the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or
was otherwise acquired by the Company or (b) otherwise in connection with,
or in contemplation of, such acquisition); provided, however,
that at the time such Restricted Subsidiary is so acquired, merged or
designated, the Company would have been able to Incur $1.00 of additional
Indebtedness pursuant to Section 6.06(a) of this Second Supplemental
Indenture after giving effect to the Incurrence of such Indebtedness pursuant
to this clause (5);


 


(6)           Indebtedness under Hedging
Obligations that are Incurred in the ordinary course of business (and not for
speculative purposes) (a) for the purpose of fixing or hedging interest
rate risk with respect to any Indebtedness permitted under the Indenture; (b) for
the purpose of fixing or hedging currency exchange rate risk with respect to
any currency exchanges; or (c) for the purpose of fixing or hedging
commodity price risk with respect to any commodities;


 


(7)           the Incurrence by the
Company or any of its Restricted Subsidiaries of Indebtedness represented by
Capitalized Lease Obligations, mortgage financings, purchase money obligations
or other payments, in each case Incurred to finance all or any part of the
purchase price or cost of construction or improvement of assets or property
(other than Capital Stock or other Investments) acquired, constructed or
improved by the Company or such Restricted Subsidiary and related financing
costs, and Attributable Indebtedness, and all Refinancing Indebtedness Incurred
to refund, defease, renew, extend, refinance or replace any Indebtedness
Incurred pursuant to this clause (7), in an aggregate principal
amount not to exceed $25.0 million at any time outstanding;


 


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


 


(9)           Indebtedness arising from
agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred or assumed in connection with the acquisition or
disposition of any business, assets or Capital Stock of a Restricted Subsidiary
or any 


 


50

















 


business or assets of the Company and Refinancing
Indebtedness Incurred with the same counterparty in respect thereof, provided that the maximum aggregate liability in respect of
all such Indebtedness shall at no time exceed the gross proceeds actually paid
or received by the Company and its Restricted Subsidiaries in connection with
such acquisition or disposition;


 


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


 


(11)         Indebtedness in respect of
the financing of insurance premiums with the providers of such insurance or
their Affiliates in the ordinary course of business;


 


(12)         for the avoidance of doubt,
in-kind obligations relating to net oil or natural gas balancing positions
arising in the ordinary course of business; and


 


(13)         in addition to the items
referred to in clauses (1) through (12) above, Indebtedness
of the Company and its Restricted Subsidiaries in an aggregate outstanding
principal amount which, when taken together with the principal amount of all
other Indebtedness Incurred pursuant to this clause (13) and then
outstanding, shall not exceed $20.0 million at any time outstanding.


 


The
Company shall not Incur any Indebtedness under the preceding paragraph if the
proceeds thereof are used, directly or indirectly, to refinance any
Subordinated Obligations of the Company unless such Indebtedness shall be
subordinated to the Notes to at least the same extent as such Subordinated
Obligations. No Subsidiary Guarantor shall Incur any Indebtedness under the
preceding paragraph if the proceeds thereof are used, directly or indirectly,
to refinance any Guarantor Subordinated Obligations of such Subsidiary
Guarantor unless such Indebtedness shall be subordinated to the obligations of
such Subsidiary Guarantor under its Subsidiary Guarantee to at least the same
extent as such Guarantor Subordinated Obligations.  No Restricted Subsidiary (other than a
Subsidiary Guarantor) may Incur any Indebtedness if the proceeds are used to
refinance Indebtedness of the Company or a Subsidiary Guarantor.


 


(c)           For purposes of determining compliance with, and the
outstanding principal amount of any particular Indebtedness Incurred pursuant
to and in compliance with, this Section 6.06:


 


(1)           in the event that
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in this Section 6.06, the Company, in its sole
discretion, shall classify such item of Indebtedness on the date of Incurrence
and may from time to time re-classify such item of Indebtedness in any manner
that complies with this Section 6.06 and only be required to
include the amount and type of such Indebtedness in one of such clauses; provided that all Indebtedness outstanding on the Issue Date
under the Senior Credit Facility shall be deemed Incurred under clause (1) of
Section 6.06(b) 


 


51

















 


and not Section 6.06(a) of this
Second Supplemental Indenture or clause (4) of Section 6.06(b);


 


(2)           Guarantees of, or
obligations in respect of letters of credit relating to, Indebtedness
which is otherwise included in the determination of a particular amount of
Indebtedness shall not be included;


 


(3)           if obligations in respect of
letters of credit are Incurred pursuant to a Credit Facility and are being treated
as Incurred pursuant to clause (1) of Section 6.06(b) and
the letters of credit relate to other Indebtedness, then such other
Indebtedness shall not be included;


 


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


 


(5)           Indebtedness permitted by
this Section 6.06 need not be permitted solely by reference to one
provision permitting such Indebtedness but may be permitted in part by one such
provision and in part by one or more other provisions of this Section 6.06
permitting such Indebtedness;


 


(6)           the principal amount of any
Indebtedness outstanding in connection with a securitization transaction or
series of securitization transactions is the amount of obligations outstanding
under the legal documents entered into as part of such transaction that would
be characterized as principal if such transaction were structured as a secured
lending transaction rather than as a purchase relating to such transaction; and


 


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


 


Accrual
of interest, accrual of dividends, the accretion of accreted value, the payment
of interest in the form of additional Indebtedness, the payment of dividends in
the form of additional shares of Preferred Stock or Disqualified Stock and the
incurrence of unrealized losses or charges in respect of Hedging Obligations
(including those resulting from the application of FAS 133 and similar
provisions), in each case shall be deemed not to be Incurrences of Indebtedness
for purposes of this Section 6.06. The amount of any Indebtedness
outstanding as of any date shall be (i) the accreted value thereof in the
case of any Indebtedness issued with original issue discount and (ii) the
principal amount or liquidation preference thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.


 


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


 


52

















 


Indebtedness
is not permitted to be Incurred as of such date under this Section 6.06,
the Company shall be in Default of this Section 6.06).


 


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-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so
long as the principal amount of such refinancing Indebtedness does not exceed
the principal amount of such Indebtedness being refinanced. Notwithstanding any
other provision of this Section 6.06, the maximum amount of
Indebtedness that the Company may Incur pursuant to this Section 6.06
shall not be deemed to be exceeded solely as a result of fluctuations in the
exchange rate of currencies. The principal amount of any Indebtedness Incurred
to refinance other Indebtedness, if Incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on the currency
exchange rate applicable to the currencies in which such Refinancing
Indebtedness is denominated that is in effect on the date of such refinancing.


 


SECTION 6.07              Limitation on Lines of
Business


 


The
Company shall not, and shall not permit any Restricted Subsidiary to, engage in
any business as a primary line of business other than a Related Business.


 


SECTION 6.08              Limitation on Restricted
Payments


 


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


 


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


 


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


 


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


 


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


 


53

















 


(3)           purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations or Guarantor Subordinated Obligations (other than (A) Indebtedness
of the Company owing to and held by any Subsidiary Guarantor or Indebtedness of
a Subsidiary Guarantor owing to and held by the Company or any other Subsidiary
Guarantor permitted under clause (3) of Section 6.06(b) of
this Second Supplemental Indenture or (B) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement of Subordinated
Obligations or Guarantor Subordinated Obligations in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each
case due within one year of the date of purchase, repurchase, redemption,
defeasance or other acquisition or retirement); or


 


(4)           make any Restricted
Investment in any Person;


 


(any
such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Restricted Investment referred to in clauses (1) through
(4) above shall be referred to herein as a “Restricted
Payment”), if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment:


 


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


 


(B)           the Company is not able to
Incur $1.00 of additional Indebtedness pursuant to Section 6.06(a) of
this Second Supplemental Indenture after giving effect, on a pro forma basis,
to such Restricted Payment as if such Restricted Payment and the use of
proceeds thereof had been made at the beginning of the applicable four-quarter
period; or


 


(C)           the aggregate amount of such
Restricted Payment and all other Restricted Payments declared or made
subsequent to the Start Date (except as excluded by other provisions of this Section 6.08)
would exceed the sum of (all such calculations being made as if this covenant
had been in effect as of the Start Date and at all times thereafter):


 


(i)            50% of Consolidated Net
Income for the period (treated as one accounting period) from the beginning of
the fiscal quarter prior to the quarter in which the Start Date occurred to the
end of the most recent fiscal quarter ending prior to the date of such
Restricted Payment for which financial statements are in existence (or, in case
such Consolidated Net Income is a deficit, minus 100% of such deficit); plus


 


(ii)           100% of the aggregate fair
market value of Qualified Proceeds received by the Company or any Subsidiary
Guarantor from the issue or sale of its Capital Stock (other than Disqualified
Stock) or other capital contributions subsequent to the Start Date (other than
Qualified Proceeds received from an issuance or sale of such Capital Stock to a
Subsidiary of the Company or an employee stock ownership plan, option 


 


54

















 


plan or similar trust to the extent such sale to an
employee stock ownership plan or similar trust is financed by loans from or
Guaranteed by the Company or any Restricted Subsidiary unless such loans have
been repaid with cash on or prior to the date of determination) excluding in
any event Qualified Proceeds to the extent used as consideration for Permitted
Investments pursuant to clause (17) of the definition of “Permitted
Investments”; plus


 


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


 


(iv)          the amount equal to the net
reduction in Restricted Investments made by the Company or any of its
Restricted Subsidiaries in any Person resulting from:


 


(A)          repurchases or redemptions
of such Restricted Investments by such Person, proceeds realized upon the sale
of such Restricted Investment to an unaffiliated purchaser, repayments of loans
or advances or other transfers of assets (including by way of dividend or
distribution) by such Person to the Company or any Restricted Subsidiary (other
than for reimbursement of tax payments) and to the extent not otherwise already
included releases or reductions of Guarantees; or


 


(B)           the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries or the merger or
consolidation of an Unrestricted Subsidiary with and into the Company or any of
its Restricted Subsidiaries (valued in each case as provided in the definition
of “Investment”) not to exceed the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary,


 


which
amount in each case under this clause (iv) was included in the
calculation of the amount of Restricted Payments; provided,
however, that no amount shall be included under this clause (iv) to
the extent it is already included in Consolidated Net Income.


 


(b)           The provisions of Section 6.08(a) of
this Second Supplemental Indenture shall not prohibit:


 


(1)           any purchase, repurchase,
redemption, defeasance or other acquisition or retirement of Capital Stock,
Disqualified Stock or Subordinated Obligations of the Company or Guarantor
Subordinated Obligations of any Subsidiary Guarantor made by 


 


55

















 


conversion into or exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary or an employee stock ownership plan or similar trust to the extent
such sale to an employee stock ownership plan or similar trust is financed by
loans from or Guaranteed by the Company or any Restricted Subsidiary unless
such loans have been repaid with cash on or prior to the date of
determination); provided, however, that the
amount of such Restricted Payments shall be excluded in subsequent calculations
of the amount of Restricted Payments; provided, further,
that the Qualified Proceeds from such sale of Capital Stock (to the extent so
used) shall be excluded from clause (C)(ii) of Section 6.08(a) of
this Second Supplemental Indenture;


 


(2)           any purchase, repurchase,
redemption, defeasance or other acquisition or retirement of Subordinated
Obligations of the Company or Guarantor Subordinated Obligations of any
Subsidiary Guarantor made by exchange for, or out of the proceeds of the
substantially concurrent sale or Incurrence of, Subordinated Obligations of the
Company or any purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Guarantor Subordinated Obligations made by
exchange for or out of the proceeds of the substantially concurrent sale or
Incurrence of Guarantor Subordinated Obligations that, in each case, is
permitted to be Incurred pursuant to Section 6.06 of this Second
Supplemental Indenture and that, if Incurred under Section 6.06(b) of
this Second Supplemental Indenture, in each case constitutes Refinancing
Indebtedness; provided, however, that the
amount of such Restricted Payments shall be excluded in subsequent calculations
of the amount of Restricted Payments;


 


(3)           any purchase, repurchase,
redemption, defeasance or other acquisition or retirement of Disqualified Stock
of the Company or a Restricted Subsidiary made by exchange for or out of the
proceeds of the substantially concurrent sale of Disqualified Stock of the
Company or such Restricted Subsidiary, as the case may be, that, in each case,
is permitted to be Incurred pursuant to Section 6.06 of this Second
Supplemental Indenture and that in each case constitutes Refinancing
Indebtedness; provided, however, that the
amount of such Restricted Payments shall be excluded in subsequent calculations
of the amount of Restricted Payments;


 


(4)           dividends paid within 60
days after the date of declaration if at such date of declaration such dividend
would have complied with this provision; provided, however,
that from and after the date of payment thereof the amount of such Restricted
Payments shall be included in subsequent calculations of the amount of
Restricted Payments;


 


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


 


(A)          the repurchase, redemption
or other acquisition or retirement for value of Capital Stock of the Company or
any direct or indirect parent of the Company held by any existing or former
employees or directors of the Company or any Subsidiary of the Company or their
assigns, estates or heirs, in each case in connection with the repurchase
provisions under employee stock option or stock purchase agreements or other
compensation-related agreements; provided that 


 


56

















 


such Capital Stock was received for services related
to, or for the benefit of, the Company and its Subsidiaries; and provided further that such repurchases, redemptions,
acquisitions and retirements pursuant to this clause shall not exceed $2.0
million in the aggregate during any calendar year and $5.0 million in the
aggregate for all such redemptions and repurchases, plus in each case, to the
extent not previously applied, the amount of any capital contributions to the
Company as a result of sales of Capital Stock of the Company or any direct or
indirect parent of the Company to such Persons (provided,
however, that the Qualified Proceeds from such sale of Capital Stock
(to the extent so used) shall be excluded from clause (C)(ii) of
Section 6.08(a) of this Second Supplemental Indenture), plus
the amount of any “key man” insurance proceeds received by the Company or any
Restricted Subsidiary to the extent not previously applied; and


 


(B)           loans or advances to, and
Guarantees of obligations of, employees, officers or directors of the Company
or any Subsidiary of the Company the proceeds of which are used to purchase
Capital Stock of the Company or any direct or indirect parent of the Company,
in an aggregate amount not in excess of $2.0 million with respect to all loans
or advances made since the Start Date (without giving effect to the forgiveness
of any such loan); provided, however,
that the Company and its Subsidiaries shall comply in all material respects
with the provisions of the Sarbanes Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith relating to the provision of
any such loans and advances as if the Company had filed a registration
statement with the Commission;


 


provided, however, that the amount of such Restricted Payments
shall be excluded in subsequent calculations of the amount of Restricted
Payments;


 


(6)           so long as no Default or
Event of Default has occurred and is continuing, the declaration and payment of
dividends to holders of any class or series of Disqualified Stock of the Company
issued in accordance with the terms of the Indenture to the extent such
dividends are included in the definition of “Consolidated Interest Expense;” provided, however, that the amount of such Restricted
Payments shall be excluded in subsequent calculations of the amount of
Restricted Payments;


 


(7)           repurchases of Capital Stock
deemed to occur upon the exercise of stock options, warrants or other
convertible securities if such Capital Stock represents a portion of the
exercise price thereof; provided, however,
that the amount of such Restricted Payments shall be excluded in subsequent
calculations of the amount of Restricted Payments;


 


(8)           the purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value of any
Subordinated Obligation or Guarantor Subordinated Obligation (A) at a
purchase price not greater than 101% of the principal amount of such
Subordinated Obligation or Guarantor Subordinated Obligation in the event of a
Change of Control in accordance with provisions similar to Section 6.14
of this Second Supplemental Indenture or (B) at a purchase price not
greater than 100% of the principal


 


57






 












 


amount thereof in accordance with provisions similar
to Section 6.11 of this Second Supplemental Indenture; provided that, prior to or simultaneously with such
purchase, repurchase, redemption, defeasance or other acquisition or
retirement, the Company (or a third party, in the case of a Change of Control
Offer) has made the Change of Control Offer or Asset Disposition Offer, as
applicable, as provided in such covenant with respect to the Notes and has
completed the repurchase of all Notes validly tendered for payment in
connection with such Change of Control Offer or Asset Disposition Offer; provided, however, that the amount of such Restricted
Payments shall be included in subsequent calculations of the amount of
Restricted Payments;


 


(9)           (A) so long as no Event
of Default described under clauses (1) or (2) thereof
has occurred and is continuing, the declaration of dividends to holders of
Common Stock of the Company of up to $10.0 million in the aggregate for all
such dividends and the subsequent payment of such dividends and (B) so
long as no Default or Event of Default has occurred and is continuing, the
declaration of dividends to holders of Common Stock of the Company of up to
$0.36 per share per calendar year (but in no event in excess of $20.0 million
in the aggregate during any calendar year pursuant to this clause (9))
and the subsequent payment of such dividends; provided,
however, that in each case the amount of such Restricted Payments
shall be included in subsequent calculations of the amount of Restricted
Payments;


 


(10)         so long as no Default or
Event of Default has occurred and is continuing, repurchases of Common Stock
pursuant to a previously announced share repurchase program for up to an
aggregate purchase price after the Issue Date of $25.0 million; provided, however, that the amount of such Restricted
Payments shall be included in subsequent calculations of the amount of
Restricted Payments;


 


(11)         for avoidance of doubt,
payments pursuant to any customary tax sharing or tax indemnification arrangement;
provided, however, that the amount of
such payments shall be excluded in subsequent calculations of the amount of
Restricted Payments;


 


(12)         the payment of cash in lieu
of issuance of fractional shares of Capital Stock in connection with any transaction
otherwise permitted under this Section 6.08; provided,
however, that the amount of such Restricted Payments shall be
included in subsequent calculations of the amount of Restricted Payments;


 


(13)         payments to dissenting
stockholders not to exceed $5.0 million (A) pursuant to applicable law or (B) in
connection with the settlement or other satisfaction of legal claims made
pursuant to or in connection with a consolidation, merger or transfer of assets
in connection with a transaction that is not prohibited by the Indenture; provided, however, that such payments shall be included in
subsequent calculations of the amount of Restricted Payments; and


 


(14)         so long as no Default or
Event of Default has occurred and is continuing, Restricted Payments in an
aggregate amount not to exceed $30.0 million; provided,
however, that the amount of such Restricted Payments shall be
included in subsequent calculations of the amount of Restricted Payments.


 


58

















 


The
amount of all Restricted Payments (other than cash) shall be the fair market
value on the date of such Restricted Payment of the asset(s) or securities
proposed to be paid, transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair
market value of any cash Restricted Payment shall be its face amount and any
non-cash Restricted Payment (i) of less than $5.0 million shall be
determined conclusively by an executive officer of the Company acting in good
faith whose certification with respect thereto shall be delivered to the
Trustee or (ii) of $5.0 million or more shall be determined conclusively
by the Board of Directors of the Company acting in good faith whose resolution
with respect thereto shall be delivered to the Trustee, such determination to
be based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if such fair market value is
estimated in good faith by the Board of Directors of the Company to exceed
$25.0 million. Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers’ Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 6.08 were computed, together
with a copy of any fairness opinion or appraisal required by the Indenture.


 


SECTION 6.09              Limitation on Liens


 


The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, Incur or suffer to exist any Lien (other
than Permitted Liens) upon any of its property or assets (including Capital
Stock of Subsidiaries), whether owned on the Issue Date or acquired after that
date, which Lien is securing any Indebtedness, unless contemporaneously with
the Incurrence of such Liens effective provision is made to secure the
Indebtedness due under the Indenture and the Notes and, in respect of Liens on
any Restricted Subsidiary’s property or assets, any Subsidiary Guarantee of
such Restricted Subsidiary, with Liens on such property or assets (1) in
the case of unsubordinated Indebtedness, that rank equally and ratably with, or
senior in priority to, the Liens securing such other Indebtedness, and
(2) in the case of Subordinated Obligations or Guarantor Subordinated
Obligations, that rank senior in priority to the Liens securing such other
Indebtedness, in each case for so long as such other Indebtedness is so
secured.


 


SECTION 6.10              Limitation on Restrictions
on Distributions from Restricted Subsidiaries


 


(a)           The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to:


 


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


 


59

















 


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


 


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


 


(b)           Section 6.10(a) of this Second
Supplemental Indenture shall not prohibit:


 


(1)           any encumbrance or
restriction pursuant to an agreement in effect at or entered into on the Issue
Date, including, without limitation, the Indenture, the Notes and the Senior
Credit Facility (and related documentation) in effect on such date;


 


(2)           any encumbrance or
restriction with respect to a Restricted Subsidiary pursuant to any Capital
Stock or agreement (including an agreement relating to any Capital Stock or
Indebtedness) Incurred by a Restricted Subsidiary on or before the date on
which such Restricted Subsidiary became a Restricted Subsidiary or was merged
with or into or consolidated with or was acquired by the Company or a
Restricted Subsidiary (other than Capital Stock or Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by
the Company or in contemplation of the transaction) and outstanding on such
date provided, that any such encumbrance or
restriction shall not extend to any assets or property of the Company or any
other Restricted Subsidiary other than the assets and property so acquired and
all improvements, additions and accessions thereto and products and proceeds
thereof, and that, in the case of Indebtedness, was permitted to be Incurred
pursuant to the Indenture;


 


(3)           any encumbrance or
restriction with respect to a Restricted Subsidiary pursuant to an agreement
effecting a refunding, replacement or refinancing, in whole or in part, of
Indebtedness Incurred pursuant to an agreement referred to in clause (1) or
(2) of this Section 6.10(b) or this clause (3) or
contained in any amendment, restatement, modification, renewal, supplement,
refunding, replacement or refinancing of an agreement referred to in clause (1) or
(2) of this Section 6.10(b) or this clause (3);
provided, however, that the encumbrances
and restrictions with respect to such Restricted Subsidiary contained in any
such agreement are not materially less favorable, taken as a whole, to the
Holders of the Notes than the encumbrances and restrictions contained in such
agreements referred to in clauses (1) or (2) of
this Section 6.10(b) on the Issue Date or the date such
Restricted Subsidiary became a Restricted Subsidiary or was merged into a
Restricted Subsidiary, whichever is applicable;


 


(4)           in the case of clause (3) of
Section 6.10(a) of this Second Supplemental Indenture,
encumbrances and restrictions in agreements governing Liens permitted to be
incurred under the provisions of Section 6.09 of this Second
Supplemental Indenture;


 


60

















 


(5)           (i) purchase money
obligations for property acquired in the ordinary course of business and (ii) Capitalized
Lease Obligations permitted under the Indenture, in each case, that impose
encumbrances or restrictions of the nature described in clause(3) of
Section 6.10(a) of this Second Supplemental Indenture on the
property so acquired;


 


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


 


(7)           any customary encumbrances
or restrictions imposed pursuant to any agreement constituting a Permitted
Business Investment;


 


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


 


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


 


(10)         encumbrances or restrictions
contained in Credit Facilities, indentures, other debt agreements and Hedging
Obligations Incurred by the Company or any Restricted Subsidiary or Preferred
Stock issued by Restricted Subsidiaries subsequent to the Issue Date and
permitted pursuant to Section 6.06 of this Second Supplemental Indenture;
provided that such encumbrances and
restrictions contained in any such agreement or instrument shall not materially
affect the Company’s ability to make anticipated principal or interest payments
on the Notes (as determined by the Board of Directors of the Company);


 


(11)         customary supermajority
voting provisions and other similar provisions contained in corporate charters,
bylaws, stockholders’ agreements, limited liability company agreements,
partnership agreements, joint venture agreements and other similar agreements;


 


(12)         encumbrances and
restrictions contained in contracts entered into in the ordinary course of
business, not relating to any Indebtedness, and that do not, individually or in
the aggregate, detract from the value of property or assets of the Company or
any Restricted Subsidiary or the ability of the Company or such Restricted
Subsidiary to realize such value, or to make any distributions relating to such
property or assets in each case in any material respect; and


 


(13)         restrictions on the transfer
of property or assets required by any regulatory authority having jurisdiction
over the Company or any Restricted Subsidiary or any of their businesses.


 


61

















 


SECTION 6.11              Limitation on Sales of
Assets and Subsidiary Stock


 


(a)           The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, make any Asset Disposition unless:


 


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


 


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


 


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


 


(A)          to the extent the Company or
any Restricted Subsidiary, as the case may be, elects or is required to do so,
to prepay, repay, redeem, defease or purchase Indebtedness of the Company or a
Restricted Subsidiary (other than Capital Stock, Disqualified Stock,
Subordinated Obligations, Guarantor Subordinated Obligations or Indebtedness
owed to the Company or an Affiliate of the Company) within 330 days from the
later of the date of such Asset Disposition or the receipt of such Net
Available Cash; provided, however, that, in
connection with any prepayment, repayment, redemption, defeasance or purchase
of Indebtedness pursuant to this clause (3)(A), the Company or such
Restricted Subsidiary shall retire such Indebtedness and shall cause the
related commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid, redeemed, defeased or purchased; and


 


(B)           to the extent the Company or
such Restricted Subsidiary elects, to invest in Additional Assets within 330
days from the later of the date of such Asset Disposition or the receipt of
such Net Available Cash;


 


provided that pending the final application of any such Net
Available Cash in accordance with clause (3)(A) or clause (3)(B) of
this Section 6.11(a), the Company and its Restricted Subsidiaries
may temporarily reduce Indebtedness or otherwise invest such Net Available Cash
in any manner not prohibited by the Indenture.


 


Any
Net Available Cash from Asset Dispositions that is not applied or invested as
provided in the preceding paragraph shall be deemed to constitute “Excess
Proceeds.” On the 331st day after an Asset Disposition, if the aggregate amount
of Excess Proceeds exceeds $20.0 million, the Company shall be required to (and
may, in satisfaction of such requirement, at any time prior to such day) make
an offer (an “Asset Disposition Offer”) to
all Holders of Notes and to the extent required by the terms of other Pari
Passu Indebtedness, to all Holders of other Pari Passu Indebtedness outstanding
with similar provisions requiring the Company to make an offer 


 


62

















 


to
purchase such Pari Passu Indebtedness with the proceeds from any Asset
Disposition (“Pari Passu Notes”), to
purchase the maximum principal amount of Notes and any such Pari Passu Notes to
which the Asset Disposition Offer applies that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount of the Notes and Pari Passu Notes plus accrued and unpaid
interest to the date of purchase, in accordance with the procedures set forth
in the Indenture or the agreements governing the Pari Passu Notes, as
applicable, in each case in denominations of $2,000 and larger integral
multiples of $1,000. To the extent that the aggregate amount of Notes and Pari
Passu Notes so validly tendered and not properly withdrawn pursuant to an Asset
Disposition Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for general corporate purposes, subject to other
covenants contained in the Indenture. If the aggregate principal amount of Notes
surrendered by Holders thereof and other Pari Passu Notes surrendered by
Holders or lenders, collectively, exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and Pari Passu Notes to be purchased on a pro
rata basis on the basis of the aggregate principal amount of tendered Notes and
Pari Passu Notes. Upon completion of such Asset Disposition Offer, the amount
of Excess Proceeds shall be reset at zero.


 


(b)           The Asset Disposition Offer shall remain open for a
period of 20 Business Days following its commencement, except to the extent
that a longer period is required by applicable law (the “Asset
Disposition Offer Period”). No later than five Business Days
after the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase Date”),
the Company shall purchase the principal amount of Notes and Pari Passu Notes
required to be purchased pursuant to this Section 6.11 (the “Asset Disposition Offer Amount”) or,
if less than the Asset Disposition Offer Amount has been so validly tendered,
all Notes and Pari Passu Notes validly tendered in response to the Asset
Disposition Offer.


 


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


 


On
or before the Asset Disposition Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Asset Disposition Offer Amount of Notes and Pari Passu Notes or portions of
Notes and Pari Passu Notes so validly tendered and not properly withdrawn
pursuant to the Asset Disposition Offer, or if less than the Asset Disposition
Offer Amount has been validly tendered and not properly withdrawn, all Notes
and Pari Passu Notes so validly tendered and not properly withdrawn, in each
case in integral multiples of $1,000. The Company shall deliver to the Trustee
an Officers’ Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section 6.11
and, in addition, the Company shall deliver all certificates and notes
required, if any, by the agreements governing the Pari Passu Notes. The Company
or the Paying Agent, as the case may be, shall promptly (but in any case not
later than five Business Days after the termination of the Asset Disposition
Offer Period) mail or deliver to each tendering Holder of Notes or Holder or
lender of Pari Passu Notes, as the case may be, an amount equal to the purchase
price of the Notes or Pari Passu Notes so validly tendered and not properly
withdrawn by such Holder or lender, as the case may be, and accepted by the
Company 


 


63

















 


for
purchase, and the Company shall promptly issue a new Note, and the Trustee,
upon delivery of an Officers’ Certificate from the Company, shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal
to any unpurchased portion of the Note surrendered; provided
that each such new Note shall be in a principal amount of $2,000 or a larger
integral multiple of $1,000. In addition, the Company shall take any and all
other actions required by the agreements governing the Pari Passu Notes. Any
Note not so accepted shall be promptly mailed or delivered by the Company to
the Holder thereof. The Company shall publicly announce the results of the
Asset Disposition Offer on the Asset Disposition Purchase Date.


 


(c)           For the purposes of clause (2) of Section 6.11(a) of
this Second Supplemental Indenture only, the following shall be deemed to be
cash:


 


(1)           the release of the Company
and its Restricted Subsidiaries from all liability on Indebtedness (other than
Subordinated Obligations or Disqualified Stock) of the Company or Indebtedness
of a Restricted Subsidiary (other than Guarantor Subordinated Obligations or
Disqualified Stock of any Subsidiary Guarantor) in connection with such Asset
Disposition, whether by assumption and release, satisfaction and discharge, or
otherwise (in which case the Company shall, without further action, be deemed
to have applied such deemed cash to Indebtedness in accordance with clause (3)(A) of
Section 6.11(a) of this Second Supplemental Indenture); and


 


(2)           securities, notes or other
obligations received by the Company or any Restricted Subsidiary from the
transferee that are promptly converted by the Company or such Restricted
Subsidiary into cash or Cash Equivalents.


 


(d)           The Company shall not, and shall not permit any
Restricted Subsidiary to, engage in any Asset Swaps, unless:


 


(1)           at the time of entering into
such Asset Swap and immediately after giving effect to such Asset Swap, no
Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof;


 


(2)           in the event such Asset Swap
involves the transfer by the Company or any Restricted Subsidiary of assets
having an aggregate fair market value, as determined by the Board of Directors
of the Company in good faith, in excess of $10.0 million, the terms of such
Asset Swap have been approved by a majority of the members of the Board of
Directors of the Company; and


 


(3)           in the event such Asset Swap
involves the transfer by the Company or any Restricted Subsidiary of assets
having an aggregate fair market value, as determined by the Board of Directors
of the Company in good faith, in excess of $25.0 million, the terms of such
Asset Swap have been approved by a majority of the independent members of the
Board of Directors of the Company.


 


(e)           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 in connection with the repurchase of Notes
pursuant to this Section 6.11. To the extent that the provisions of



 


64

















 


any securities laws or regulations conflict with
provisions of this Section 6.11, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the Indenture by virtue of any conflict.


 


SECTION 6.12              Limitation on Affiliate
Transactions


 


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


 


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


 


(2)           in the event such Affiliate
Transaction involves an aggregate consideration in excess of $10.0 million, the
terms of such transaction have been approved by a majority of the members of
the Board of Directors of the Company and by a majority of the members of such
Board having no personal stake in such transaction, if any (and such majority
or majorities, as the case may be, determines that such Affiliate Transaction
satisfies the criteria in clause (1) of this Section 6.12(a));
and


 


(3)           in the event such Affiliate
Transaction involves an aggregate consideration in excess of $25.0 million, the
Company has received a written opinion from an independent investment banking,
accounting or appraisal firm of nationally recognized standing that such
Affiliate Transaction is fair to the Company or not materially less favorable
than those that might reasonably have been obtained in a comparable transaction
at such time on an arm’s-length basis from a Person that is not an Affiliate.


 


(b)           Section 6.12(a) of this Second
Supplemental Indenture shall not apply to:


 


(1)           any Restricted Payment
(other than a Restricted Investment) and Permitted Investments (other than
pursuant to clauses (1), (2), (11), (13) and (14)
of the definition of “Permitted Investments”) permitted to be made pursuant to
the Indenture;


 


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


 


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


 


65

















 


(4)           loans or advances to
employees, officers or directors of the Company or any Restricted Subsidiary in
the ordinary course of business in an aggregate amount not in excess of $2.0
million with respect to all loans or advances made since the Issue Date
(without giving effect to the forgiveness of any such loan); provided, however, that the Company and its Subsidiaries
shall comply in all material respects with the provisions of the Sarbanes Oxley
Act of 2002 and the rules and regulations promulgated in connection
therewith relating to the provision of any such loans and advances as if the
Company had filed a registration statement with the Commission;


 


(5)           any transaction between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries and
Guarantees issued by the Company or a Restricted Subsidiary for the benefit of
the Company or a Restricted Subsidiary, as the case may be, in accordance with Section 6.06
of this Second Supplemental Indenture;


 


(6)           the existence of, and the
performance of obligations of the Company or any of its Restricted Subsidiaries
under the terms of any agreement to which the Company or any of its Restricted
Subsidiaries is a party as of or on the Issue Date and identified on Schedule 1
hereto, as these agreements may be amended, modified, supplemented, extended or
renewed from time to time; provided, however,
that any future amendment, modification, supplement, extension or renewal
entered into after the Issue Date shall be permitted to the extent that its
terms, taken as a whole, are not materially more disadvantageous to the Holders
of the Notes than the terms of the agreements in effect on the Issue Date;


 


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


 


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


 


SECTION 6.13              Limitation on Sale of
Capital Stock of Restricted Subsidiaries


 


The
Company shall not, and shall not permit any Restricted Subsidiary to, transfer,
convey, sell, lease or otherwise dispose of any Voting Stock of any Restricted
Subsidiary or, with respect to a Restricted Subsidiary, to issue any of the
Voting Stock of a Restricted Subsidiary (other than, if necessary, shares of its
Voting Stock constituting Foreign Required Minority Shares) to any Person
except:


 


(1)           to the Company or a Wholly
Owned Subsidiary;


 


66

















 


(2)           the granting of Liens
permitted under Section 6.09 of this Second Supplemental Indenture;
and


 


(3)           in compliance with Section 6.11
of this Second Supplemental Indenture and immediately after giving effect to
such issuance or sale, such Restricted Subsidiary would continue to be a
Restricted Subsidiary.


 


Notwithstanding
the preceding paragraph, the Company and its Restricted Subsidiaries may sell
all the Voting Stock of a Restricted Subsidiary as long as the Company or its
Restricted Subsidiaries comply with the terms of Section 6.11 of
this Second Supplemental Indenture.


 


SECTION 6.14              Change of Control


 


If
a Change of Control occurs, unless the Company has exercised its right to
redeem all of the Notes pursuant to Section 7.05 of this Second
Supplemental Indenture, each Holder of Notes shall have the right to require the
Company to repurchase all or any part (equal to $2,000 or larger integral
multiples of $1,000) of such Holder’s Notes at a purchase price in cash equal
to 101% of the principal amount of the Notes plus accrued and unpaid interest,
if any, to the date of purchase (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant Interest
Payment Date).


 


Within
30 days following any Change of Control, unless the Company has given
irrevocable notice that it shall exercise its right to redeem all of the Notes
pursuant to Section 7.05 of this Second Supplemental Indenture, the
Company shall mail a notice (the “Change of Control Offer”)
to each Holder, with a copy to the Trustee, stating:


 


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


 


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


 


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


 


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


 


(1)           accept for
payment all Notes or portions of Notes (of $2,000 or larger integral multiples
of $1,000) properly tendered pursuant to the Change of Control Offer;


 


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


 


67






 


 












 


(3)                                  deliver or
cause to be delivered to the Trustee any definitive Notes so accepted together
with an Officers’ Certificate stating the aggregate principal amount of Notes
or portions of Notes being purchased by the Company.


 


The
Paying Agent shall promptly mail (or cause to be transferred by book entry) to
each Holder of Notes so tendered the Change of Control Payment for such Notes,
and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in a principal
amount of $2,000 or larger integral multiples of $1,000.


 


If
the Change of Control Payment Date is on or after a Regular Record Date and on
or before the related Interest Payment Date, any accrued and unpaid interest,
if any, shall be paid on the relevant Interest Payment Date to the Person in
whose name a Note is registered at the close of business on such Regular Record
Date, and no additional interest shall be payable to Holders who tender
pursuant to the Change of Control Offer.


 


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


 


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 in
connection with the repurchase of Notes pursuant to this Section 6.14.
To the extent that the provisions of any securities laws or regulations
conflict with provisions of the Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached this Section 6.14 by virtue of the conflict.


 


SECTION 6.15                                           Commission
Reports


 


Notwithstanding
that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act,
the Company shall file with the Commission, and make available to the Trustee
and the registered Holders of the Notes, the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe)
that are specified in Sections 13 and 15(d) of the Exchange Act with
respect to U.S. issuers, in each case not later than 60 days after the final
due dates therefor specified therein or in the relevant forms (after giving
effect to any cure period specified therein). For the avoidance of doubt, no
Default shall be deemed to occur under the Indenture with respect to the Notes
until the expiration of such 60-day period.


 


In
the event that the Company is not permitted to file such reports, documents and
information with the Commission pursuant to the Exchange Act, the Company shall
nevertheless make available such Exchange Act information to the Trustee and
the Holders of the Notes as if the Company were subject to the reporting
requirements of Section 13 or 15(d) of the Exchange 


 


68

















 


Act,
in each case not later than 60 days after the final due dates therefor
specified therein or in the relevant forms (after giving effect to any cure
period specified therein). For the avoidance of doubt, no Default shall be
deemed to occur under the Indenture with respect to the Notes until the
expiration of such 60-day period.


 


If
the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
this Section 6.15 shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes to the
financial statements and in Management’s Discussion and Analysis of Results of
Operations and Financial Condition, of the financial condition and results of
operations of the Company and its Restricted Subsidiaries.


 


In
the event that any direct or indirect parent company of the Company becomes a
guarantor of the Notes, the Company may satisfy its obligations under this Section 6.15
by furnishing financial information relating to such parent; provided that (a) such financial statements are
accompanied by consolidating financial information for such parent, the Company,
the Subsidiary Guarantors and the Subsidiaries of the Company that are not
Subsidiary Guarantors in the manner prescribed by the Commission and (b) such
parent is not engaged in any business in any material respect other than
incidental to its ownership, directly or indirectly, of the Capital Stock of
the Company.


 


Pursuant
to Section 3.02(5)(a) of this Second Supplemental Indenture, a
Default under this Section 6.15 is subject to a 180-day cure
period. During such cure period, the interest rate on the Notes shall increase
by the Additional Interest.


 


SECTION 6.16                                           Future
Subsidiary Guarantors


 


After
the Issue Date, the Company shall cause each Restricted Subsidiary (other than
a Foreign Subsidiary) that Guarantees any Indebtedness of the Company or any
Subsidiary Guarantor to execute and deliver to the Trustee a Subsidiary
Guarantee pursuant to which such Subsidiary Guarantor shall unconditionally
Guarantee, on a joint and several basis, the full and prompt payment of the
principal of, premium, if any and interest on the Notes on a senior basis.


 


ARTICLE SEVEN

REDEMPTION OF NOTES


 


SECTION 7.01                                           Original
Indenture


 


Sections
1103, 1106 and 1108 of the Original Indenture shall not apply to the Notes;
and, insofar as relating to the Notes, any reference in the Original Indenture
to Sections 1103, 1106 or 1108 thereof shall be deemed to refer to Sections 7.02,
7.03 or 7.04, respectively, of this Second Supplemental
Indenture.


 


SECTION 7.02                                           Selection by
Trustee of Notes to Be Redeemed


 


If
less than all the Notes are to be redeemed at any time pursuant to an optional
redemption, the particular Notes to be redeemed shall be selected not more than
60 days prior to the Redemption Date by the Trustee, from the outstanding Notes
not previously called for 


 


69

















 


redemption,
in compliance with the requirements of the principal national securities
exchange, if any, on which such Notes are listed, or, if such Notes are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem fair and appropriate (and in such manner as
complies with applicable legal requirements) and which may provide for the
selection for redemption of portions of the principal of the Notes; provided, however, that no such partial redemption shall
reduce the portion of the principal amount of a Note not redeemed to less than
$2,000.


 


The
Trustee shall promptly notify the Company in writing of the Notes selected for
redemption as aforesaid and, in case of any Notes selected for partial
redemption as aforesaid, the principal amount thereof to be redeemed.


 


For
all purposes of the Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Notes shall relate, in the case of any
Notes redeemed or to be redeemed only in part, to the portion of the principal
amount of such Notes which has been or is to be redeemed. If the Company shall
so direct, Notes registered in the name of the Company, any Affiliate or any
Subsidiary thereof shall not be included in the Notes selected for redemption.


 


SECTION 7.03                                           Notes Payable
on Redemption Date


 


Notice
of redemption having been given as aforesaid, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price, together with accrued interest to (but excluding) the
Redemption Date; provided, however, that, if the
Redemption Date is on or after a Regular Record Date and on or before the
related Interest Payment Date, the accrued and unpaid interest, if any, shall
be paid to the Person in whose name the Note is registered at the close of
business on such Regular Record Date, and no additional interest shall be
payable to Holders whose Notes shall be subject to redemption by the Company.


 


If
any Note called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and any premium shall, until paid, bear interest from
the Redemption Date at the rate prescribed therefor in the Note.


 


SECTION 7.04                                           Other Mandatory
Redemption


 


The
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes. Under certain circumstances, the Company may be
required to offer to purchase Notes as described under Sections 6.11
and 6.14. The Company may, at any time and from time to time, purchase
Notes in the open market or otherwise.


 


SECTION 7.05                                           Optional
Redemption


 


(a)                                  Except as described in subsections (b),
(c), and (d) below, the Notes are not redeemable at the
option of the Company prior to maturity.


 


70

















 


(b)                                 On and after
November 1, 2015, the Company may redeem all or, from time to time, a part
of the Notes upon not less than 30 nor more than 60 days’ notice, at the
following Redemption Prices (expressed as a percentage of principal amount of
Notes to be redeemed), plus accrued and unpaid interest, if any, to the
applicable Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on the relevant Interest
Payment Date), if redeemed during the 12-month period beginning on
November 1 of the years indicated below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2015

  	
   

  	
  103.375

  	
  %

  
	
  2016

  	
   

  	
  102.250

  	
  %

  
	
  2017

  	
   

  	
  101.125

  	
  %

  
	
  2018 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


(c)                                  Prior to November 1,
2013, the Company may, at its option, on any one or more occasions redeem up to
35% of the aggregate principal amount of the Notes (including Additional Notes)
issued under the Indenture upon not less than 30 nor more than 60 days’
notice with the Net Cash Proceeds of one or more Equity Offerings at a
Redemption Price of 106.750% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant Regular Record Date to receive interest due on the
relevant Interest Payment Date); provided that


 


(1)                                  at least 65% of
the aggregate principal amount of the Notes (including Additional Notes) issued
under the Indenture remains outstanding after each such redemption; and


 


(2)                                  the redemption
occurs within 90 days after the closing of the related Equity Offering.


 


(d)                                 Prior to November 1,
2015, the Notes may be redeemed, in whole or in part, at any time at the option
of the Company upon not less than 30 nor more than 60 days’ prior notice mailed
by first-class mail to each Holder of Notes at its registered address, at a
Redemption Price equal to 100% of the principal amount of the Notes redeemed
plus the Applicable Premium plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on the relevant Interest Payment
Date).


 


ARTICLE EIGHT

DEFEASANCE AND COVENANT DEFEASANCE

WITH RESPECT TO THE NOTES


 


SECTION 8.01                                           Original
Indenture


 


Article Twelve
of the Original Indenture shall not apply to the Notes.


 


71

















 


SECTION 8.02                                           Discharge of
Liability on Notes; Defeasance


 


(a)                                  Subject to Sections 8.02(b) and
8.03 of this Second Supplemental Indenture, the Company at any time may
terminate (i) all its obligations under the Notes and the Indenture and
all obligations of the Subsidiary Guarantors under the Subsidiary Guarantees
and the Indenture (“legal defeasance”), and after
giving effect to such legal defeasance, any omission to comply with such
obligations shall no longer constitute a Default or Event of Default or (ii) its
obligations under clause (3) of Section 4.02 of
this Second Supplemental Indenture and Sections 6.06, 6.07, 6.08,
6.09, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15,
or 6.16 of this Second Supplemental Indenture and Section 1006 of
the Original Indenture and the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply with such covenants shall no longer constitute a Default or
an Event of Default under clauses (3), (4) and (5) of
Section 3.02 of this Second Supplemental Indenture and the
operation of clauses (6), (7) (but only with respect to
a Significant Subsidiary or group of Restricted Subsidiaries that would
constitute a Significant Subsidiary), (8) and (9) of Section 3.02
of this Second Supplemental Indenture, and the events specified in such
Sections shall no longer constitute an Event of Default (clause (ii) being
referred to as the “covenant defeasance”), but
except as specified above, the remainder of the Indenture and the Notes shall
be unaffected thereby. 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 Notes may not
be accelerated because of an Event of Default with respect to the Notes, and
the Subsidiary Guarantees in effect at such time shall terminate. If the
Company exercises its covenant defeasance option, payment of the Notes may not
be accelerated because of an Event of Default specified in clauses (3) (as
such clause relates to Section 4.02(3)), (4) (as such
clause relates to Sections 6.06, 6.07, 6.08, 6.09,
6.10, 6.11, 6.12, 6.13, 6.14, or 6.16
of this Second Supplemental Indenture), (5), (6), (7) (but
only with respect to a Significant Subsidiary or group of Restricted
Subsidiaries that would constitute a Significant Subsidiary), (8) and
(9) of Section 3.02 of this Second Supplemental
Indenture.


 


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.


 


(b)                                 Notwithstanding the
provisions of Article Four of the Original Indenture and Section 8.02(a) of
this Second Supplemental Indenture, following legal defeasance the Company’s
obligations in Sections 304, 305, 306, 309, 607, 608, 1001 (to the extent of
the legal defeasance trust), 1002 and 1003 of the Original Indenture and Sections 6.03
and 6.04 and Article Eight of this Second Supplemental
Indenture shall survive until the Notes have been paid in full. Thereafter, the
Company’s obligations in Sections 607 of the Original Indenture and Sections 8.04,
8.06 and 8.07 of this Second Supplemental Indenture shall
survive.


 


72

















 


SECTION 8.03                                           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 for the benefit of the Holders money in U.S.
dollars or U.S. Government Obligations or a combination thereof for the payment
of principal, premium, if any, and interest on the Notes to 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 (or if nationally recognized independent
accounting firms no longer routinely express such opinions, a certificate from
the chief financial officer of the Company expressing his or her opinion) that
the payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment shall provide cash at such times and in such amounts as shall be
sufficient to pay principal, premium, if any, and interest when due on all the
Notes to maturity;


 


(c)                                  no Default or Event of
Default shall have occurred and be continuing on the date of such deposit
(other than Defaults and Events of Default arising out of the incurrence of
Indebtedness used to fund such deposit) or, with respect to the Company under clause (7) of
Section 3.02 of this Second Supplemental Indenture, on the 123rd
day after such date of deposit;


 


(d)                                 such legal defeasance or
covenant defeasance shall not result in a breach or violation of, or constitute
a Default under, the Indenture or any other material agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound;


 


(e)                                  the Company shall have
delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) to the effect that, assuming no intervening
bankruptcy of the Company between the date of deposit and the 123rd day
following the deposit and that no Holder of the Notes is an insider of the
Company within the meaning of the Bankruptcy Law, after the 123rd day following
the deposit, the trust funds shall not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ right generally;


 


(f)                                    the Company delivers to the
Trustee an Opinion of Counsel (subject to customary assumptions and exclusions)
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;


 


(g)                                 in the case of legal
defeasance, the Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary assumptions and exclusions) in the United States
stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the
date of this Second Supplemental Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders shall not
recognize 


 


73

















 


income, gain or loss for Federal income tax purposes
as a result of such defeasance and shall be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such legal defeasance had not occurred;


 


(h)                                 in the case of covenant
defeasance, the Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary exceptions and exclusions) in the United States
to the effect that the Holders shall not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and covenant defeasance
and shall be subject to Federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such deposit and
covenant defeasance had not occurred; and


 


(i)                                     the Company delivers to the
Trustee an Officers’ Certificate and an Opinion of Counsel, together stating
that all conditions precedent to the defeasance and discharge of the Notes and
the Indenture as contemplated by this Article Eight have been
complied with.


 


SECTION 8.04                                           Application of
Trust Money


 


The
Trustee shall hold in trust money or U.S. Government Obligations deposited with
it pursuant to this Article Eight. It shall apply the deposited
money and the money from U.S. Government Obligations through the Paying Agent
and in accordance with the Indenture to the payment of principal of and
interest on the Notes.


 


SECTION 8.05                                           Repayment to
Company


 


The
Trustee and the Paying Agent shall promptly turn over to the Company upon
request any excess money, U.S. Government Obligations or securities held by
them upon payment of all the obligations under the Indenture.


 


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 of or interest on the Notes that remains unclaimed for two years,
and, thereafter, Holders entitled to the money must look to the Company for
payment as general creditors.


 


SECTION 8.06                                           Indemnity for
U.S. Government Obligations


 


The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.


 


SECTION 8.07                                           Reinstatement


 


If
the Trustee or Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with this Article Eight by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the obligations of the Company and the Subsidiary Guarantors under
the Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Eight until such time
as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this 


 


74

















 


Article Eight; provided, however, that, if the Company has made any payment
of interest on or principal of any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.


 


ARTICLE NINE

SUBSIDIARY GUARANTEE


 


SECTION 9.01                                           Subsidiary
Guarantee


 


Each
Subsidiary Guarantor hereby fully, unconditionally and irrevocably guarantees,
as primary obligor and not merely as surety, jointly and severally with each
other Subsidiary Guarantor, to each Holder of the Notes and the Trustee the
full and punctual payment when due, whether at maturity, by acceleration, by
redemption or otherwise, of the principal of, premium, if any, and interest on
the Notes and all other monetary obligations of the Company under the Indenture
(all the foregoing being hereinafter collectively called the “Obligations”). Each Subsidiary
Guarantor further agrees (to the extent permitted by law) that the Obligations
may be extended or renewed, in whole or in part, without notice or further
assent from it, and that it shall remain bound under this Article Nine
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
Notes or the Obligations. The obligations of each Subsidiary Guarantor
hereunder shall not be affected by (a) the failure of any Holder to assert
any claim or demand or to enforce any right or remedy against the Company or
any other Person under the Indenture, the Notes or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any
rescission, waiver, amendment or modification of any of the terms or provisions
of the Indenture, the Notes or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Obligations or any of them; (e) the
failure of any Holder to exercise any right or remedy against any other
Subsidiary Guarantor; or (f) any change in the ownership of the Company.


 


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


 


Except
as expressly set forth in Sections 8.02(a), 9.02 and 9.03
of this Second Supplemental Indenture, the obligations of each Subsidiary
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than payment of the Obligations
in full), including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the 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 to assert any claim or demand or to enforce any remedy under the
Indenture, the Notes or any other agreement, by any waiver or modification of
any thereof, by 


 


75

















 


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
any 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 or interest on any of the
Obligations is rescinded or must otherwise be restored by any Holder 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 has at law or in equity against any Subsidiary Guarantor by virtue
hereof, upon the failure of the Company to pay any of the Obligations when and
as the same shall become due, whether at maturity, by acceleration, by redemption
or otherwise, each Subsidiary Guarantor hereby promises to and shall, upon
receipt of written demand by the Trustee, forthwith pay, or cause to be paid,
in cash, to the Holders an amount equal to the sum of (i) the unpaid
amount of such Obligations then due and owing and (ii) accrued and unpaid
interest on such Obligations then due and owing (but only to the extent not
prohibited by law) and except as provided in Section 9.03 of this
Second Supplemental Indenture.


 


Each
Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor,
on the one hand, and the Holders, on the other hand, (x) the maturity of
the Obligations guaranteed hereby may be accelerated as provided in the
Indenture for the purposes of its Subsidiary Guarantee herein, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby and (y) in the event of any
such declaration of acceleration of such Obligations, such Obligations (whether
or not due and payable) shall forthwith become due and payable by the
Subsidiary Guarantor for the purposes of this Subsidiary Guarantee.


 


Each
Subsidiary Guarantor also agrees to pay any and all reasonable costs and
expenses (including reasonable attorneys’ fees) incurred by the Trustee or the
Holders in enforcing any rights under this Section 9.01.


 


SECTION 9.02                                           Termination,
Release and Discharge


 


(a)                                  Subject to Section 6.11
and Article Four of this Second Supplemental Indenture, each
Subsidiary Guarantor may consolidate with or merge into or sell all or
substantially all of its property and assets to the Company, another Subsidiary
Guarantor or a Person other than the Company or another Subsidiary Guarantor
(whether or not Affiliated with the Subsidiary Guarantor).


 


(b)                                 Notwithstanding the
foregoing and the other provisions of the Indenture, in the event a Subsidiary
Guarantor is sold or disposed of (whether by merger, consolidation, the sale of
its Capital Stock or the sale of all or substantially all of its assets (other
than by lease) and whether or not the Subsidiary Guarantor is the surviving
corporation in such transaction) to a Person which is not the Company or a
Restricted Subsidiary, such Subsidiary Guarantor shall be released from its
obligations under its Subsidiary Guarantee if:


 


76

















 


(1)                                  the sale or
other disposition is in compliance with the Indenture, including Section 6.11
of this Second Supplemental Indenture (it being understood that only such
portion of the Net Available Cash as is required to be applied on or before the
date of such release in accordance with the terms of the Indenture needs to be
applied in accordance therewith at such time), Section 6.13 and Article Four
of this Second Supplemental Indenture; and


 


(2)                                  all the
obligations of such Subsidiary Guarantor under all Indebtedness of the Company
and all Subsidiary Guarantors terminate upon consummation of such transaction.


 


(c)                                  A Subsidiary Guarantor shall
be deemed released and relieved of its obligations under the Indenture and its
Subsidiary Guarantee without any further action required on the part of the
Company or such Subsidiary Guarantor upon the designation of such Subsidiary
Guarantor as an Unrestricted Subsidiary in accordance with the terms of the
Indenture or in connection with any legal defeasance of the Notes or upon
satisfaction and discharge of the Indenture, each in accordance with the
provisions of the Indenture.


 


SECTION 9.03                                           Limitation of
Subsidiary Guarantors’ Liability


 


Each
Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby confirms
that it is the intention of all such parties that the guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar Federal or state law. To effectuate the foregoing intention, the
Holders and each Subsidiary Guarantor hereby irrevocably agree that the
obligations of each Subsidiary Guarantor shall be limited to the maximum amount
as shall, after giving effect to all other contingent and fixed liabilities of
such Subsidiary Guarantor (including, without limitation, any guarantees under
the Senior Credit Facility) and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Subsidiary
Guarantee or pursuant to Section 9.04 of this Second Supplemental
Indenture, result in the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under Federal or state law. This Section 9.03 is for the
benefit of the creditors of each Subsidiary Guarantor.


 


SECTION 9.04                                           Contribution


 


In
order to provide for just and equitable contribution among the Subsidiary
Guarantors, the Subsidiary Guarantors agree, that in the event any payment or
distribution is made by any Subsidiary Guarantor (a “Funding Guarantor”) under
its Subsidiary Guarantee, such Funding Guarantor shall be entitled to a
contribution from each other Subsidiary Guarantor (if any) in a pro rata amount
based on the Adjusted Net Assets of each Subsidiary Guarantor (including the
Funding Guarantor) for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company’s obligations with respect to the
Notes or any other Subsidiary Guarantor’s obligations with respect to its
Subsidiary Guarantee.


 


77
















 


ARTICLE TEN

MISCELLANEOUS PROVISIONS WITH RESPECT TO THE NOTES


 


SECTION 10.01                                     Effect of
Headings and Table of Contents


 


The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.


 


SECTION 10.02                                     Successors and
Assigns


 


All
covenants and agreements in this Second Supplemental Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.


 


SECTION 10.03                                     Separability
Clause.


 


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


 


SECTION 10.04                                     Governing Law


 


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


 


SECTION 10.05                                     No Adverse
Interpretation of Other Agreements


 


This
Second Supplemental Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person, other than the Original Indenture. Other than the Original Indenture,
no such indenture, loan or debt agreement may be used to interpret this Second
Supplemental Indenture.


 


SECTION 10.06                                     Counterparts


 


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


 


SECTION 10.07                                     Notices


 


Section 105(2) of
the Original Indenture is amended by deleting the words “Chief Financial
Officer” therefrom and replacing them with the words “Corporate Secretary”.


 


SECTION 10.08                                     Effect on Other
Securities


 


The
provisions of this Second Supplemental Indenture shall apply to the Notes and
not to any other class or series of Securities issued under the Original
Indenture, except as expressly set forth in the supplemental indenture or other
instrument establishing the terms thereof.


 


78

















 


[Signature page follows]


 


79

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed, all as of the day and year first above written.


 


	
   

  	
  BERRY
  PETROLEUM COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David D. Wolf

  
	
   

  	
  Name:
  David D. Wolf

  
	
   

  	
  Title:
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Maddy Hall

  
	
   

  	
  Name:
  Maddy Hall

  
	
   

  	
  Title:
  Vice President

  



 


80

















 


EXHIBIT A


 


[FORM OF FACE OF NOTE]


 


[Global Legend and Depository Legend, if applicable]


 


	
  No. [     ]

  	
  Principal
  Amount $[     ]

  
	
   

  	
   

  
	
  CUSIP
  NO. [    ]

  	
   

  



 


BERRY PETROLEUM COMPANY


 


63⁄4% Senior Notes due 2020


 


BERRY
PETROLEUM COMPANY, a Delaware corporation, promises to pay to [                       ]
or registered assigns, the principal sum of [                       ]
Dollars or such greater or lesser amount as may be indicated on Schedule A
hereto on November 1, 2020.


 


	
  Interest
  Payment Dates:

  	
  May 1
  and November 1, commencing May 1, 2011

  
	
   

  	
   

  
	
  Regular
  Record Dates:

  	
  April 15
  and October 15

  



 


Additional
provisions of this Note are set forth on the other side of this Note.


 


	
  Date:
  [                  ]

  	
   

  
	
   

  	
   

  
	
   

  	
  BERRY
  PETROLEUM COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


 


	
  TRUSTEE’S
  CERTIFICATE OF AUTHENTICATION

  WELLS
  FARGO BANK, NATIONAL ASSOCIATION

  as
  Trustee, certifies that this is one of

  the
  Securities of the series designated therein referred

  to
  in the within-mentioned Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  



 


A-1

















 


[FORM OF REVERSE SIDE OF NOTE]


 


63⁄4% Senior Notes due 2020


 


1.                                       Interest


 


BERRY
PETROLEUM COMPANY, a Delaware corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called
the “Company”), promises to pay interest
on the principal amount of this Note at the rate per annum shown above.


 


The
Company will pay interest semiannually on May 1 and November 1 of each
year, commencing May 1, 2011. Interest on this Note will accrue from the
most recent date to which interest has been paid on this Note or, if no
interest has been paid, from November 1, 2010. The Company shall pay
interest on overdue principal or premium, if any (plus interest on such
interest to the extent lawful), at the rate borne by the Notes to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve
30-day months.


 


If
the Company shall fail to comply with Section 6.15 of the Second
Supplemental Indenture for 180 days, the annual interest rate borne by the
Notes shall be increased from the rate shown above by 0.50% per annum until
such Default is cured or waived.


 


2.                                       Method of
Payment


 


By
no later than 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Note is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to
pay such principal, premium, if any, and/or interest. The Company will pay
interest (except Defaulted Interest) to the Persons who are registered Holders
of Notes at the close of business on the April 15 or October 15 next
preceding the Interest Payment Date even if Notes are cancelled, repurchased or
redeemed after the Regular Record Date and on or before the Interest Payment
Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of Notes represented by a Global Security
(including principal, premium, if any, and interest) will be made by the
transfer of immediately available funds to the accounts specified by The Depository
Trust Company. The Company shall make all payments in respect of a Definitive
Security (including principal, premium, if any, and interest) at the office or
agency of the Company maintained for such purpose in The City of New York, if
any, or at such other office or agency of the Company as may be maintained for
such purpose pursuant to the Indenture; 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.


 


3.                                       Paying Agent
and Registrar


 


Initially,
Wells Fargo Bank, National Association will act as Trustee, Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar 


 


A-2

















 


without
notice to any Holder. The Company or any of its Subsidiaries may act as Paying
Agent, Registrar or co-registrar.


 


4.                                       Indenture


 


The
Company issued the Notes under an Indenture dated as of June 15, 2006 (the
“Original Indenture”), between the
Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by the
Second Supplemental Indenture dated as of November 1, 2010 (the “Second Supplemental Indenture” and,
together with the Original Indenture, as it may be further amended or
supplemented from time to time in accordance with the terms thereof with
application to the Notes, the “Indenture”)
between the Company and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S.C.§§ 77aaa-77bbbb) as in effect on the
date of the Indenture (the “Trust Indenture Act”;
provided, however, that in the event the
Trust Indenture Act is amended after such date, “Trust Indenture Act” shall
mean, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended). Capitalized terms used herein and not defined herein have
the meanings ascribed thereto in the Indenture. The Notes are subject to all
such terms, and Holders are referred to the Indenture and the Trust Indenture
Act for a statement of those terms.


 


The
Notes are general unsecured senior obligations of the Company. The aggregate
principal amount of securities that may be authenticated and delivered under
the Indenture is unlimited. This Note is one of the 63⁄4% Senior Notes due 2020
referred to in the Indenture (the “Notes”).
The Notes include (i) $300,000,000 aggregate principal amount of the Notes
issued under the Indenture on November 1, 2010 and (ii) if and when
issued, additional Notes that may be issued from time to time under the Indenture
subsequent to November 1, 2010 (herein called “Additional
Notes”). The Notes and any Additional Notes will be treated as a
single class of securities under the Indenture.


 


5.                                       Reserved


 


6.                                       Subsidiary
Guarantees


 


This
Note is guaranteed by the Persons, if any, specified as Subsidiary Guarantors
in the Indenture to the extent provided in the Indenture.


 


7.                                       Optional
Redemption


 


Except
as described below, the Notes are not redeemable at the option of the Company
prior to maturity.


 


(a)                                  On and after November 1,
2015, the Company may redeem all or, from time to time, a part of the Notes
upon not less than 30 nor more than 60 days’ notice, at the following
Redemption Prices (expressed as a percentage of principal amount of Notes to be
redeemed), plus accrued and unpaid interest, if any, to the applicable
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on the relevant Interest Payment
Date), if redeemed during the 12-month period beginning on November 1 of
the years indicated below:


 


A-3

















 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2015

  	
   

  	
  103.375

  	
  %

  
	
  2016

  	
   

  	
  102.250

  	
  %

  
	
  2017

  	
   

  	
  101.125

  	
  %

  
	
  2018 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


(b)                                 Prior to November 1,
2013, the Company may, at its option, on any one or more occasions redeem up to
35% of the aggregate principal amount of the Notes (including Additional Notes)
issued under the Indenture upon not less than 30 nor more than 60 days’
notice with the Net Cash Proceeds of one or more Equity Offerings at a
Redemption Price of 106.750% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date to receive interest due
on the relevant Interest Payment Date); provided that


 


(1)                                  at least 65% of
the aggregate principal amount of the Notes (including Additional Notes) issued
under the Indenture remains outstanding after each such redemption; and


 


(2)                                  the redemption
occurs within 90 days after the closing of the related Equity Offering.


 


(c)                                  Prior to November 1,
2015, the Notes may be redeemed, in whole or in part, at any time at the option
of the Company upon not less than 30 nor more than 60 days’ prior notice mailed
by first-class mail to each Holder of Notes at its registered address, at a
Redemption Price equal to 100% of the principal amount of the Notes redeemed
plus the Applicable Premium plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on the relevant Interest Payment
Date).


 


8.                                       Repurchase
Provisions


 


(a)                                  If a Change of
Control occurs, each Holder of Notes will have the right to require the Company
to repurchase all or any part (equal to $2,000 or a larger integral multiple
thereof) of the Notes of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on the relevant Interest
Payment Date) as provided in, and subject to the terms of, the Indenture.


 


(b)                                 In the event of
an Asset Disposition that requires the purchase of Notes pursuant to Section 6.11
of the Second Supplemental Indenture, the Company will be required to apply
such Excess Proceeds to the repayment of the Notes and any Pari Passu Notes in
accordance with the procedures set forth in Section 6.11 of the Second
Supplemental Indenture.


 


9.                                       Denominations;
Transfer; Exchange


 


The
Notes are in registered form without coupons in denominations of principal
amount of $2,000 and larger integral multiples of $1,000. A Holder may transfer
or exchange Notes in 


 


A-4

















 


accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements or transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange of any Note for a period beginning (i) 15
days before the selection of Notes to be repurchased or redeemed and ending at
the close of business on the day of such selection (except, in the case of
Notes to be redeemed in part, the portion of the Note not to be redeemed) or (ii) 15
days before an Interest Payment Date and ending on such Interest Payment Date.


 


10.                                 Persons Deemed
Owners


 


The
registered Holder of this Note may be treated as the owner of it for all
purposes.


 


11.                                 Unclaimed Money


 


If
money for the payment of principal or interest remains unclaimed for two years,
the Trustee or Paying Agent shall pay the money back to the Company at its
request unless an abandoned property law designates another Person. After any
such payment, Holders entitled to the money must look only to the Company and
not to the Trustee for payment.


 


12.                                 Defeasance


 


Subject
to certain conditions set forth in the Indenture, the Company at any time may
terminate some or all of its obligations under the Notes and the Indenture if
the Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Notes to redemption or maturity,
as the case may be.


 


13.                                 Amendment,
Supplement, Waiver


 


Subject
to certain exceptions set forth in the Indenture, (i) the Indenture and
the Notes may be amended or supplemented by the Company, any Subsidiary
Guarantors and the Trustee with the written consent of the Holders of at least
a majority in principal amount of the then outstanding Notes and (ii) any
default (other than with respect to nonpayment or in respect of a provision
that cannot be amended without the written consent of each Holder affected) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Notes.
Subject to certain exceptions set forth in the Indenture, without the consent
of any Holder, the Company, any Subsidiary Guarantors and the Trustee may amend
or supplement the Indenture and the Notes to (each of which are more specially
described in the Indenture): cure any ambiguity, omission, defect or
inconsistency; comply with Article Four of the Second Supplemental
Indenture in respect of the assumption by a Successor Company of the
obligations of the Company or the assumption by a successor Person of the
obligations of any Subsidiary Guarantor under the Indenture; provide for
uncertificated Notes in addition to or in place of certificated Notes; add
Guarantees with respect to the Notes or release a Subsidiary Guarantor from its
obligations under its Subsidiary Guarantee or the Indenture in accordance with
the applicable provisions of the Indenture; secure the Notes; add to the
covenants of the Company for the benefit of the Holders of the Notes or
surrender any right or power conferred upon the Company; make any change that
does not adversely affect the rights of any Holder of Notes; comply with any
requirement of the Commission in connection with the qualification of the
Indenture under the TIA; or conform the 


 


A-5

















 


text
of the Indenture, the Notes or the Subsidiary Guarantees to any provision of
the “Description of notes” contained in the Prospectus Supplement to the extent
that such provision in the “Description of notes” contained in the Prospectus
Supplement is intended to be a verbatim recitation of a provision of the
Indenture, the Notes or the Subsidiary Guarantees.


 


14.                                 Defaults and
Remedies


 


If
an Event of Default (other than an Event of Default relating to specified
bankruptcy covenants) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the outstanding Notes
by notice to the Company and the Trustee, may, and the Trustee at the request
of such Holders will, declare all the Notes to be due and payable immediately,
as provided more fully in the Indenture. If an Event of Default relating to
specified bankruptcy covenants occurs and is continuing, the principal of,
premium, if any, and accrued and unpaid interest on all the Notes will become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders, as provided more fully in the Indenture.


 


Holders
may not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may refuse to enforce the Indenture or the Notes unless it receives
reasonable indemnity or security. Subject to certain limitations, Holders of a
majority in principal amount of the Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice of
any continuing Default or Event of Default (except a Default or Event of Default
in payment of principal or interest) if it determines that withholding notice
is in their interest.


 


15.                                 Trustee
Dealings with the Company


 


Subject
to certain limitations set forth in the Indenture, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
affiliates with the same rights it would have if it were not Trustee.


 


16.                                 No Recourse
Against Others


 


No
director, officer, employee, incorporator or stockholder of the Company or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Company under the Notes, the Indenture or the Subsidiary Guarantees or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.


 


17.                                 Authentication


 


This
Note shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent acting on its behalf) manually signs the certificate of
authentication on the other side of this Note.


 


A-6

















 


18.                                 Abbreviations


 


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


 


19.                                 CUSIP Numbers


 


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


 


20.                                 Governing Law


 


This
Note shall be governed by, and construed in accordance with, the laws of the
State of New York.


 


The
Company will furnish to any Holder upon written request and without charge to
the Holder a copy of the Indenture, which has in it the text of this Note.
Requests may be made to:


 


	
   

  	
  BERRY
  PETROLEUM COMPANY

  	
   

  
	
   

  	
  1999
  Broadway, Suite 3700

  	
   

  
	
   

  	
  Denver
  Colorado 80202

  	
   

  
	
   

  	
  Attention:
  Corporate Secretary

  	
   

  



 


A-7
















 


ASSIGNMENT FORM


 


To
assign this Note, fill in the form below:


 


I
or we assign and transfer this Note to


 


	
   

  	
   

  	
   

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

  
	
   

  
	
   

  	
   

  	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. No.)

  
					



 


and
irrevocably appoint                         
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.


 


 


	
  Date:

  	
   

  	
    Your
  Signature

  	
   

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
   

  	
  (Signature
  must be guaranteed)

  
					



 


Sign
exactly as your name appears on the other side of this Note.


 


The
signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.


 


A-8

















 


[TO BE ATTACHED TO GLOBAL SECURITIES]


 


SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY


 


The following increases or decreases in this Global Security have been
made:


 


	
  Date of 

  Exchange

  	
   

  	
  Amount of decrease in 

  Principal Amount of 

  this Global Security

  	
   

  	
  Amount of increase in 

  Principal Amount of 

  this Global Security

  	
   

  	
  Principal Amount of 

  this Global Security 

  following such 

  decrease or increase

  	
   

  	
  Signature of authorized 

  signatory of Trustee or 

  Securities Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-9

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If
you want to elect to have this Note purchased by the Company pursuant to Section 6.11
or 6.14 of the Second Supplemental Indenture, check either box:


 


	
   

  	
   ̈

  	
   ̈

  
	
   

  	
   

  	
   

  
	
   

  	
  6.11

  	
  6.14

  



 


If
you want to elect to have only part of this Note purchased by the Company
pursuant to Section 6.11 or 6.14 of the Second Supplemental Indenture,
state the amount in principal amount (must be integral multiple of $1,000): $                             


 


	
  Date:

  	
   

  	
     Your
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign
  exactly as your name appears on the other side of the Note)

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
   

  	
  (Signature
  must be guaranteed)

  
					



 


The
signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.


 


A-10

















 


EXHIBIT B


 


FORM OF SUPPLEMENTAL
INDENTURE FOR SUBSIDIARY GUARANTORS


 


This
Supplemental Indenture, dated as of            ,
20   (this “Supplemental Indenture”),
among [name of future Subsidiary Guarantor] (the “Guarantor”),
Berry Petroleum Company (together with its successors and assigns, the “Company”), each other then existing
Subsidiary Guarantor under the Indenture referred to below, and WELLS FARGO
BANK, NATIONAL ASSOCIATION, as Trustee under the Indenture referred to below.


 


W
I T N E S S E T H:


 


WHEREAS,
the Company and the Trustee have heretofore executed and delivered an Indenture
dated as of June 15, 2006 (the “Original Indenture”),
as supplemented by the Second Supplemental Indenture dated as of November 1,
2010 (the “Second Supplemental Indenture,”
together with the Original Indenture, and as further amended, supplemented,
waived or otherwise modified with application to the Notes, the “Indenture”), providing for the
issuance of an unlimited principal amount of the Company’s 63⁄4% Senior Notes due
2020 (the “Notes”);


 


WHEREAS,
Section 6.16 of the Second Supplemental Indenture provides that after the
Issue Date the Company is required to cause each Restricted Subsidiary (other
than a Foreign Subsidiary) that Guarantees any Indebtedness of the Company or
any Subsidiary Guarantor to execute and deliver to the Trustee a supplemental
indenture pursuant to which such Subsidiary Guarantor will unconditionally
Guarantee[, on a joint and several basis with the other Subsidiary Guarantors,]
the full and prompt payment of the principal of, premium, if any, and interest
on the Notes; and


 


WHEREAS,
pursuant to Section 5.02 of the Second Supplemental Indenture, the
Company, the Subsidiary Guarantors and the Trustee are authorized to execute and
deliver this Supplemental Indenture to amend the Indenture, without the consent
of any Holder;


 


NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guarantor, the
Company, the other Subsidiary Guarantors and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:


 


ARTICLE I

Definitions


 


SECTION 1.1         Defined Terms. As used in this
Supplemental Indenture, terms defined in the Indenture or in the preamble or
recital hereto are used herein as therein defined. The words “herein,” “hereof”
and “hereby” and other words of similar import used in this Supplemental
Indenture refer to this Supplemental Indenture as a whole and not to any
particular section hereof.


 


B-1

















 


ARTICLE II

Agreement to be Bound; Guarantee


 


SECTION 2.1         Agreement to be Bound. The
Guarantor hereby becomes a party to the Indenture, as a Subsidiary Guarantor
and as such will have all of the rights and be subject to all of the
obligations and agreements of a Subsidiary Guarantor under the Indenture. The
Guarantor agrees to be bound by all of the provisions of the Indenture
applicable to a Subsidiary Guarantor and to perform all of the obligations and
agreements of a Subsidiary Guarantor under the Indenture, on a joint and
several basis with the Subsidiary Guarantors parties hereto and thereto, with
the same force and effect as if originally named as a Subsidiary Guarantor
therein and as if such party executed the Indenture on the date thereof.


 


SECTION 2.2         Guarantee. The Guarantor hereby
fully, unconditionally and irrevocably guarantees, as primary obligor and not
merely as surety, jointly and severally with each other Subsidiary Guarantor,
to each Holder of the Notes and the Trustee, the full and punctual payment when
due, whether at maturity, by acceleration, by redemption or otherwise, of the
Obligations pursuant to Article Nine of the Second Supplemental Indenture.


 


ARTICLE III

Miscellaneous


 


SECTION 3.1         Notices. All notices and other
communications to the Guarantor shall be given as provided in the Indenture to
the Guarantor, at its address set forth below, with a copy to the Company as
provided in the Indenture for notices to the Company.


 


SECTION 3.2         GOVERNING LAW. THE INTERNAL LAW
OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL
INDENTURE.


 


SECTION 3.3         Severability Clause. In case any
provision in this Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


SECTION 3.4         Ratification of Indenture;
Supplemental Indentures Part of Indenture. Except as expressly amended
hereby, the Indenture is in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect.
This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every Holder of Notes heretofore or hereafter authenticated and
delivered shall be bound hereby. The Trustee makes no representation or
warranty as to the validity or sufficiency of this Supplemental Indenture.


 


SECTION 3.5         Counterparts. The parties may
sign any number of copies of this Supplemental Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement.


 


SECTION 3.6         Headings. The headings of the
Articles and the sections in this Supplemental Indenture are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.


 


B-2

















 


[Signature page follows]


 


B-3

















 


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


 


	
   

  	
  [SUBSIDIARY
  GUARANTOR],

  
	
   

  	
  as a
  Subsidiary Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BERRY
  PETROLEUM COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


B-4

















 


SCHEDULE 1


 


EXISTING AFFILIATE TRANSACTIONS


 


None


 


Schedule 1