exv4w1






Exhibit 4.1




 

 





HERCULES OFFSHORE, INC.

as Issuer,




The GUARANTORS named herein




and




U.S. BANK NATIONAL ASSOCIATION

as Trustee and Collateral Agent




 






INDENTURE




Dated as of October 20, 2009




 






10.50% Senior Secured Notes due 2017




 

 






 









 








CROSS-REFERENCE TABLE




	 	 	 	 	 
	     TIA	 	 	 	Indenture
	   Section	 	 	 	Section
	310(a)(1)
	 	 	 	7.10
	(a)(2)
	 	 	 	7.10
	(a)(3)
	 	 	 	N.A.
	(a)(4)
	 	 	 	N.A
	(a)(5)
	 	 	 	7.10
	(b)
	 	 	 	7.08; 7.10; 11.02
	(b)(1)
	 	 	 	7.10
	(c)
	 	 	 	N.A.
	311(a)
	 	 	 	7.11
	(b)
	 	 	 	7.11
	(c)
	 	 	 	N.A.
	312(a)
	 	 	 	2.05
	(b)
	 	 	 	11.03
	(c)
	 	 	 	11.03
	313(a)
	 	 	 	7.06
	(b)(1)
	 	 	 	7.06
	(b)(2)
	 	 	 	7.06
	(c)
	 	 	 	7.06; 11.02
	(d)
	 	 	 	7.06
	314(a)
	 	 	 	4.02; 4.04; 4.08; 11.02
	(b)
	 	 	 	12.02; 12.07; 12.09
	(c)(1)
	 	 	 	2.02; 9.01; 12.03
	(c)(2)
	 	 	 	9.01; 12.03
	(c)(3)
	 	 	 	N.A.
	(d)
	 	 	 	12.03; 12.07; 12.08
	(e)
	 	 	 	11.05
	(f)
	 	 	 	N.A.
	315(a)
	 	 	 	7.01; 7.02
	(b)
	 	 	 	7.05; 11.02
	(c)
	 	 	 	7.01
	(d)
	 	 	 	6.05; 7.01; 7.02
	(e)
	 	 	 	6.11
	316(a) (last sentence)
	 	 	 	2.09
	(a)(1)(A)
	 	 	 	6.05
	(a)(1)(B)
	 	 	 	6.04
	(a)(2)
	 	 	 	8.02
	(b)
	 	 	 	6.07
	(c)
	 	 	 	8.04
	317(a)(1)
	 	 	 	6.08
	(a)(2)
	 	 	 	6.09
	(b)
	 	 	 	2.04
	318(a)
	 	 	 	11.01






N.A. means Not Applicable







 




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




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TABLE OF CONTENTS



	 	 	 	 	 	 	 
	 	 	 	 	Page





ARTICLE 1




DEFINITIONS AND INCORPORATION BY REFERENCE




	 	 	 	 	 	 	 
	Section 1.01.
	 	Definitions
	 	 	1	 
	Section 1.02.
	 	Incorporation by Reference of Trust Indenture Act
	 	 	29	 
	Section 1.03.
	 	Rules of Construction
	 	 	29	 






ARTICLE 2




THE NOTES




	 	 	 	 	 	 	 
	Section 2.01.
	 	 Form and Dating
	 	 	30	 
	Section 2.02.
	 	 Execution and Authentication
	 	 	31	 
	Section 2.03.
	 	 Registrar and Paying Agent
	 	 	31	 
	Section 2.04.
	 	 Paying Agent to Hold Assets in Trust
	 	 	32	 
	Section 2.05.
	 	 Noteholder Lists
	 	 	32	 
	Section 2.06.
	 	 Transfer and Exchange
	 	 	32	 
	Section 2.07.
	 	 Replacement Notes
	 	 	33	 
	Section 2.08.
	 	 Outstanding Notes
	 	 	33	 
	Section 2.09.
	 	 Treasury Notes
	 	 	33	 
	Section 2.10.
	 	 Temporary Notes
	 	 	34	 
	Section 2.11.
	 	 Cancellation
	 	 	34	 
	Section 2.12.
	 	 Defaulted Interest
	 	 	34	 
	Section 2.13.
	 	 Deposit of Moneys
	 	 	35	 
	Section 2.14.
	 	 CUSIP Number
	 	 	35	 
	Section 2.15.
	 	 Book-Entry Provisions for Global Notes
	 	 	35	 
	Section 2.16.
	 	 Registration of Transfers and Exchanges
	 	 	36	 
	Section 2.17.
	 	 Restrictive Legends
	 	 	40	 






ARTICLE 3




REDEMPTION




	 	 	 	 	 	 	 
	Section 3.01.
	 	 Notices to Trustee
	 	 	42	 
	Section 3.02.
	 	 Selection of Notes to be Redeemed
	 	 	42	 
	Section 3.03.
	 	 Notice of Redemption
	 	 	42	 
	Section 3.04.
	 	 Effect of Notice of Redemption
	 	 	43	 
	Section 3.05.
	 	 Deposit of Redemption Price
	 	 	43	 
	Section 3.06.
	 	 Notes Redeemed in Part
	 	 	44	 






ARTICLE 4




COVENANTS




	 	 	 	 	 	 	 
	Section 4.01.
	 	Payment of Notes
	 	 	44	 
	Section 4.02.
	 	Reports to Holders
	 	 	44	 






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	 	 	 	 	Page
	Section 4.03.
	 	Waiver of Stay, Extension or Usury Laws
	 	 	45	 
	Section 4.04.
	 	Compliance Certificate; Notice of Default; Tax Information
	 	 	45	 
	Section 4.05.
	 	Payment of Taxes and Other Claims
	 	 	46	 
	Section 4.06.
	 	Corporate Existence
	 	 	46	 
	Section 4.07.
	 	Maintenance of Office or Agency
	 	 	46	 
	Section 4.08.
	 	Compliance with Laws
	 	 	46	 
	Section 4.09.
	 	Maintenance of Properties and Insurance
	 	 	47	 
	Section 4.10.
	 	Limitations on Additional Indebtedness
	 	 	47	 
	Section 4.11.
	 	Limitations on Restricted Payments
	 	 	49	 
	Section 4.12.
	 	Limitations on Asset Sales
	 	 	52	 
	Section 4.13.
	 	Limitations on Transactions with Affiliates
	 	 	55	 
	Section 4.14.
	 	Limitation on Liens
	 	 	57	 
	Section 4.15.
	 	Change of Control
	 	 	57	 
	Section 4.16.
	 	Limitations on Dividend and Other Restrictions Affecting Restricted Subsidiaries
	 	 	59	 
	Section 4.17.
	 	[RESERVED]
	 	 	61	 
	Section 4.18.
	 	Conduct of Business
	 	 	61	 
	Section 4.19.
	 	Limitations on Designation of Unrestricted Subsidiaries
	 	 	61	 
	Section 4.20.
	 	Additional Note Guarantees
	 	 	62	 
	Section 4.21.
	 	Limitations on Layering Indebtedness
	 	 	62	 
	Section 4.22.
	 	Impairment of Security Interest
	 	 	63	 
	Section 4.23.
	 	Termination of Covenants

	 	 	63	 






ARTICLE 5




SUCCESSOR CORPORATION




	 	 	 	 	 	 	 
	Section 5.01.
	 	Limitations on Mergers, Consolidations, Etc
	 	 	63	 
	Section 5.02.
	 	Successor Person Substituted
	 	 	65	 






ARTICLE 6




DEFAULTS AND REMEDIES




	 	 	 	 	 	 	 
	Section 6.01.
	 	Events of Default
	 	 	65	 
	Section 6.02.
	 	Acceleration
	 	 	67	 
	Section 6.03.
	 	Other Remedies
	 	 	68	 
	Section 6.04.
	 	Waiver of Past Defaults and Events of Default
	 	 	68	 
	Section 6.05.
	 	Control by Majority
	 	 	68	 
	Section 6.06.
	 	Limitation on Suits
	 	 	69	 
	Section 6.07.
	 	Rights of Holders To Receive Payment
	 	 	69	 
	Section 6.08.
	 	Collection Suit by Trustee
	 	 	69	 
	Section 6.09.
	 	Trustee May File Proofs of Claim
	 	 	70	 
	Section 6.10.
	 	Priorities
	 	 	70	 
	Section 6.11.
	 	Undertaking for Costs
	 	 	71	 






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	 	 	 	 	Page



ARTICLE 7




TRUSTEE




	 	 	 	 	 	 	 
	Section 7.01.
	 	Duties of Trustee
	 	 	71	 
	Section 7.02.
	 	Rights of Trustee
	 	 	72	 
	Section 7.03.
	 	Individual Rights of Trustee
	 	 	73	 
	Section 7.04.
	 	Trustee’s Disclaimer
	 	 	74	 
	Section 7.05.
	 	Notice of Defaults
	 	 	74	 
	Section 7.06.
	 	Reports by Trustee to Holders
	 	 	74	 
	Section 7.07.
	 	Compensation and Indemnity
	 	 	75	 
	Section 7.08.
	 	Replacement of Trustee
	 	 	76	 
	Section 7.09.
	 	Successor Trustee by Consolidation, Merger or Conversion
	 	 	76	 
	Section 7.10.
	 	Eligibility; Disqualification
	 	 	77	 
	Section 7.11.
	 	Preferential Collection of Claims Against the Issuer
	 	 	77	 






ARTICLE 8




AMENDMENTS, SUPPLEMENTS AND WAIVERS




	 	 	 	 	 	 	 
	Section 8.01.
	 	Without Consent of Holders
	 	 	77	 
	Section 8.02.
	 	With Consent of Holders
	 	 	78	 
	Section 8.03.
	 	Compliance with TIA
	 	 	79	 
	Section 8.04.
	 	Revocation and Effect of Consents
	 	 	80	 
	Section 8.05.
	 	Notation on or Exchange of Notes
	 	 	80	 
	Section 8.06.
	 	Trustee and Collateral Agent To Sign Amendments, etc
	 	 	80	 






ARTICLE 9




DISCHARGE OF INDENTURE; DEFEASANCE




	 	 	 	 	 	 	 
	Section 9.01.
	 	Satisfaction and Discharge of Indenture
	 	 	81	 
	Section 9.02.
	 	Legal Defeasance
	 	 	82	 
	Section 9.03.
	 	Covenant Defeasance
	 	 	82	 
	Section 9.04.
	 	Conditions to Legal Defeasance or Covenant Defeasance
	 	 	83	 
	Section 9.05.
	 	Application of Trust Money
	 	 	84	 
	Section 9.06.
	 	Repayment to the Issuer
	 	 	84	 
	Section 9.07.
	 	Reinstatement
	 	 	84	 






ARTICLE 10




GUARANTEES




	 	 	 	 	 	 	 
	Section 10.01.
	 	Unconditional Guarantee
	 	 	85	 
	Section 10.02.
	 	Severability
	 	 	86	 
	Section 10.03.
	 	Limitation on Guarantor’s Liability
	 	 	86	 
	Section 10.04.
	 	Successors and Assigns
	 	 	87	 
	Section 10.05.
	 	No Waiver
	 	 	87	 
	Section 10.06.
	 	Release of Guarantor
	 	 	87	 
	Section 10.07.
	 	Execution of Supplemental Indenture for Future Guarantors
	 	 	88	 






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	 	 	 	 	Page
	Section 10.08.	 	Notation of Note Guarantee
	 	 	88	 
	Section 10.09.	 	Subordination of Subrogation and Other Rights
	 	 	88	 





ARTICLE 11


MISCELLANEOUS



	 	 	 	 	 	 	 
	Section 11.01.	 	TIA Controls
	 	 	89	 
	Section 11.02.	 	Notices
	 	 	89	 
	Section 11.03.	 	Communications by Holders with Other Holders
	 	 	90	 
	Section 11.04.	 	Certificate and Opinion as to Conditions Precedent
	 	 	90	 
	Section 11.05.	 	Statements Required in Certificate and Opinion
	 	 	90	 
	Section 11.06.	 	Rules by Trustee and Agents
	 	 	91	 
	Section 11.07.	 	Legal Holidays
	 	 	91	 
	Section 11.08.	 	Governing Law
	 	 	91	 
	Section 11.09.	 	No Adverse Interpretation of Other Agreements
	 	 	91	 
	Section 11.10.	 	No Recourse Against Others
	 	 	91	 
	Section 11.11.	 	Successors
	 	 	91	 
	Section 11.12.	 	Consent to Jurisdiction; Waiver of Immunities
	 	 	91	 
	Section 11.13.	 	Multiple Counterparts
	 	 	92	 
	Section 11.14.	 	Table of Contents, Headings, etc
	 	 	92	 
	Section 11.15.	 	Separability
	 	 	92	 





ARTICLE 12


COLLATERAL AND SECURITY



	 	 	 	 	 	 	 
	Section 12.01.	 	Security Documents
	 	 	92	 
	Section 12.02.	 	Recording, Registration and Opinions; Trustee’s Disclaimer Regarding Collateral
	 	 	93	 
	Section 12.03.	 	Possession, Use and Release of Collateral
	 	 	94	 
	Section 12.04.	 	Suits to Protect Collateral
	 	 	94	 
	Section 12.05.	 	Powers Exercisable by Receiver, Trustee or Collateral Agent
	 	 	95	 
	Section 12.06.	 	Determinations Relating to Collateral
	 	 	95	 
	Section 12.07.	 	Certificates of the Issuer and the Guarantors
	 	 	95	 
	Section 12.08.	 	Certificates of the Trustee as Collateral Agent
	 	 	96	 
	Section 12.09.	 	Purchaser Protected
	 	 	96	 
	Section 12.10.	 	Collateral Suspension
	 	 	96	 
	Section 12.11.	 	Authorization of Actions to Be Taken by the Collateral Agent Under the Security Documents
	 	 	97	 
	 
	Signatures	 	 
	 	S-1
	 
	EXHIBITS	 	 

	 	 
	 
	Exhibit A	 	Form of Note

	 	A-1
	Exhibit B	 	Form of Certificate to Be Delivered Upon Exchange or Registration of Transfer of Notes

	 	B-1
	Exhibit C	 	Form of Transferee Letter of Representation

	 	C-1





-v-








 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	Exhibit D
	 	Form of Certificate to Be Delivered in Connection with
Regulation S Transfers

	 	D-1

	Exhibit E
	 	Form of Supplemental Indenture

	 	E-1








-vi-











 





          INDENTURE, dated as of October 20, 2009, among Hercules Offshore, Inc., a Delaware corporation
(the “Issuer”), each of the GUARANTORS (as defined herein) and U.S. Bank National
Association, a national banking association, as trustee (the “Trustee”) and as collateral
agent (the “Collateral Agent”).




          The Issuer has duly authorized the creation of an issue of 10.50% Senior Secured Notes due
2017 (the “Initial Notes”) and, to provide therefor, the Issuer and each Guarantor have
duly authorized the execution and delivery of this Indenture. All things necessary to make the
Notes, when duly issued and executed by the Issuer, and authenticated and delivered hereunder, the
valid obligations of the Issuer, and to make this Indenture a valid and binding agreement of the
Issuer and the Guarantors, have been done.




          Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders:




ARTICLE 1




DEFINITIONS AND INCORPORATION BY REFERENCE




Section 1.01. Definitions.




          The terms defined in this Section 1.01 have the meanings indicated herein. Other capitalized
terms used in this Indenture are defined elsewhere in this Indenture.




          “Acquired Indebtedness” means (1) with respect to any Person that becomes a Restricted
Subsidiary after the Issue Date, Indebtedness of such Person and its Subsidiaries (including, for
the avoidance of doubt, Indebtedness incurred in the ordinary course of such Person’s business to
acquire assets used or useful in its business) existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary and (2) with respect to the Issuer or any Restricted Subsidiary,
any Indebtedness of a Person (including, for the avoidance of doubt, Indebtedness incurred in the
ordinary course of such Person’s business to acquire assets used or useful in its business), other
than the Issuer or a Restricted Subsidiary, existing at the time such Person is merged with or into
the Issuer or a Restricted Subsidiary, or Indebtedness expressly assumed by the Issuer or any
Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person,
which Indebtedness was not, in any case, incurred by such other Person in connection with, or in
contemplation of, such merger or acquisition.




          “Additional Senior Debt” means any Indebtedness of the Issuer or any Guarantor (other
than Indebtedness constituting Senior Loan Obligations or Indebtedness under this Indenture and the
Notes) or any Guarantor secured by the Collateral on a pari passu basis with the Senior Loan
Obligations (but without regard to control of remedies); provided, however, that such Indebtedness
is permitted to be incurred, secured and guaranteed on such basis by this Indenture and the Senior
Debt Documents.




          “Additional Senior Debt Documents” means, with respect to any series, issue or class
of Additional Senior Debt, the promissory notes, indentures, collateral documents or other
operative agreements evidencing or governing such Indebtedness, as the same may be amended,
restated, supplemented or otherwise modified from time to time.




          “Additional Senior Debt Facility” means each indenture or other governing agreement
with respect to any Additional Senior Debt, as the same may be amended, restated, supplemented or
otherwise modified from time to time.



1









 







          “Additional Senior Debt Obligations” means, with respect to any series, issue or class
of Additional Senior Debt, (1) all principal of and interest (including, without limitation, any
interest which accrues after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency or reorganization of the Issuer or any Obligor, whether or not allowed
or allowable as a claim in any such proceeding) payable with respect to such Additional Senior
Debt, (2) all other amounts payable to the related Additional Senior Debt Parties under the related Additional Senior Debt Documents and (3) any renewals,
extensions or refinancings of the foregoing.




          “Additional Senior Debt Parties” means, with respect to any series, issue or class of
Additional Senior Debt, the holders of such Indebtedness from time to time, any trustee or agent
therefor under any related Additional Senior Debt Documents and the beneficiaries of each
indemnification obligation undertaken by the Issuer or any Obligor under any related Additional
Senior Debt Documents, but shall not include the Obligors or any controlled Affiliates thereof
(unless such Obligor or controlled Affiliate is a holder of such Indebtedness, a trustee or agent
therefor or a beneficiary of such an indemnification obligation named as such in an Additional
Senior Debt Document).




          “Affiliate” of any Person means any other Person which directly or indirectly controls or is
controlled by, or is under direct or indirect common control with, the referent Person. For
purposes of this definition, “control” of a Person shall mean 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.




          “Agent” means any Registrar, Paying Agent, co-Registrar, Authenticating Agent or agent
for services of notices and demands.




          “amend” means to amend, supplement, restate, amend and restate or otherwise modify, including
successively, and “amendment” shall have a correlative meaning.




          “Applicable Premium” means, as to each Note on any applicable Redemption Date, an
amount equal to the greater of




          (1) 1.0% of the principal amount of such Note; and




          (2) the excess, if any, of:





          (a) the present value at such Redemption Date of (i) the Redemption Price of
such Note at October 15, 2013 (such Redemption Price being set forth in the table
appearing in paragraph 5 of such Note) plus (ii) all required interest payments
(excluding accrued and unpaid interest to such Redemption Date) due on such Note
through October 15, 2013, computed using a discount rate equal to the Treasury Rate
as of such Redemption Date plus 50 basis points; over




          (b) the principal amount of such Note.



          “asset” means any asset or property.




          “Asset Acquisition” means



2









 








     (1) an Investment by the Issuer or any Restricted Subsidiary in any other Person if, as
a result of such Investment, such Person shall become a Restricted Subsidiary, or shall be
merged with or into the Issuer or any Restricted Subsidiary, or




     (2) the acquisition by the Issuer or any Restricted Subsidiary of all or substantially
all of the assets of any other Person (other than a Restricted Subsidiary) or any division
or line of business of any such other Person (other than in the ordinary course of
business).



          “Asset Sale” means any sale, issuance, conveyance, transfer, lease, assignment or
other disposition by the Issuer or any Restricted Subsidiary to any Person other than the Issuer or
any Restricted Subsidiary (including by means of a sale and leaseback transaction or a merger or
consolidation) (collectively, for purposes of this definition, a “transfer”), in one transaction or
a series of related transactions, of any assets of the Issuer or any of its
Restricted Subsidiaries other than in the ordinary course of business. For purposes of this
definition, the term “Asset Sale” shall not include:





     (1) transfers of cash or Cash Equivalents;




     (2) transfers of assets (including Equity Interests) that are governed by, and made in
accordance with, Section 4.15 or Article 5;




     (3) (a) Restricted Payments permitted under Section 4.11, including the issuance or
sale of Equity Interests or the sale, lease or other disposition of products, services,
equipment, inventory, accounts receivable or other assets pursuant to any such Restricted
Payment, and (b) the consummation of any Permitted Investment, including, without
limitation, unwinding any Hedging Obligations, and including the issuance or sale of Equity
Interests or the sale, lease or other disposition of products, services, equipment,
inventory, accounts receivable or other assets pursuant to any such Permitted Investment;




     (4) the creation of or realization on any Lien permitted under this Indenture or the
Security Documents and any disposition of assets resulting from the enforcement or
foreclosure of any such Lien;




     (5) the sale, lease or other disposition of equipment, inventory, products, services,
accounts receivable or other assets (other than a Vessel) in the ordinary course of
business, including in connection with any compromise, settlement or collection of accounts
receivable, and transfers of damaged, worn-out or obsolete equipment or assets (other than a
Vessel) that, in the Issuer’s reasonable judgment, are no longer used or useful in the
business of the Issuer or its Restricted Subsidiaries;




     (6) sales or grants of licenses or sublicenses to use the patents, trade secrets,
know-how and other intellectual property, and licenses, leases or subleases of other assets,
of the Issuer or any Restricted Subsidiary to the extent not materially interfering with the
business of the Issuer and the Restricted Subsidiaries;




     (7) the trade or exchange by the Issuer or any Restricted Subsidiary of any asset for
any other asset or assets; provided that the Fair Market Value of the asset or assets
received by the Issuer or such Restricted Subsidiary in such trade or exchange (including
any cash or Cash Equivalents) is at least equal to the Fair Market Value (as determined in
good faith by the Board of Directors or an executive officer of the Issuer or of such
Restricted Subsidiary with



3









 






responsibility for such transaction, which determination shall be
conclusive evidence of compliance with this provision) of the asset or assets disposed of by
the Issuer or such Restricted Subsidiary pursuant to such trade or exchange; and, provided,
further, that if any cash or Cash Equivalents are used in such trade or exchange to achieve
an exchange of equivalent value, that the amount of such cash and/or Cash Equivalents shall
be deemed proceeds of an “Asset Sale,” subject to the following clause (12);




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




     (9) sales or transfers of Equity Interests of Unrestricted Subsidiaries;




     (10) transfers of property subject to casualty or condemnation proceedings;




     (11) voluntary termination of Hedging Obligations; and




     (12) any single transfer or series of related transfers that involve assets having a
Fair Market Value of less than $10.0 million.



          “Bank Collateral Agent” means UBS AG, Stamford Branch, in its capacity as collateral
agent under the Credit Agreement, and any successor thereto in such capacity.




          “Bank Collateral Documents” means each security document or pledge agreement executed
by the Issuer or any Guarantor and delivered in accordance with applicable local or foreign law to
grant a valid, perfected security interest in any property as collateral for the Senior Loan
Obligations, in each case, as amended, restated, supplemented or otherwise modified from time to
time.




          “Board of Directors” means, with respect to any Person, (1) in the case of any
corporation, the board of directors of such Person, (2) in the case of any partnership, the Board
of Directors of the general partner of such Person and (3) in any other case, the functional
equivalent of the foregoing or, in each case, other than for purposes of the definition of “Change
of Control,” any duly authorized committee of such body.




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




          “Business Day” means a day other than a Saturday, Sunday or other day on which banking
institutions in New York are authorized or required by law to close.




          “Capitalized Lease” means a lease required to be capitalized for financial reporting
purposes in accordance with GAAP.




          “Capitalized Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under a Capitalized Lease, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.




          “Cash Equivalents” means:



4









 








     (1) marketable obligations issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that the full
faith and credit of the United States of America is pledged in support thereof), maturing
within 360 days of the date of acquisition thereof;




     (2) demand and time deposits and certificates of deposit of any lender under any Credit
Facility or any commercial bank having, or which is the principal banking subsidiary of a
bank holding company organized under the laws of the United States, any state thereof or the
District of Columbia having, capital and surplus aggregating in excess of $300.0 million and
a rating of “BBB” (or such other similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) maturing within 360 days of the date of acquisition thereof;




     (3) commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody’s or having an equivalent rating by a nationally recognized rating agency if both S&P
and Moody’s cease publishing ratings of commercial paper issuers generally, and in each case
maturing not more than one year after the date of acquisition thereof;




     (4) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (1) or (2) above or clause (5) below entered
into with any bank meeting the qualifications specified in clause (2) above;




     (5) securities issued and fully guaranteed by any state, commonwealth or territory of
the United States of America, or by any political subdivision or taxing authority thereof,
rated at least “A” by Moody’s or S&P and having maturities of not more than one year from
the date of acquisition thereof;




     (6) investments in money market or other mutual funds substantially all of whose assets
comprise securities of the types described in clauses (1) through (5) above; and




     (7) demand deposit accounts maintained in the ordinary course of business.



          “Certificated Notes” means one or more certificated Notes in registered form.




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





     (1) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one transaction or a series of related transactions,
of all or substantially all of the properties or assets of the Issuer and its Restricted
Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of
the Exchange Act);




     (2) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that for purposes of this clause that person or group shall be
deemed to have “beneficial ownership” of all securities 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 Voting Stock representing 35.0% or more of the
voting power of the total outstanding Voting Stock of the Issuer;



5









 






     (3) during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors (together with any new directors whose
election to such Board of Directors or whose nomination for election by the stockholders of
the Issuer was recommended by a vote of a majority of the directors of the Issuer then still
in office who were either directors at the beginning of such period or whose election or
nomination for election was previously so recommended) cease for any reason to constitute a
majority of the Board of Directors of the Issuer; and




     (4) the adoption by the stockholders of the Issuer of a Plan of Liquidation.



          For purposes of this definition, a Person shall not be deemed to have beneficial ownership of
securities subject to a stock purchase agreement, merger agreement or similar agreement until the
consummation of the transactions contemplated by such agreement.




          “Collateral” means “Collateral” as defined in any Collateral Document.




          “Collateral Agent” means the Trustee, in its capacity as collateral agent under this
Indenture and under the Security Documents (and as mortgagee trustee under the Ship Mortgages), and
any successor thereto in such capacity.




          “Collateral Documents” means, collectively, the Security Documents, the Bank
Collateral Documents and each of the security agreements and other instruments executed and
delivered by any Obligor pursuant to the Credit Agreement, this Indenture or any Additional Senior
Debt Facility for purposes of providing collateral security or credit support for any Senior
Obligation or Note Obligation (including, in each case, any schedules, exhibits or annexes
thereto), as the same may be amended, restated, supplemented or otherwise modified from time to
time.




          “Collateral Suspension” has the meaning set forth in Section 12.10.




          “Commission” means the Securities and Exchange Commission, as from time to time constituted,
or if at any time after the execution of this Indenture such Commission is not existing and
performing the applicable duties now assigned to it, then the body or bodies performing such duties
at such time.




          “Consolidated Amortization Expense” for any period means the amortization expense of
the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.




          “Consolidated Cash Flow” for any period means, without duplication, the sum of the
amounts for such period of





     (1) Consolidated Net Income, plus




     (2) in each case only to the extent (and in the same proportion) deducted in
determining Consolidated Net Income and with respect to the portion of Consolidated Net
Income attributable to any Restricted Subsidiary that is not a Guarantor only if a
corresponding amount would be permitted at the date of determination to be distributed to
the Issuer by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of



6









 






its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders,




               (a) Consolidated Income Tax Expense,




               (b) Consolidated Amortization Expense (but only to the extent not included in
Consolidated Interest Expense),




               (c) Consolidated Depreciation Expense, and




               (d) Consolidated Interest Expense,




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




     (3) the aggregate amount of all non-cash items, determined on a consolidated basis, to
the extent such items increased Consolidated Net Income for such period, and excluding




     (4) any gain (or loss), together with any related provisions for taxes on any such gain
(or the tax effect of any such loss), realized during such period by the Issuer or any
Restricted Subsidiary upon (i) any Asset Sale by the Issuer or any Restricted Subsidiary,
and (ii) any extraordinary or nonrecurring gain (or extraordinary or nonrecurring loss),
together with any related provision for taxes on any such extraordinary or nonrecurring gain
(or the tax effect of any such extraordinary or nonrecurring loss) recorded or realized by
the Issuer or any Restricted Subsidiary during such period.




     For purposes of this definition of “Consolidated Cash Flow,” “nonrecurring” means any
gain or loss as of any date that is not reasonably likely to recur within the two years
following such date; provided that if there was a gain or loss similar to such gain or loss
within the two years preceding such date, such gain or loss shall not be deemed
nonrecurring.



          “Consolidated Depreciation Expense” for any period means the depreciation expense of
the Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.




          “Consolidated Income Tax Expense” for any period means the provision for taxes of the
Issuer and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP.




          “Consolidated Interest Coverage Ratio” means the ratio of Consolidated Cash Flow
during the most recent four consecutive full fiscal quarters for which financial statements are
available (the “Four-Quarter Period”) ending on or prior to the date of the transaction
giving rise to the need to calculate the Consolidated Interest Coverage Ratio (the “Transaction
Date”) to Consolidated Interest Expense for the Four-Quarter Period. For purposes of this
definition, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated after
giving effect on a pro forma basis (including the pro forma effect of any expense or cost
reductions that have occurred or, in the reasonable judgment of the Issuer, are reasonably expected
to occur (regardless of whether these operating improvements or cost savings could then be
reflected in pro forma financial statements prepared in accordance with Regulation S-X under the
Securities Act or any other regulation or policy of the Commission related thereto)) for the period
of such calculation to:



7









 








     (1) the incurrence of any Indebtedness by or the issuance of any Preferred Stock of the
Issuer or any Restricted Subsidiary (and the application of the proceeds thereof) and any
repayment, repurchase, retirement, extinguishment or redemption of other Indebtedness or
other Preferred Stock (and the application of the proceeds therefrom) (other than the
incurrence or repayment of Indebtedness in the ordinary course of business for working
capital purposes pursuant to any revolving credit arrangement) occurring during the
Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and
on or prior to the Transaction Date, as if such incurrence, repayment, repurchase, issuance,
retirement, extinguishment or redemption, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four-Quarter Period; and




     (2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of the Issuer or
any Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a
result of such Asset Acquisition) incurring Acquired Indebtedness and also including any
Consolidated Cash Flow attributable to such Asset Acquisition occurring during the
Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and
on or prior to the Transaction Date), as if such Asset Sale or Asset Acquisition (including
the incurrence of, or assumption or liability for, any such Acquired Indebtedness) occurred
on the first day of the Four-Quarter Period (and without regard to clause (2) of the
definition of Consolidated Net Income).



          In calculating Consolidated Interest Expense for purposes of determining the denominator (but
not the numerator) of this Consolidated Interest Coverage Ratio:





     (1) interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be deemed to
have accrued during the Four-Quarter Period at a fixed rate per annum equal to the rate of
interest on such Indebtedness in effect on the Transaction Date;




     (2) if interest on any Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor of a prime or similar rate,
a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on
the Transaction Date will be deemed to have been in effect during the Four-Quarter Period;
and




     (3) notwithstanding clause (1) or (2) above, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements relating to Hedging
Obligations, shall be deemed to have accrued during the Four-Quarter Period at the rate per
annum resulting after giving effect to the operation of these agreements.



          “Consolidated Interest Expense” for any period means the sum, without duplication, of
the total interest expense of the Issuer and the Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP and including, without duplication,





     (1) imputed interest on Capitalized Lease Obligations,




     (2) commissions, discounts and other fees and charges owed with respect to letters of
credit securing financial obligations, bankers’ acceptance financing and receivables
financings,




     (3) the net costs associated with Hedging Obligations related to interest rates,



8









 




     (4) the interest portion of any deferred payment obligations,


     (5) all other non-cash interest expense,


     (6) capitalized interest,


     (7) all dividend payments on any series of Disqualified Equity Interests of the Issuer
or any of its Restricted Subsidiaries or any Preferred Stock of any Restricted Subsidiary
(other than dividends on Equity Interests payable solely in Qualified Equity Interests or to
the Issuer or a Restricted Subsidiary),


     (8) all interest payable with respect to discontinued operations, and


     (9) all interest on any Indebtedness described in clause (7) or (8) of the definition
of Indebtedness; provided that amortization of debt issuance costs, debt discount or premium
and other financing fees and expenses shall be excluded from Consolidated Interest Expense.


          “Consolidated Net Income” for any period means the net income (or loss) of the Issuer
and the Restricted Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded from such net income (to the extent otherwise
included therein), without duplication:


     (1) the net income (or loss) of any Person (other than a Restricted Subsidiary) in
which any Person other than the Issuer and the Restricted Subsidiaries has an ownership
interest, except to the extent that cash in an amount up to the Issuer’s share of any such
income has actually been received from such Person by the Issuer or any of its Restricted
Subsidiaries during such period;


     (2) except to the extent includible in the Consolidated Net Income of the Issuer
pursuant to the foregoing clause (1), the net income (or loss) of any Person that accrued
prior to the date that (a) such Person becomes a Restricted Subsidiary or is merged into or
consolidated with the Issuer or any Restricted Subsidiary or (b) the assets of such Person
are acquired by the Issuer or any Restricted Subsidiary;


     (3) the net income of any Restricted Subsidiary that is not a Guarantor during such
period to the extent that the declaration or payment of dividends or similar distributions
by such Restricted Subsidiary of that income is not permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary during such period, except that the
Issuer’s equity in a net loss of any such Restricted Subsidiary for such period shall be
included in determining Consolidated Net Income;


     (4) for the purposes of calculating the Restricted Payments Basket only, in the case of
a successor to the Issuer by consolidation, merger or transfer of its assets, any income (or
loss) of the successor prior to such merger, consolidation or transfer of assets;


     (5) gains and losses due solely to fluctuations in currency values and the related tax
effects according to GAAP;


9









 





     (6) unrealized gains and losses with respect to Hedging Obligations;



     (7) the cumulative effect of any change in accounting principles; and



     (8) all other non-cash items (other than Consolidated Amortization Expense,
Consolidated Depreciation Expense or any non-cash charge that results in an accrual of a
reserve for cash charges in any future period).



     In addition, any return of capital with respect to an Investment that increased the
Restricted Payments Basket pursuant to clause (3)(D) of clause (a) of Section 4.11 or
decreased the amount of Investments outstanding pursuant to clause (20) of the definition of
“Permitted Investments” shall be excluded from Consolidated Net Income for purposes of
calculating the Restricted Payments Basket.



          “Consolidated Tangible Assets” means, with respect to any Person as of any date, the
amount which, in accordance with GAAP, would be set forth under the caption “Total Assets” (or any
like caption) on a consolidated balance sheet of such Person and its Restricted Subsidiaries, less
all goodwill, patents, tradenames, trademarks, copyrights, franchises, experimental expenses,
organization expenses and any other amounts classified as intangible assets in accordance with
GAAP.




          “Contingent Obligation” shall mean, as to any Person, any obligation, agreement,
understanding or arrangement of such Person guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor; (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; (d) with respect to bankers’
acceptances and letters of credit, until a reimbursement obligation arises (which obligation shall
constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term “Contingent
Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary
course of business or any product warranties for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such Contingent
Obligation is made (or, if less, the maximum amount of such primary obligation for which such
Person may be liable, whether severally or jointly, pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to perform thereunder)
as determined by such Person in good faith.




          “Corporate Trust Office” means the office of the Trustee in Houston, Texas at which at
any particular time its corporate trust business shall be principally administered, which office at
the date of execution of this Indenture is located at 5555 San Felipe Street, Suite 1150, Houston,
TX 77056, Attention: Steven Finklea, Corporate Trust Services, or such other address as the
Trustee may designate from time to time by notice to the Holders and the Issuer, or the principal
corporate trust office of any successor Trustee (or such other address as such successor Trustee
may designate from time to time by notice to the Holders and the Issuer).



10









 







          “Coverage Ratio Exception” has the meaning set forth in the proviso in clause (a) of
Section 4.10.




          “Credit Agreement” means the Credit Agreement dated as of July 11, 2007 as amended, by
and among the Issuer, as Borrower, the subsidiary guarantors party thereto, UBS Securities LLC, as
arranger and bookmanager, UBS AG, Stamford Branch, as issuing bank, administrative agent and
collateral agent, Deutsche Bank AG Cayman Islands Branch and Jefferies Finance LLC, as
co-documentation agents, Amegy Bank, National Association and Comerica Bank, as co-syndication
agents, and UBS Loan Finance LLC, as swingline lender, and the other lenders named therein,
including any notes, guarantees, collateral and security documents, instruments and agreements
executed in connection therewith (including Hedging Obligations related to the Indebtedness
incurred thereunder), and in each case as further amended or refinanced by one or more Credit
Facilities that are secured by the Collateral on the same priority basis as the Credit Agreement in
effect prior to such refinancing from time to time.




          “Credit Facilities” means one or more debt facilities of the Issuer or any Restricted
Subsidiary (which may be outstanding at the same time and including, without limitation, the Credit
Agreement) with banks or other institutional lenders or investors or indentures providing for
revolving credit loans, term loans, letters of credit or other long term indebtedness, including
any guarantees, collateral documents, instruments and agreements executed in connection therewith,
and, in each case, as such agreements may be amended, refinanced or otherwise restructured, in
whole or in part from time to time (including increasing the amount of available borrowings
thereunder or adding Subsidiaries of the Issuer as additional borrowers or guarantors thereunder)
with respect to all or any portion of the Indebtedness under such agreement or agreements, any
successor or replacement agreement or agreements or any indenture or successor or replacement
indenture and whether by the same or any other agent, lender, group of lenders or investors.




          “Default” means (1) any Event of Default or (2) any event, act or condition that,
after notice or the passage of time or both, would be an Event of Default.




          “Delta Towing Assets” means, collectively, the property used primarily in the
furtherance of the business of Delta Towing Holdings, LLC, a Delaware limited liability company,
and Delta Towing, LLC, a Delaware limited liability company, in each case as of the Issue Date,
together with replacements thereof in the ordinary course of business.




          “Depository” means, with respect to the Notes issued in the form of one or more Global
Notes, The Depository Trust Company or another Person designated as Depository by the Issuer, which
Person must be a clearing agency registered under the Exchange Act.




          “Designation” has the meaning given to such term in Section 4.19.




          “Designation Amount” has the meaning given to such term in Section 4.19.




          “Disqualified Equity Interests” of any Person means any class of Equity Interests of
such Person that, by its terms, or by the terms of any related agreement or of any security into or
for which it is convertible, puttable or exchangeable (in each case, at the option of the holder
thereof), is, or upon the happening of any event or the passage of time would be, required to be
redeemed by such Person, at the option of the holder thereof, or matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, in any case on
or prior to the date which is 91 days after the final maturity date of the Notes; provided,
however, that any class of Equity Interests of such Person that,




11









 







by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon
maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise
by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not
convertible into or puttable or exchangeable for Disqualified Equity Interests or Indebtedness,
will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its
obligations with respect thereto solely by the delivery of Equity Interests that are not
Disqualified Equity Interests; provided, further, however, that any Equity Interests that would not
constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the
holders of any security into or for which such Equity Interests are convertible, exchangeable or
exercisable) the right to require the Issuer to repurchase or redeem such Equity Interests upon the
occurrence of a change in control or an asset sale occurring prior to the 91st day after the final
maturity date of the Notes shall not constitute Disqualified Equity Interests if the change of
control or asset sale provisions applicable to such Equity Interests are no more favorable to such
holders than the provisions of Section 4.15 and Section 4.12, respectively, and such Equity
Interests specifically provide that the Issuer will not repurchase or redeem any such Equity
Interests pursuant to such provisions prior to the Issuer’s purchase of the Notes as required
pursuant to the provisions of Section 4.15 and Section 4.12, respectively.




          “Domestic Restricted Subsidiary” means (1) each Restricted Subsidiary organized or
existing under the laws of the United States, any state thereof or the District of Columbia and (2)
any other Restricted Subsidiary that guarantees any Indebtedness under the Credit Agreement.




          “Equity Interests” of any Person means (1) any and all shares or other equity
interests (including common stock, preferred stock, limited liability company interests and
partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether
or not currently exercisable), participations or other equivalents of or interests in (however
designated) such shares or other interests in such Person, but excluding from all of the foregoing
any debt securities convertible into Equity Interests, regardless of whether such debt securities
include any right of participation with Equity Interests.




          “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.




          “Exchange Notes” means Notes which may be issued in exchange for Initial Notes
pursuant to the terms of a Registration Rights Agreement.




          “Fair Market Value” means, with respect to any asset, the price (after taking into
account any liabilities relating to such assets) that would be negotiated in an arm’s-length
transaction for cash between a willing seller and a willing and able buyer, neither of which is
under any compulsion to complete the transaction, and, with respect to any transaction or series of
related transactions having a value in excess of $10.0 million, as such price is determined in good
faith by the Board of Directors of the Issuer or a duly authorized committee thereof, as evidenced
by a resolution of such Board of Directors or committee.




          “fiscal year” means the twelve-month period ending each December 31.




          “Foreign Restricted Subsidiary” means any Restricted Subsidiary other than a Domestic
Restricted Subsidiary.




          “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such




12









 







other statements by such other entity as may be approved by a significant segment of the
accounting profession of the United States, as in effect from time to time. At any time after the
Issue Date, if permitted by the Commission, the Issuer may elect to apply International Financial
Reporting Standards (“IFRS”) in lieu of GAAP and, upon any such election, references herein
to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this
Indenture); provided that calculation or determination in this Indenture that requires the
application of GAAP for periods that include fiscal quarters ended prior to the Issuer’s election
to apply IFRS shall remain as previously calculated or determined in accordance with GAAP. The
Issuer shall give notice of any such election made in accordance with this definition to the
Trustee and the Holders.




          “guarantee” means a direct or indirect guarantee by any Person of any Indebtedness of any
other Person and includes 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)
Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase
arrangements are on arm’s-length terms and are entered into in the ordinary course of business), 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); “guarantee,”
when used as a verb, and “guaranteed” have correlative meanings.




          “Guarantors” means each Domestic Restricted Subsidiary on the Issue Date and each other Person
that is required to, or at the election of the Issuer does, become a Guarantor by the terms of this
Indenture after the Issue Date, in each case, until such Person is released from its Note Guarantee
in accordance with the terms of this Indenture.




          “Hedging Obligations” of any Person means the obligations of such Person under swap,
cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates,
currency exchange rates or commodity prices, either generally or under specific contingencies.




          “Holder” means any registered holder, from time to time, of the Notes.




          “incur” means, with respect to any Indebtedness or Obligation, incur, create, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with
respect to such Indebtedness or Obligation; provided that (1) the Indebtedness of a Person existing
at the time such Person became a Restricted Subsidiary shall be deemed to have been incurred by
such Restricted Subsidiary at the time it becomes a Restricted Subsidiary and (2) none of the
accrual of interest, the accretion of original issue discount or the accretion or accumulation of
dividends on any Equity Interests shall be deemed to be an incurrence of Indebtedness.




          “Indebtedness” of any Person at any date means, without duplication:





     (1) all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof);




     (2) all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;



13









 






     (3) all reimbursement obligations of such Person in respect of letters of credit,
letters of guaranty, bankers’ acceptances and similar credit transactions;




     (4) all obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred by such Person in
the ordinary course of business in connection with obtaining goods, materials or services;




     (5) the maximum fixed redemption or repurchase price of all Disqualified Equity
Interests of such Person;




     (6) all Capitalized Lease Obligations of such Person;




     (7) all Indebtedness of others secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person;




     (8) all Indebtedness of others guaranteed by such Person to the extent of such
guarantee; provided that Indebtedness of the Issuer or its Subsidiaries that is guaranteed
by the Issuer or the Issuer’s Subsidiaries shall only be counted once in the calculation of
the amount of Indebtedness of the Issuer and its Subsidiaries on a consolidated basis;




     (9) to the extent not otherwise included in this definition, Hedging Obligations of
such Person;




     (10) all obligations of such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person; and




     (11) all Contingent Obligations of such Person in respect of Indebtedness or
obligations of others of the kinds referred to in clauses (1) through (10) above.



          The amount of any Indebtedness which is incurred at a discount to the principal amount at
maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof
as of such date. 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, the maximum liability of
such Person for any such Contingent Obligations at such date and, in the case of clause (7), the
lesser of (a) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of
others on the date of determination and (b) the amount of the Indebtedness secured. For purposes
of clause (5), the “maximum fixed redemption or repurchase price” of any Disqualified
Equity Interests that do not have a fixed redemption or repurchase price shall be calculated
in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity
Interests were redeemed or repurchased on the applicable date on which an amount of Indebtedness
outstanding shall be required to be determined pursuant to this Indenture.




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




          “Independent Director” means a director of the Issuer who





     (1) is independent with respect to the transaction at issue;




     (2) does not have any material financial interest in the Issuer or any of its
Affiliates (other than as a result of holding securities of the Issuer); and



14









 






     (3) has not and whose Affiliates or affiliated firm has not, at any time during the
twelve months prior to the taking of any action hereunder, directly or indirectly, received,
or entered into any understanding or agreement to receive, any compensation, payment or
other benefit, of any type or form, from the Issuer or any of its Affiliates, other than
customary directors’ fees for serving on the Board of Directors of the Issuer or any
Affiliate and reimbursement of out-of-pocket expenses for attendance at the Issuer’s or
Affiliate’s board and board committee meetings.



          “Independent Financial Advisor” means an accounting, appraisal or investment banking
firm of nationally recognized standing that is, in the reasonable judgment of the Issuer’s Board of
Directors, qualified to perform the task for which it has been engaged and disinterested and
independent with respect to the Issuer and its Affiliates.




          “Inland Barge Assets” means, collectively, the assets as of the Issue Date primarily
related to the business conducted by the fleet of six conventional and eleven posted barge rigs
owned by THE Offshore Drilling Company, a Delaware corporation, that operate inland in marshes,
rivers, lakes and shallow bay or coastal waterways along the U.S. Gulf Coast, and replacements
thereof in the ordinary course of business.




          “Initial Notes” has the meaning provided in the preamble to this Indenture.




          “Institutional Accredited Investor” means an institution that is an “accredited
investor” as that term is defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the
Securities Act.




          “Intellectual Property” means all patents, patent applications, trademarks, trade
names, service marks, copyrights, technology, trade secrets, proprietary information, domain names,
know how and processes necessary for the conduct of the Issuer’s or any Restricted Subsidiary’s
business as currently conducted.




          “Intercreditor Agreement” means the intercreditor agreement dated as of the Issue Date
among the Trustee, as Collateral Agent, the Bank Collateral Agent, the Issuer and each Guarantor,
as it may be amended from time to time.




          “Interest Payment Date” means the stated maturity of an installment of interest on the
Notes.




          “Investments” of any Person means:





     (1) all direct or indirect investments by such Person in any other Person in the form
of loans, advances or capital contributions or other credit extensions constituting
Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;




     (2) all purchases (or other acquisitions for consideration) by such Person of
Indebtedness, Equity Interests or other securities of any other Person (other than any such
purchase that constitutes a Restricted Payment of the type described in clause (2) of the
definition thereof);



15









 






     (3) all other items that would be classified as investments on a balance sheet of such
Person prepared in accordance with GAAP (including, if required by GAAP, purchases of assets
outside the ordinary course of business); and




     (4) the Designation of any Subsidiary as an Unrestricted Subsidiary.



          Except as otherwise expressly specified in this definition, the amount of any Investment
(other than an Investment made in cash) shall be the Fair Market Value thereof on the date such
Investment is made. The amount of Investment pursuant to clause (4) shall be the Designation
Amount determined in accordance with Section 4.19. If the Issuer or any Restricted Subsidiary
sells or otherwise disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted
Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary, the Issuer shall be deemed to have made
an Investment on the date of any such sale or other disposition equal to the Fair Market Value of
the Equity Interests of and all other Investments in such Restricted Subsidiary retained.
Notwithstanding the foregoing, purchases or redemptions of Equity Interests of the Issuer shall be
deemed not to be Investments.




          “Issue Date” means the date on which the Initial Notes are first issued under this
Indenture.




          “Issuer” means the party named as such in this Indenture until a successor replaces it
pursuant to this Indenture and thereafter means the successor.




          “Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or
other), pledge, lease, easement, restriction, covenant, charge, security interest or other
encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law, including any conditional sale or other title retention
agreement.




          “Liquidated Damages” has the meaning set forth in the Registration Rights Agreement.




          “Maturity Date” means October 15, 2017.




          “Moody’s” means Moody’s Investors Service, Inc., and its successors.




          “Net Available Proceeds” means, with respect to any Asset Sale, the proceeds thereof
in the form of cash or Cash Equivalents received by the Issuer or any of its Restricted
Subsidiaries from such Asset Sale, net of





     (1) brokerage commissions and other fees and expenses (including fees, discounts and
expenses of legal counsel, accountants and investment banks, consultants and placement
agents) of such Asset Sale;




     (2) provisions for taxes payable as a result of such Asset Sale (after taking into
account any available tax credits or deductions and any tax sharing arrangements);




     (3) amounts required to be paid to any Person (other than the Issuer or any Restricted
Subsidiary and other than under the Credit Agreement) owning a beneficial interest in the
assets subject to the Asset Sale or having a Lien thereon;



16









 






     (4) payments of unassumed liabilities (not constituting Indebtedness) relating to the
assets sold at the time of, or within 30 days after the date of, such Asset Sale; and




     (5) appropriate amounts to be provided by the Issuer or any Restricted Subsidiary, as
the case may be, as a reserve required in accordance with GAAP against any adjustment in the
sale price of such asset or assets or liabilities associated with such Asset Sale and
retained by the Issuer or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including pensions and other postemployment benefit liabilities, liabilities related
to environmental matters and liabilities under any indemnification obligations associated
with such Asset Sale, all as reflected in an Officers’ Certificate delivered to the Trustee;
provided, however, that any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Available Proceeds.



          “Net Proceeds Offer” has the meaning given to this term in Section 4.12(g)(1).




          “Non-Recourse Debt” means Indebtedness of an Unrestricted Subsidiary:





     (1) as to which neither the Issuer nor any Restricted Subsidiary (a) provides credit
support of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise,
or (c) constitutes the lender; 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 (other than the Credit
Agreement or Notes) of the Issuer or any Restricted Subsidiary to declare a default on the
other Indebtedness or cause the payment thereof to be accelerated or payable prior to its
stated maturity.



          “Note Guarantee” means the guarantee by each Guarantor of the obligations of the
Issuer with respect to the Notes.




          “Note Obligations” means all Obligations of the Issuer and the Guarantors under the
Notes, this Indenture and the Security Documents.




          “Notes” means the Initial Notes, any Additional Notes and the Exchange Notes, treated as a
single class of securities, as amended or supplemented from time to time in accordance with the
terms hereof, that are issued pursuant to this Indenture.




          “Obligation” means any principal, interest, penalties, fees, indemnification, reimbursements,
costs, expenses, damages and other liabilities payable under the documentation governing any
Indebtedness.




          “Obligors” means the Issuer, the Guarantors and any other Person who is liable for any
of the Note Obligations.




          “Offer Payment Date” means any date on which a Net Proceeds Offer is consummated.



17









 







          “Offering Circular” means the Final Offering Circular dated October 8, 2009 relating
to the offering of $300.0 million of Notes by the Issuer.




          “Officer” means any of the following of the Issuer: the Chairman of the Board of Directors,
the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary.




          “Officers’ Certificate” means a certificate signed by two Officers.




          “OID” means the original issue discount of the Notes for federal income tax purposes.




          “Opinion of Counsel” means a written opinion which is acceptable to the Trustee and
complies with the requirements of this Indenture from legal counsel acceptable to the Trustee.




          “Pari Passu Indebtedness” means any Indebtedness of the Issuer or any Guarantor that
ranks pari passu in right of payment with the Notes or the Note Guarantees, as applicable.




          “Permitted Acquisition Indebtedness” means Indebtedness of the Issuer or any of its
Restricted Subsidiaries to the extent such Indebtedness was Indebtedness of:





     (1) a Subsidiary prior to the date on which such Subsidiary became a Restricted
Subsidiary; or




     (2) a Person that was merged or consolidated into the Issuer or a Restricted
Subsidiary,


provided that, in each case, such Indebtedness was not incurred in connection with or in
contemplation of such event and on the date such Subsidiary became a Restricted Subsidiary or the
date such Person was merged and consolidated into the Issuer or a Restricted Subsidiary, as
applicable, after giving pro forma effect thereto:





     (a) the Issuer or the Restricted Subsidiary, as applicable, would be permitted to incur
at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception, or




     (b) the Consolidated Interest Coverage Ratio would be greater than the Consolidated
Interest Coverage Ratio immediately prior to such transaction.



          “Permitted Business” means the businesses engaged in by the Issuer and its
Subsidiaries on the Issue Date as described in the Offering Circular and businesses that are
reasonably related thereto or reasonable extensions thereof.



          “Permitted Investment” means:





     (1) Investments by the Issuer or any Restricted Subsidiary in (a) any Restricted
Subsidiary or (b) any Person that will become immediately after such Investment a Restricted
Subsidiary or that will merge or consolidate into the Issuer or any Restricted Subsidiary;




     (2) Investments in the Issuer by any Restricted Subsidiary;



18









 






     (3) loans and advances to, or reimbursements of, directors, employees and officers of
the Issuer and the Restricted Subsidiaries (a) in the ordinary course of business (including
payroll, travel and entertainment related advances and reimbursements) (other than any loans
or advances to any director or executive officer (or equivalent thereof) that would be in
violation of Section 402 of the Sarbanes Oxley Act) and (b) to purchase Equity Interests of
the Issuer not in excess of $5.0 million at any one time outstanding;




     (4) Hedging Obligations entered into for bona fide hedging purposes of the Issuer or
any Restricted Subsidiary not for the purpose of speculation;




     (5) Investments in cash and Cash Equivalents;




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




     (7) Investments in securities of trade creditors or customers received pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers;




     (8) Investments made by the Issuer or any Restricted Subsidiary as a result of
consideration received in connection with an Asset Sale made in compliance with Section
4.12;




     (9) lease, utility and other similar deposits in the ordinary course of business;




     (10) Investments made by the Issuer or a Restricted Subsidiary for consideration
consisting only of Qualified Equity Interests of the Issuer or any of its Subsidiaries;




     (11) stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Issuer or any Restricted Subsidiary or in
satisfaction of judgments;




     (12) Permitted Joint Venture Investments;




     (13) Investments existing on the Issue Date or made pursuant to binding commitments in
effect on the Issue Date or Investments consisting of any extension, modification or renewal
(without increasing the amount) of any Investment existing on the Issue Date;




     (14) repurchases of, or other Investments in, the Notes;




     (15) advances, deposits and prepayments for purchases of any assets, including any
Equity Interests;




     (16) endorsements for collection of deposits in the ordinary course of business;




     (17) guarantees of Indebtedness permitted under Section 4.10;



19









 






     (18) guarantees by the Issuer or any of its Restricted Subsidiaries of operating leases
(other than Capitalized Lease Obligations) or of other obligations that do not constitute
Indebtedness, in each case entered into by any Restricted Subsidiary in the ordinary course
of business;




     (19) Investments received as a result of a foreclosure by the Issuer or any of its
Restricted Subsidiaries with respect to any secured investment permitted under this
Indenture that is in default; and




     (20) other Investments in any Person having an aggregate Fair Market Value (measured on
the date each such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this clause (20)
since the Issue Date, not to exceed the greater of (a) $50.0 million or (b) 2.50% of the
Issuer’s Consolidated Tangible Assets.



          In determining whether any Investment is a Permitted Investment, the Issuer may allocate or
reallocate all or any portion of an Investment among the clauses of this definition and any of the
provisions of Section 4.11.




          “Permitted Joint Venture Investment” means any Investment received in exchange for (i)
Delta Towing Assets or Inland Barge Assets or (ii) Equity Interests of any Person the sole assets
of which are Delta Towing Assets or Inland Barge Assets.




          “Permitted Liens” means the following types of Liens:





     (1) Liens for taxes, assessments or governmental charges or levies which (a) are not
overdue or delinquent by more than 30 days or (b) are being contested in good faith by
appropriate proceedings and as to which the Issuer or the Restricted Subsidiaries shall have
set aside on their books such reserves as may be required pursuant to GAAP;




     (2) Liens in respect of property of the Issuer or any Restricted Subsidiary imposed by
law, which were not incurred or created to secure Indebtedness for borrowed money, such as
carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’, repairmen’s,
mechanics’, maritime and salvage Liens and other Liens arising in the ordinary course of
business, and which do not in the aggregate materially detract from the value of the
property of the Issuer or its Restricted Subsidiaries, taken as a whole, and do not
materially impair the use thereof in the operation of the business of the Issuer and its
Restricted Subsidiaries, taken as a whole;




     (3) Liens (a) imposed by law or deposits made in connection therewith in the ordinary
course of business in connection with workers’ compensation, unemployment insurance and
other types of social security or similar legislation, (b) incurred in the ordinary course
of business to secure the performance of tenders, statutory obligations (other than excise
taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, other contracts (other than agreements governing Indebtedness
for borrowed money), performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (c) arising by virtue of
deposits made in the ordinary course of business to secure liability for premiums to
insurance carriers;




20












 






     (4) Liens upon specific items of inventory or other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or created for
the account of such Person to facilitate the purchase, shipment or storage of such inventory
or other goods;




     (5) Liens arising out of judgments or awards not resulting in a Default or an Event of
Default;




     (6) easements, rights of way, restrictions (including zoning restrictions), covenants,
encroachments, protrusions and other similar charges or encumbrances, and minor title
deficiencies on or with respect to any Real Property, in each case whether now or hereafter
in existence, not (a) securing Indebtedness, (b) individually or in the aggregate materially
impairing the value or marketability of such Real Property and (c) individually or in the
aggregate materially interfering with the conduct of the business of the Issuer and its
Restricted Subsidiaries at such Real Property;




     (7) Liens securing reimbursement obligations with respect to commercial letters of
credit which encumber documents and other assets relating to such letters of credit and
products and proceeds thereof;




     (8) Liens encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements of the Issuer or any Restricted Subsidiary,
including rights of offset and setoff;




     (9) bankers’ Liens, rights of setoff and other similar Liens existing solely with
respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by the
Issuer or any Restricted Subsidiary, in each case granted in the ordinary course of business
in favor of the bank or banks with which such accounts are maintained, securing amounts
owing to such bank with respect to cash management and operating account arrangements,
including those involving pooled accounts and netting arrangements; provided that, unless
such Liens are non consensual and arise by operation of law, in no case shall any such Liens
secure (either directly or indirectly) the repayment of any Indebtedness;




     (10) leases with respect to the assets or properties of the Issuer and any Restricted
Subsidiary, in each case entered into in the ordinary course of the Issuer’s or such
Restricted Subsidiary’s business so long as such leases do not, individually or in the
aggregate, (a) interfere in any material respect with the ordinary conduct of the business
of the Issuer or any Restricted Subsidiary or (b) materially impair the use (for its
intended purposes) or the value of the property subject thereto;




     (11) the filing of financing statements solely as a precautionary measure in connection
with operating leases or consignment of goods;




     (12) Liens securing all of the Notes originally issued on the Issue Date and Liens
securing any Note Guarantee thereof and Liens securing Additional Notes permitted to be
incurred under this Indenture and any Note Guarantee thereof, provided that the aggregate
principal amount of such Additional Notes (and any Refinancing Indebtedness in respect
thereof) plus the aggregate principal amount of any Indebtedness and commitments under
Credit Facilities



21









 






secured by Liens pursuant to clause (16) below does not at any time exceed the
aggregate amount of Indebtedness permitted to be secured under such clause (16);




     (13) Liens securing Hedging Obligations entered into for bona fide hedging purposes of
the Issuer or any Restricted Subsidiary and not for the purpose of speculation;




     (14) Liens existing on the Issue Date securing Indebtedness outstanding on the Issue
Date; provided that (a) the aggregate principal amount of the Indebtedness, if any, secured
by such Liens does not increase; and (b) such Liens do not encumber any property other than
the property subject thereto on the Issue Date;




     (15) Liens in favor of the Issuer or a Guarantor;




     (16) Liens securing Obligations under the Credit Facilities relating to Indebtedness
incurred and then outstanding pursuant to sub-clause (1) of clause (b) of Section 4.10;




     (17) Liens arising pursuant to Purchase Money Indebtedness incurred and then
outstanding pursuant to sub-clause (7) of clause (b) of Section 4.10; provided that (a) the
Indebtedness secured by any such Lien (including refinancings thereof) does not exceed 100%
of the cost of the property being acquired or leased at the time of the incurrence of such
Indebtedness and (b) any such Liens attach only to the property being financed pursuant to
such Purchase Money Indebtedness and do not encumber any other property of the Issuer or any
Restricted Subsidiary;




     (18) Liens securing Acquired Indebtedness permitted to be incurred under this
Indenture; provided that the Liens do not extend to assets not subject to such Lien at the
time of acquisition (other than improvements thereon) and are no more favorable to the
lienholders than those securing such Acquired Indebtedness prior to the incurrence of such
Acquired Indebtedness by the Issuer or a Restricted Subsidiary;




     (19) Liens on property or Equity Interests of a Person existing at the time such Person
is acquired or merged with or into or consolidated with the Issuer or any Restricted
Subsidiary (and not created in anticipation or contemplation thereof); provided that such
Liens do not extend to property not subject to such Liens at the time of acquisition (other
than improvements thereon) and are no more favorable to the lienholders than the existing
Lien;




     (20) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred
to in the foregoing clauses (12), (14), (17), (18) and (19); provided that in the case of
Liens securing Refinancing Indebtedness of Indebtedness secured by Liens referred to in the
foregoing clauses (14), (17), (18) and (19), such Liens do not extend to any additional
assets (other than improvements thereon and replacements thereof);




     (21) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any
joint venture owned by the Issuer or any Restricted Subsidiary to the extent securing
Non-Recourse Debt of such Unrestricted Subsidiary or joint venture;




     (22) licenses of Intellectual Property granted by the Issuer or any Restricted
Subsidiary in the ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of the Issuer or such Restricted Subsidiary;



22









 






     (23) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by Issuer or any Restricted Subsidiary in
the ordinary course of business in accordance with the past practices of the Issuer or such
Restricted Subsidiary;




     (24) Liens on assets of any Foreign Restricted Subsidiary to secure Indebtedness of
such Foreign Restricted Subsidiary which Indebtedness is permitted by this Indenture;




     (25) Liens of franchisors arising in the ordinary course of business not securing
Indebtedness;




     (26) Liens in favor of the Trustee as provided for in this Indenture on money or
property held or collected by the Trustee in its capacity as Trustee; and




     (27) other Liens with respect to obligations that do not in the aggregate exceed at any
time outstanding $50.0 million.



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




          “Plan of Liquidation” with respect to any Person, means a plan that provides for,
contemplates or the effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of such Person otherwise than as an entirety
or substantially as an entirety; and (2) the distribution of all or substantially all of the
proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the
remaining assets of such Person to holders of Equity Interests of such Person.




          “Preferred Stock” means, with respect to any Person, any and all preferred or
preference stock or other preferred equity interests (however designated) of such Person whether
now outstanding or issued after the Issue Date.




          “principal” means, with respect to the Notes, the principal of, and the premium, if any, on
the Notes.




          “Purchase Money Indebtedness” means Indebtedness, including Capitalized Lease
Obligations, of the Issuer or any Restricted Subsidiary incurred for the purpose of financing all
or any part of the purchase price of property, plant or equipment used in the business of the
Issuer or any Restricted Subsidiary or the cost of installation, construction or improvement
thereof; provided, however, that (except in the case of Capitalized Lease Obligations) (1) the
amount of such Indebtedness shall not exceed such purchase price or cost and (2) such Indebtedness
shall be incurred within 180 days after such acquisition of such asset by the Issuer or such
Restricted Subsidiary or such installation, construction or improvement.




          “Qualified Equity Interests” of any Person means Equity Interests of such Person other
than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed
Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed,
directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person
until and to the





23









 







extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by such
Person or any Subsidiary of such Person (including, without limitation, in respect of any employee
stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to
Qualified Equity Interests of the Issuer.




          “Qualified Equity Offering” means (1) an offering for cash by the Issuer of its Equity
Interests (other than Disqualified Equity Interests) or (2) a contribution of cash to the Issuer in
exchange for its Equity Interests (other than Disqualified Equity Interests).




          “Qualified Institutional Buyer” shall have the meaning specified in Rule 144A
promulgated under the Securities Act.




          “Rating Agencies” means Moody’s and S&P.




          “Real Property” means, collectively, all right, title and interest (including any
leasehold estate) in and to any and all parcels of or interests in real property owned, leased or
operated by any Person, whether by lease, license or other means, together with, in each case, all
easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant
fixtures and equipment, all general intangibles and contract rights and other property and rights
incidental to the ownership, lease or operation thereof.




          “Record Date” for interest payable on any Interest Payment Date (except a date for
payment of default interest) means the April 1 and October 1 (whether or not a Business Day) as the
case may be, immediately preceding such Interest Payment Date.




          “Redemption Date” when used with respect to any Note to be redeemed means the date
fixed for such redemption pursuant to this Indenture.




          “Redemption Price” when used with respect to any Note to be redeemed means the price
fixed for such redemption pursuant to this Indenture.




          “Redesignation” has the meaning given to such term in Section 4.19.




          “refinance” means to refinance, repay, prepay, replace, renew or refund in whole or in part.




          “Refinancing Indebtedness” means Indebtedness of the Issuer or a Restricted Subsidiary
incurred in exchange for, or the proceeds of which are used to redeem, refinance, replace, defease,
discharge, refund or otherwise retire for value, in whole or in part, any Indebtedness of the
Issuer or any Restricted Subsidiary (the “Refinanced Indebtedness”); provided that:





     (1) the principal amount (and accreted value, in the case of Indebtedness issued at a
discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted
value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and
unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders
of the Refinanced Indebtedness and reasonable expenses incurred in connection with the
incurrence of the Refinancing Indebtedness;



24









 






     (2) the obligor of Refinancing Indebtedness does not include any Person (other than the
Issuer or any Guarantor) that is not an obligor of the Refinanced Indebtedness;




     (3) if the Refinanced Indebtedness was subordinated in right of payment to the Notes or
the Note Guarantees, as the case may be, then such Refinancing Indebtedness, by its terms,
is subordinate in right of payment to the Notes or the Note Guarantees, as the case may be,
at least to the same extent as the Refinanced Indebtedness;




     (4) the Refinancing Indebtedness has a final stated maturity either (a) no earlier than
the Refinanced Indebtedness or (b) after the Maturity Date;




     (5) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on
or prior to the Maturity Date has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average
Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is
scheduled to mature on or prior to the Maturity Date; and




     (6) the proceeds of the Refinancing Indebtedness shall be used substantially
concurrently with the incurrence thereof to redeem, refinance, replace, defease, discharge,
refund or otherwise retire for value the Refinanced Indebtedness, unless the Refinanced
Indebtedness is not then due and is not redeemable or prepayable at the option of the
obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds
shall be held in a segregated account of the obligor of the Refinanced Indebtedness until
the Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period
lapses and then shall be used to refinance the Refinanced Indebtedness; provided that in any
event the Refinanced Indebtedness shall be redeemed, refinanced, replaced, defeased,
discharged, refunded or otherwise retired for value within one year of the incurrence of the
Refinancing Indebtedness.



          “Registration Rights Agreement” means (1) the Registration Rights Agreement dated as
of the Issue Date among the Issuer, the Guarantors and the initial purchasers of the Notes issued
on the Issue Date and (2) any other registration rights agreement entered into in connection with
an issuance of Additional Notes in a private offering after the Issue Date.




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




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




          “Restricted Payment” means any of the following:





     (1) the declaration or payment of any dividend or any other distribution on Equity
Interests of the Issuer or any Restricted Subsidiary or any payment made to the direct or
indirect holders (in their capacities as such) of Equity Interests of the Issuer or any
Restricted Subsidiary, including, without limitation, any payment in connection with any
merger or consolidation involving the Issuer but excluding (a) dividends or distributions
payable solely in Qualified Equity Interests or through accretion or accumulation of such
dividends on such Equity Interests and (b) in the case of Restricted Subsidiaries, dividends
or distributions payable to the Issuer or to a Restricted Subsidiary and pro rata dividends
or distributions payable to minority stockholders of any Restricted Subsidiary;



25









 






     (2) the purchase, redemption, defeasance or other acquisition or retirement for value
of any Equity Interests of the Issuer or any Restricted Subsidiary (including, without
limitation, any payment in connection with any merger or consolidation involving the Issuer)
but excluding any such Equity Interests held by the Issuer or any Restricted Subsidiary;




     (3) any Restricted Investment; or




     (4) any principal payment on, purchase, redemption, defeasance, prepayment, decrease or
other acquisition or retirement for value prior to any scheduled maturity or prior to any
scheduled repayment of principal or sinking fund payment, as the case may be, in respect of
Subordinated Indebtedness (other than any Subordinated Indebtedness owed to and held by the
Issuer or any Restricted Subsidiary).



          “Restricted Payments Basket” has the meaning given to such term in clause (a) of
Section 4.11.




          “Restricted Security” means a security that is required to bear the Private Placement
Legend; provided that the Trustee shall be entitled to request and conclusively rely upon an
Opinion of Counsel with respect to whether any Note is a Restricted Security.




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




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




          “S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc., and its successors.




          “Secretary’s Certificate” means a certificate signed by the Secretary of the Issuer.




          “Securities Act” means the U.S. Securities Act of 1933, as amended.




          “Security Agreement” means the Security Agreement, dated as of the Issue Date, among
the Issuer, the Guarantors party thereto and the Trustee, as Collateral Agent, for the benefit of
the Holders, as amended, restated, supplemented, or otherwise modified from time to time.




          “Security Documents” means the Security Agreement, the Ship Mortgages, the Trademark
Security Agreement, the Intercreditor Agreement and each other security document or pledge
agreement executed by the Issuer or any Guarantor and delivered in accordance with applicable local
or foreign law to grant a valid, perfected security interest in any property as collateral for the
Note Obligations, in each case, as amended, restated, supplemented or otherwise modified from time
to time.




          “Senior Debt Documents” means the Credit Agreement, the Bank Collateral Documents and
any other Additional Senior Debt Documents.




          “Senior Facilities” means the Credit Agreement and any Additional Senior Debt
Facilities.




          “Senior Loan Obligations” means all Obligations of the obligors under the Credit
Agreement, including (1) (a) obligations of the Issuer and the Guarantors from time to time arising
under



26









 






or in respect of the due and punctual payment of (i) the principal of and interest (including
interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on the loans made under
the Credit Agreement, when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, (ii) each payment required to be made by the Issuer and the
Guarantors under the Credit Agreement in respect of any letter of credit issued under the Credit
Agreement, when and as due, including payments in respect of reimbursement obligations, interest
thereon and obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in
such proceeding), of the Issuer and the Guarantors under the Credit Agreement and the related loan
documents, and (b) the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Issuer and the Guarantors or pursuant to the Credit Agreement and the related
loan documents, (2) the due and punctual payment and performance of all obligations of the Issuer
and the Guarantors under each Hedging Agreement (as defined in the Credit Agreement) entered into
with any counterparty that is a Senior Loan Party and (3) the due and punctual payment and
performance of all obligations of Issuer and the Guarantors (including overdrafts and related
liabilities) under each Treasury Services Agreement (as defined in the Credit Agreement) entered
into with any counterparty that is a Senior Loan Party.




          “Senior Loan Parties” means, collectively, (1) the administrative agent, the
collateral agent, each other agent, the lenders and the issuing bank, in each case, under the
Credit Agreement, (2) each counterparty to a Hedging Agreement or Treasury Services Agreement (in
each case, as defined in the Credit Agreement) if at the date of entering into such Hedging
Agreement or Treasury Services Agreement such person was an agent or a lender under the Credit
Agreement or an Affiliate of an agent or a lender under the Credit Agreement, and (3) any other
Secured Party (as defined in the Credit Agreement), and the successors and permitted assigns of
each of the foregoing.




          “Senior Obligations” means the Senior Loan Obligations and any Additional Senior Debt
Obligations.




          “Ship Mortgage” means any of the preferred fleet mortgages of a vessel or vessels
delivered by the Issuer or Guarantor in favor of the Collateral Agent on behalf of the Holders of
the Notes, as amended, restated, supplemented or otherwise modified from time to time.




          “Significant Subsidiary” means (1) any Restricted Subsidiary that would be a
“significant subsidiary” as defined in Regulation S-X promulgated pursuant to the Securities Act as
such Regulation is in effect on the Issue Date and (2) any Restricted Subsidiary that, when
aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries
and as to which any event described in clause (7) of Section 6.01 has occurred and is continuing,
or which are being released from their Note Guarantees (in the case of clause (9) of the provisions
described in Section 8.02), would constitute a Significant Subsidiary under clause (1) of this
definition.




          “Subordinated Indebtedness” means Indebtedness of the Issuer or any Restricted
Subsidiary that is expressly subordinated in right of payment to the Notes or the Note Guarantees,
respectively.




          “Subsidiary” means, with respect to any Person:




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     (1) any corporation, limited liability company, association or other business entity of
which more than 50% of the total voting power of the Equity Interests entitled (without
regard to the occurrence of any contingency) to vote in the election of the Board of
Directors thereof is at the time owned or controlled, directly or indirectly, by such Person
or one or more of the other Subsidiaries of such Person (or a combination thereof); and




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



          Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Issuer.




          “Trademark Security Agreement” means the Trademark Security Agreement dated as of
Issue Date, by and among the Issuer, the Trustee as Collateral Agent, Cliffs Drilling Company and
the other grantors party thereto, as amended, restated, supplemented or otherwise modified from
time to time.




          “Treasury Rate” means, as of any redemption date, the weekly average 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 or similar market data))
equal to the period from the redemption date to October 15, 2013; provided, however, that if the
period from the redemption date to October 15, 2013 is not equal to the constant maturity of a
United States 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 that have a constant maturity closest to
and greater than the period from the redemption date to October 15, 2013 and the United States
Treasury securities that have a constant maturity closest to and less than the period from the
redemption date to October 15, 2013 for which such yields are given, except that if the period from
the redemption date to October 15, 2013 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one year shall be used.




          “Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as
amended. Individual sections of the Trust Indenture Act are sometimes referred to herein as “TIA
Section.”




          “Trust Officer” means, when used with respect to the Trustee, any officer of the
Trustee within the Corporate Trust Services (or any successor unit, department or division of the
Trustee) located at the Corporate Trust Office of the Trustee who has direct responsibility for the
administration of this Indenture and, for the purposes of Sections 7.01(c)(2) and 7.05, also means,
with respect to a particular corporate trust matter, any other officer, trust officer or person
performing similar functions to whom such matter is referred because of his or her knowledge of and
familiarity of the particular subject.




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




          “Unrestricted Subsidiary” means (1) any Subsidiary that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in
accordance with Section 4.19 and (2) any Subsidiary of an Unrestricted Subsidiary.




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          “U.S. Government Obligations” means direct non-callable obligations of, or guaranteed
by, the United States of America for the payment of which guarantee or obligations the full faith
and credit of the United States is pledged.




          “Vessel” means any lift boats, drilling rigs, including jackup rigs, submersible rigs,
semi-submersible rigs, barge rigs, drill ships and any other maritime drilling rig, at any time
owned by the Issuer and its Subsidiaries




          “Voting Stock” with respect to any Person, means securities of any class of Equity
Interests of such Person entitling the holders thereof (whether at all times or only so long as no
senior class of stock or other relevant equity interest has voting power by reason of any
contingency) to vote in the election of members of the Board of Directors of such Person.




          “Weighted Average Life to Maturity” when applied to any Indebtedness at any date,
means the number of years obtained by dividing (1) the sum of the products obtained by multiplying
(a) the amount of each then remaining installment, sinking fund, serial maturity or other required
payment of principal, including payment at final maturity, in respect thereof by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between such date and the making of
such payment by (2) the then outstanding principal amount of such Indebtedness.




Section 1.02. Incorporation by Reference of Trust Indenture Act.




          Whenever this Indenture refers to a provision of the TIA, the portion of such provision
required to be incorporated herein in order for this Indenture to be qualified under the TIA is
incorporated by reference in and made a part of this Indenture. The following TIA terms used in
this Indenture have the following meanings:




          “indenture securities” means the Notes.




          “indenture securityholder” means a Holder.




          “indenture to be qualified” means this Indenture.




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




          “obligor on the indenture securities” means the Issuer, the Guarantors or any other
obligor on the Notes.




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




Section 1.03. Rules of Construction.




          Unless the context otherwise requires:





     (a) a term has the meaning assigned to it herein, whether defined expressly or by
reference;




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



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     (c) “or” is not exclusive;




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




     (e) words used herein implying any gender shall apply to every gender;




     (f) “$”, “U.S. Dollars” and “Dollars” each refers to United States dollars, or such
other money of the United States of America that at the time of payment is legal tender for
payment of public and private debts; and




     (g) whenever in this Indenture there is mentioned, in any context, the payment of
principal, interest or any other amount payable under or with respect to any Note, such
mention shall be deemed to include mention of the payment of Liquidated Damages to the
extent that, in such context, Liquidated Damages are, were or would be payable in respect
thereof.



ARTICLE 2




THE NOTES




Section 2.01. Form and Dating.




          The Notes and the Trustee’s certificate of authentication shall be substantially in the form
of Exhibit A hereto. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or Depository rule or usage. The form of the Notes and any notation,
legend or endorsement on them shall be satisfactory to both the Issuer and the Trustee. Each Note
shall be dated the date of its issuance and shall show the date of its authentication.




          The terms and provisions contained in the Notes, annexed hereto as Exhibit A, shall
constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable,
the Issuer and the Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.




          The Notes shall be issued initially in the form of one or more permanent global Notes (the
“Global Notes”). Notes offered and sold (i) in reliance on Rule 144A shall be issued
initially in the form of one or more permanent Global Notes in registered form, substantially in
the form set forth in Exhibit A (the “ Rule 144A Global Note”) and (ii) in offshore
transactions in reliance on Regulation S shall be issued initially in the form of one or more
permanent global Notes in registered form, substantially in the form set forth in Exhibit A
(the “Regulation S Global Note”), and in each case shall be deposited with the Trustee, as
custodian for the Depository, duly executed by the Issuer and authenticated by the Trustee as
hereinafter provided. Notes transferred to Institutional Accredited Investors may be represented
by a permanent Global Note in registered form, substantially in the form set forth in Exhibit
A, and if so represented shall be deposited with the Trustee, as custodian for the Depository,
duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of any Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository, as hereinafter
provided.




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Section 2.02. Execution and Authentication.




          The Notes shall be executed on behalf of the Issuer by two Officers of the Issuer. Such
signatures may be either manual or facsimile.




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




          A Note shall not be valid until an authorized signatory of the Trustee signs the certificate
of authentication on the Note. Such signature shall be manual. Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.




          The Trustee or an authentication agent (the “Authenticating Agent”) shall authenticate
(i) Initial Notes for original issue on the date of this Indenture in the aggregate principal
amount not to exceed $300,000,000, (ii) additional Notes (“Additional Notes”) for original
issue following the date of this Indenture (so long as permitted by the terms of this Indenture,
including, without limitation, Section 4.10 and Section 4.14 hereof) and (iii) Exchange Notes from
time to time for issue only in exchange for a like principal amount of Initial Notes or Additional
Notes, as the case may be, in each case upon a written order of the Issuer executed by an Officer.
The written order shall specify the amount of Notes to be authenticated, the date on which the
Notes are to be authenticated and shall further specify the amount of such Notes to be issued as a
Global Note or Certificated Notes.




          Notwithstanding the foregoing, all Notes issued under this Indenture shall vote and consent
together on all matters (as to which any of such Notes may vote or consent) as one class and no
series of Notes will have the right to vote or consent as a separate class on any matter.




          The Trustee may appoint an Authenticating Agent to authenticate Notes. Any such appointment
shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished
to the Issuer. An Authenticating Agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes authentication by such
Authenticating Agent. An Authenticating Agent has the same right as an Agent to deal with the
Issuer and Affiliates of the Issuer.




          The Notes shall be issuable only in registered form without coupons and only in denominations
of $2,000 and integral multiples of $1,000 in excess thereof.




Section 2.03. Registrar and Paying Agent.




          The Issuer shall maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (“Registrar”), where Notes may be presented for payment
(“Paying Agent”) and where notices and demands to or upon the Issuer in respect of the
Notes and this Indenture may be served. The Registrar shall keep a register of the Notes and of
their transfer and exchange. The Registrar shall provide the Issuer a current copy of such
register from time to time upon request of the Issuer. The Issuer may have one or more
co-Registrars and one or more additional Paying Agents. Neither the Issuer nor any Affiliate of
the Issuer may act as Paying Agent. The Issuer may change any Paying Agent, Registrar or
co-Registrar without notice to any Holder.




          The Issuer shall enter into an appropriate agency agreement with any Agent not a party to this
Indenture. The agreement shall implement the provisions of this Indenture that relate to such
Agent.




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The Issuer shall notify the Trustee of the name and address of any such Agent. If the Issuer
fails to maintain a Registrar or Paying Agent, or agent for service of notices and demands, or
fails to give the foregoing notice, the Trustee shall act as such. The Issuer initially appoints
the Trustee as Registrar, Paying Agent and agent for service of notices and demands in connection
with the Notes.




Section 2.04. Paying Agent to Hold Assets in Trust.




          The Issuer shall require each Paying Agent other than the Trustee to agree in writing that
each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all assets held
by the Paying Agent for the payment of principal of or interest on Notes (whether such assets have
been distributed to it by the Issuer or any other obligor on the Notes), and shall notify the
Trustee in writing of any Default in making any such payment. The Issuer at any time may require a
Paying Agent to distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any Default in any payment due
on the Notes, upon written request to a Paying Agent, require such Paying Agent to forthwith
distribute to the Trustee all assets so held in trust by such Paying Agent together with a complete
accounting of such sums. Upon distribution to the Trustee of all assets that shall have been
delivered by the Issuer to the Paying Agent, the Paying Agent shall have no further liability for
such assets.




Section 2.05. Noteholder Lists.




          The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders. If the Trustee is not the Registrar,
the Issuer shall furnish or cause the Registrar to furnish to the Trustee on or before each January
15 and July 15 in each year, and at such other times as the Trustee may request in writing, a list
in such form and as of such date as the Trustee may reasonably require of the names and addresses
of Holders which list may be conclusively relied on by the Trustee.




Section 2.06. Transfer and Exchange.




          Subject to the provisions of Sections 2.15 and 2.16 hereof, when Notes are presented to the
Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange
such Notes for an equal principal amount of Notes of other authorized denominations of the same
series, the Registrar or co-Registrar shall register the transfer or make the exchange as requested
if its requirements for such transaction are met; provided, however, that the Notes presented or
surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfer and exchanges, the Issuer shall execute and the Trustee shall
authenticate Notes at the Registrar’s or co-Registrar’s request. No service charge shall be made
for any registration of transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge in connection therewith payable
by the transferor of such Notes (other than any such transfer taxes or similar governmental charge
payable upon exchanges or transfers pursuant to Section 2.10, 3.06, 4.12, 4.15 or 8.05 hereof, in
which event the Issuer shall be responsible for the payment of such taxes).




          Without the prior consent of the Issuer, the Registrar or co-Registrar shall not be required
to register the transfer of or exchange of any Note (i) during a period of 15 days before a
selection of Notes to be redeemed, (ii) selected for redemption in whole or in part pursuant to
Article 3 hereof, except




32









 







the unredeemed portion of any Note being redeemed in part, or (iii) between a Record Date and
the next succeeding Interest Payment Date.




          Any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of
beneficial interests in such Global Notes may be effected only through a book entry system
maintained by the Depository, and that ownership of a beneficial interest in the Note shall be
required to be reflected in a book entry.




Section 2.07. Replacement Notes.




          If a mutilated Note is surrendered to the Trustee or if the Holder presents evidence to the
satisfaction of the Issuer and the Trustee that the Note has been lost, destroyed or wrongfully
taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note. An indemnity
or a security bond may be required by the Issuer or the Trustee that is sufficient in the judgment
of the Issuer and the Trustee to protect the Issuer, the Trustee or any Agent from any loss which
any of them may suffer if a Note is replaced. In every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and to the Trustee evidence to their satisfaction of the
destruction, loss or the theft of such Note and the ownership thereof. Each of the Issuer and the
Trustee may charge for its expenses in replacing a Note. In the event any such mutilated, lost,
destroyed or wrongfully taken Note has become due and payable, the Issuer in its discretion may pay
such Note instead of issuing a new Note in replacement thereof. The provisions of this Section
2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with
respect to replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.




          Every replacement Note is an additional obligation of the Issuer.




Section 2.08. Outstanding Notes.




          Notes outstanding at any time are all Notes authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in this Section 2.08
as not outstanding.




          If a Note is replaced pursuant to Section 2.07 hereof (other than a mutilated Note surrendered
for replacement), it ceases to be outstanding until the Issuer and the Trustee receive proof
satisfactory to each of them that the replaced Note is held by a protected purchaser. A mutilated
Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07 hereof.




          If by 10:00 a.m., New York City time, on a Redemption Date or the Maturity Date, the Paying
Agent holds U.S. legal tender sufficient to pay all of the principal and interest due on the Notes
payable on that date, then on and after that date such Notes cease to be outstanding and interest
on them ceases to accrue.




Section 2.09. Treasury Notes.




          In determining whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver, consent or notice, Notes owned by the Issuer or any of its Affiliates shall
be considered as though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be so considered. The
Issuer shall





33









 







notify the Trustee, in writing, when it or any of its Affiliates repurchases or otherwise
acquires Notes, of the aggregate principal amount of such Notes so repurchased or otherwise
acquired.




Section 2.10. Temporary Notes.




          Until definitive Notes are ready for delivery, the Issuer may prepare and the Trustee shall
authenticate temporary Notes upon receipt of a written order of the Issuer in the form of an
Officers’ Certificate. The Officers’ Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations that the Issuer
considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare
and the Trustee shall authenticate upon receipt of a written order of the Issuer pursuant to
Section 2.02 definitive Notes in exchange for temporary Notes.




Section 2.11. Cancellation.




          The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and
the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or
the Paying Agent, and no one else, shall cancel and, at the written direction of the Issuer,
dispose of and deliver evidence of such disposal of all Notes surrendered for registration of
transfer, exchange, payment or cancellation in accordance with their then existing procedures
therefor. Subject to Section 2.07 hereof, the Issuer may not issue new Notes to replace Notes that
it has paid or delivered to the Trustee for cancellation. If the Issuer shall acquire any of the
Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11. In no event shall the Trustee be required to destroy cancelled
Notes.




Section 2.12. Defaulted Interest.




          The Issuer shall pay interest on overdue principal (including post-petition interest in a
proceeding under Bankruptcy Law) at the rate of interest then borne by the Notes. The Issuer
shall, to the extent lawful, pay interest on overdue installments of interest (without regard to
any applicable grace periods) at the rate of interest then borne by the Notes.




          If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted interest to the Persons
who are Holders on a subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Issuer for the payment of defaulted interest or the next succeeding
Business Day if such date is not a Business Day. At least 15 days before the subsequent special
record date, the Issuer shall mail to each Holder, as of a recent date selected by the Issuer, with
a copy to the Trustee, a notice that states the subsequent special record date, the payment date
and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to
be paid.




          Notwithstanding the foregoing, any interest which is paid prior to the expiration of the
30-day period set forth in Section 6.01(a) hereof shall be paid to Holders as of the Record Date
for the Interest Payment Date for which interest has not been paid.




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Section 2.13. Deposit of Moneys.




          No later than 10:00 a.m., New York City time, on each Interest Payment Date, Redemption Date,
Change of Control Payment Date, Offer Payment Date and Maturity Date, the Issuer shall have
deposited with the Paying Agent in immediately available funds U.S. legal tender sufficient to make
payments, if any, due on such Interest Payment Date, Redemption Date, Change of Control Payment
Date, Offer Payment Date or Maturity Date, as the case may be, in a timely manner which permits the
Trustee to remit payment to the Holders on such Interest Payment Date, Redemption Date, Change of
Control Payment Date, Offer Payment Date or Maturity Date, as the case may be. The principal and
interest on Global Notes shall be payable to the Depository or its nominee, as the case may be, as
the sole registered owner and the sole Holder of the Global Notes represented thereby. The
principal and interest on Notes in certificated form shall be payable in the manner indicated in
paragraph 2 of the Notes.




Section 2.14. CUSIP Number.




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




Section 2.15. Book-Entry Provisions for Global Notes.




          (a) The Global Notes initially shall (i) be registered in the name of the Depository or the
nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and
(iii) bear legends as set forth in Section 2.17 hereof.




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




          (b) Subject to the rules and procedures of the Depository, Certificated Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests in Global Notes
only if (i) the Depository (x) notifies the Issuer that it is unwilling or unable to continue as
Depository for any Global Note and the Issuer fails to appoint a successor Depository within 90
days of such notice or (y) has ceased to be a clearing company registered under the Exchange Act
and a successor Depository is not appointed by the Issuer within 90 days after becoming aware of
such cessation, (ii) the Issuer, at its option but subject to the procedures of the Depository,
notifies the Trustee in writing that the Issuer elects to cause the issuance of Certificated Notes
or (iii) an Event of Default has occurred and is continuing and the Depository notifies the Trustee
of its desire to exchange Global Notes for Certificated Notes.




35









 








          (c) In connection with the transfer of Global Notes as an entirety to beneficial owners
pursuant to paragraph (b), the Global Notes shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuer shall execute, and the Trustee shall, upon receipt of an
authentication order from the Issuer in the form of an Officers’ Certificate, authenticate and
deliver, to each beneficial owner identified by the Depository in writing in exchange for its
beneficial interest in the Global Notes, an equal aggregate principal amount of Certificated Notes
of authorized denominations.




          (d) Any Certificated Note constituting a Restricted Security delivered in exchange for an
interest in a Global Note pursuant to paragraph (b) or (c) shall, except as otherwise provided by
Section 2.16 hereof, bear the Private Placement Legend.




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




Section 2.16. Registration of Transfers and Exchanges.




          (a) Transfer and Exchange of Certificated Notes. When Certificated Notes are
presented to the Registrar or co-Registrar with a request:





          (i) to register the transfer of the Certificated Notes; or




          (ii) to exchange such Certificated Notes for an equal principal amount of Certificated
Notes of other authorized denominations,


the Registrar or co-Registrar shall register the transfer or make the exchange as requested if the
requirements under this Indenture as set forth in this Section 2.16 for such transactions are met;
provided, however, that the Certificated Notes presented or surrendered for registration of
transfer or exchange:





     (I) shall be duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Registrar or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and




     (II) in the case of Certificated Notes the offer and sale of which have not been
registered under the Securities Act and are presented for transfer or exchange prior to (x)
the date which is one year after the later of the date of original issue and the last date
on which the Issuer or any Affiliate of the Issuer was the owner of such Note, or any
predecessor thereto and (y) such later date, if any, as may be required by any subsequent
change in applicable law (the “Resale Restriction Termination Date”), such
Certificated Notes shall be accompanied, in the sole discretion of the Issuer, by the
following additional information and documents, as applicable:




     (A) if such Certificated Note is being delivered to the Registrar or
co-Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification to that effect (substantially in the form of Exhibit
B hereto); or




     (B) if such Certificated Note is being transferred to a Qualified Institutional
Buyer in accordance with Rule 144A, a certification to that effect (substantially in
the form of Exhibit B hereto); or



36









 






     (C) if such Certificated Note is being transferred in reliance on Regulation S,
delivery of a certification to that effect (substantially in the form of Exhibit
B hereto) and a transferor certificate for Regulation S transfers substantially
in the form of Exhibit D hereto; or




     (D) if such Certificated Note is being transferred to an Institutional
Accredited Investor, delivery of a certification to that effect (substantially in
the form of Exhibit B hereto), a certificate of the transferee in
substantially the form of Exhibit C and, at the option of the Issuer, an
Opinion of Counsel reasonably satisfactory to the Issuer to the effect that such
transfer is in compliance with the Securities Act; or




     (E) if such Certificated Note is being transferred in reliance on Rule 144
under the Securities Act, delivery of a certification to that effect substantially
in the form of Exhibit C hereto) and, at the option of the Issuer, an Opinion of
Counsel reasonably satisfactory to the Issuer to the effect that such transfer is in
compliance with the Securities Act; or




     (F) if such Certificated Note is being transferred in reliance on another
exemption from the registration requirements of the Securities Act, a certification
to that effect (substantially in the form of Exhibit C hereto) and, at the option of
the Issuer, an Opinion of Counsel reasonably satisfactory to the Issuer to the
effect that such transfer is in compliance with the Securities Act.



          (b) Restrictions on Transfer of a Certificated Note for a Beneficial Interest in a Global
Note. A Certificated Note may not be exchanged for a beneficial interest in a Global Note
except upon satisfaction of the requirements set forth below. Upon receipt by the Registrar or
co-Registrar of a Certificated Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:





     (A) in the case of Certificated Notes, the offer and sale of which have not been
registered under the Securities Act and which are presented for transfer prior to the Resale
Restriction Termination Date, certification, substantially in the form of Exhibit B
hereto, that such Certificated Note is being transferred (I) to a Qualified Institutional
Buyer or (II) in an offshore transaction in reliance on Regulation S (and, in the case of
this clause II, the Issuer shall have received a transferor certificate for Regulation S
transfers substantially in the form of Exhibit D hereto; and




     (B) written instructions from the Holder thereof directing the Registrar or
co-Registrar to make, or to direct the Depository to make, an endorsement on the applicable
Global Note to reflect an increase in the aggregate amount of the Notes represented by the
Global Note,


then the Registrar or co-Registrar shall cancel such Certificated Note and cause, or direct the
Depository to cause, in accordance with the standing instructions and procedures existing between
the Depository and the Registrar or co-Registrar, the principal amount of Notes represented by the
applicable Global Note to be increased accordingly. If no Global Note representing Notes held by
Qualified Institutional Buyers or Persons acquiring Notes in offshore transactions in reliance on
Regulation S, as the case may be, is then outstanding, the Issuer shall issue and the Trustee
shall, upon receipt of an authentication order of the Issuer executed by an Officer, authenticate
such a Global Note in the appropriate principal amount.




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          (c) Transfer and Exchange of Global Notes. The transfer and exchange of Global Notes
or beneficial interests therein shall be effected through the Depository in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the procedures of the
Depository therefor. Upon receipt by the Registrar or co-Registrar of written instructions, or
such other instruction as is customary for the Depository, from the Depository or its nominee,
respecting the transfer of an interest in one type of Global Note to another type of Global Note
then the Registrar or co-Registrar will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Registrar or co-Registrar, the aggregate
principal amount of the applicable Global Note to be reduced or increased, as appropriate, by the
amount of the interest to be transferred. If the applicable type of Global Note required to
represent the interest to be transferred is not outstanding at the time of such request, the Issuer
shall issue and the Trustee shall, upon receipt of an authentication order from the Issuer executed
by an Officer, authenticate a new Global Note of such type in principal amount equal to the
principal amount of the interest to be transferred.




          (d) Transfer of a Beneficial Interest in a Global Note for a Certificated Note. (i)
If Certificated Notes are to be issued in exchange for Global Notes pursuant to Section 2.15(b),
then upon receipt by the Registrar or co-Registrar of written instructions, or such other form of
instructions as is customary for the Depository, from the Depository or its nominee on behalf of
any Person having a beneficial interest in a Global Note and upon receipt by the Trustee of a
written order or such other form of instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange of a beneficial interest in Notes
the offer and sale of which have not been registered under the Securities Act and which Notes are
presented for transfer or exchange prior to the Resale Restriction Termination Date, the following
additional information and documents:





     (A) if such beneficial interest is being transferred to the Person designated by the
Depository as being the beneficial owner, a certification from such Person to that effect
(substantially in the form of Exhibit B hereto); or




     (B) if such beneficial interest is being transferred to a Qualified Institutional Buyer
in accordance with Rule l44A, a certification to that effect (substantially in the form of
Exhibit B hereto); or




     (C) if such beneficial interest is being transferred in reliance on Regulation S,
delivery of a certification to that effect (substantially in the form of Exhibit B
hereto) and a transferor certificate for Regulation S transfers substantially in the form of
Exhibit D hereto; or




     (D) if such beneficial interest is being transferred to an Institutional Accredited
Investor, delivery of a certification to that effect (substantially in the form of
Exhibit B hereto), a certificate of the transferee in substantially the form of
Exhibit C and, at the option of the Issuer, an Opinion of Counsel reasonably
satisfactory to the Issuer to the effect that such transfer is in compliance with the
Securities Act; or




     (E) if such beneficial interest is being transferred in reliance on Rule 144 under the
Securities Act, delivery of a certification to that effect (substantially in the form of
Exhibit B hereto) and, at the option of the Issuer, an Opinion of Counsel reasonably
satisfactory to the Issuer to the effect that such transfer is in compliance with the
Securities Act; or



38









 






     (F) if such beneficial interest is being transferred in reliance on another exemption
from the registration requirements of the Securities Act, a certification to that effect
(substantially in the form of Exhibit B hereto) and, at the option of the Issuer, an
Opinion of Counsel reasonably satisfactory to the Issuer to the effect that such transfer is
in compliance with the Securities Act,


then the Registrar or co-Registrar will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Registrar or co-Registrar, the aggregate
principal amount of the applicable Global Note to be reduced and, following such reduction, the
Issuer will execute and, upon receipt of an authentication order from the Issuer executed by an
Officer, the Trustee will authenticate and deliver to the transferee a Certificated Note in the
appropriate principal amount and series.




          (ii) Certificated Notes issued in exchange for a beneficial interest in a Global Note pursuant
to this Section 2.16(d) hereof shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Registrar or co-Registrar in writing. The Registrar or
co-Registrar shall deliver such Certificated Notes to the Persons in whose names such Certificated
Notes are so registered.




          (e) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any other
provisions of this Indenture, a Global Note may not be transferred as a whole except by the
Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such successor Depository.




          (f) Private Placement Legend. Upon the transfer, exchange or replacement of Notes not
bearing the Private Placement Legend, the Registrar or co-Registrar shall deliver Notes that do not
bear the Private Placement Legend. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar or co-Registrar shall deliver only Notes that bear the
Private Placement Legend unless, and the Trustee is hereby authorized to deliver Notes without the
Private Placement Legend if, (i) the Resale Restriction Termination Date shall have occurred, (ii)
there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Issuer and
the Trustee to the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities Act, (iii) such Note
has been sold pursuant to an effective registration statement under the Securities Act or (iv) such
Note is an Exchange Note.




          (g) General. By its acceptance of any Note bearing the Private Placement Legend, each
Holder of such a Note acknowledges the restrictions on transfer of such Note set forth in this
Indenture and in the Private Placement Legend and agrees that it will transfer such Note only as
provided in this Indenture.




          None of the Issuer, the Trustee, any agent of the Issuer or the Trustee (including any Paying
Agent or Registrar) will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a Global Note or for
maintaining, supervising or reviewing any records relating to such beneficial ownership interests.




          The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Note (including any transfers between or among Agent
Members or beneficial owners of interests in any Global Note) other than to require delivery of
such certificates and other documentation or evidence as are expressly required by, and to do so if
and when



39









 






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




          The Registrar shall retain copies of all letters, notices and other written communications
received pursuant to Section 2.15 hereof or this Section 2.16. The Issuer shall have the right to
inspect and make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.




Section 2.17. Restrictive Legends.




          Each Global Note and Certificated Note that constitutes a Restricted Security shall bear the
following legend (the “Private Placement Legend”) on the face thereof until the Resale
Restriction Termination Date, unless otherwise agreed to by the Issuer:





     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.




     THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF
AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR (IN THE CASE OF RULE 144A
SECURITIES) AFTER THE LATER OF THE ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) OR 40 DAYS (IN THE CASE OF REGULATION S SECURITIES),
ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000, FOR INVESTMENT



40









 






PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER OR THE ISSUER ON OR AFTER THE RESALE
RESTRICTION TERMINATION DATE.




     Each Global Note shall also bear the following legend:




     THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR
DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.




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




     Each Note shall also bear the following legend:




     THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271
ET SEQ. OF THE INTERNAL REVENUE CODE. A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT
OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH NOTES BY
SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUERS AT THE FOLLOWING
ADDRESS: HERCULES OFFSHORE, INC., 9 GREENWAY PLAZA, SUITE 2200, HOUSTON, TEXAS
77046, ATTENTION: CHIEF FINANCIAL OFFICER.



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ARTICLE 3




REDEMPTION




Section 3.01. Notices to Trustee.




          If the Issuer elects to redeem Notes pursuant to paragraph 5 of the Notes, at least 60 days
prior to the Redemption Date or during such other period as the Trustee may agree to, the Issuer
shall notify the Trustee in writing of the Redemption Date, the principal amount of Notes to be
redeemed and the Redemption Price, if then determinable, and deliver to the Trustee an Officers’
Certificate stating that such redemption will comply with the conditions contained herein and in
the Notes, as appropriate.




Section 3.02. Selection of Notes to be Redeemed.




          In the event that less than all of the Notes are to be redeemed at any time, selection of the
Notes to be redeemed shall be made by the Trustee 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 then listed on a national security exchange, on a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate; provided, however, that no Notes of a principal
amount of $2,000 or less shall be redeemed in part; provided, further, that if a partial redemption
is made with the proceeds of any Qualified Equity Offering, selection of the Notes or portions
thereof for redemption shall be made by the Trustee only on a pro rata basis or on as nearly a pro
rata basis as is practicable (subject to the procedures of the Depository), unless such method is
otherwise prohibited. A new Note in a principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon delivery of the original Note to the Paying
Agent and cancellation of the original Note. On and after the Redemption Date, interest will cease
to accrue on Notes or portions thereof called for redemption as long as the Issuer has deposited
with the Paying Agents funds in U.S. legal tender in satisfaction of the applicable Redemption
Price and amount of accrued interest, if any, payable pursuant to this Indenture.




Section 3.03. Notice of Redemption.




          Notice of redemption shall be mailed by first class mail at least 30 but not more than 60 days
before the Redemption Date to each Holder to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a Redemption Date if the notice is
issued in connection with a satisfaction and discharge of this Indenture. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall state the portion
of the principal amount thereof to be redeemed.




          The notice shall identify the Notes to be redeemed (including the CUSIP, ISIN or other
number(s) thereof) and shall state:




          (1) the Redemption Date;




          (2) the Redemption Price (if then determinable and otherwise the method for its computation)
and the amount of accrued interest, if any, to be paid;




          (3) that, if any Note is being redeemed in part, the portion of the principal amount (equal to
$2,000 in principal amount or any integral multiple of $1,000 in excess thereof) of such Note to



42









 






be redeemed and that, on and after the Redemption Date, upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion thereof will be issued;




          (4) the name, address and telephone number of the Paying Agent;




          (5) that Notes called for redemption must be surrendered to the Paying Agent at the address
specified to collect the Redemption Price plus accrued interest, if any;




          (6) that, unless the Issuer defaults in making the redemption payment, interest on Notes
called for redemption ceases to accrue on and after the Redemption Date and the only remaining
right of the Holders is to receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;




          (7) the subparagraph of the Notes pursuant to which the Notes called for redemption are being
redeemed; and




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




Section 3.04. Effect of Notice of Redemption.




          Once the notice of redemption described in Section 3.03 hereof is mailed, Notes called for
redemption become due and payable on the Redemption Date and at the Redemption Price, including any
premium, plus accrued interest to the Redemption Date, if any. Upon surrender to the Paying Agent,
such Notes shall be paid at the Redemption Price, including any premium, plus accrued interest to
the Redemption Date, if any; provided that if the Redemption Date is after a Record Date and on or
prior to the Interest Payment Date, the accrued interest shall be payable to the Holder of the
redeemed Notes registered on the relevant Record Date.




Section 3.05. Deposit of Redemption Price.




          (a) No later than 10:00 a.m., New York City time, on each Redemption Date, the Issuer shall
have deposited with the Paying Agent in immediately available funds U.S. legal tender sufficient to
pay the Redemption Price of and accrued interest on all Notes to be redeemed on that date.




          (b) On and after any Redemption Date, if U.S. legal tender sufficient to pay the Redemption
Price of and accrued interest on Notes called for redemption shall have been made available in
accordance with clause (a), the Notes called for redemption will cease to accrue interest and the
only right of the Holders of such Notes will be to receive payment of the Redemption Price of and,
subject to the first proviso in Section 3.04, accrued and unpaid interest on such Notes to the
Redemption Date. If any Note called for redemption shall not be so paid, interest will continue to
accrue and be paid, from the Redemption Date until such redemption payment is made, on the unpaid
principal of the Note and any interest not paid on such unpaid principal, in each case, at the rate
and in the manner provided for in Section 2.12 hereof.




43









 








Section 3.06. Notes Redeemed in Part.




          Upon surrender of a Note that is redeemed in part, the Trustee shall authenticate for a Holder
a new Note equal in principal amount to the unredeemed portion of the Note surrendered.




ARTICLE 4




COVENANTS




Section 4.01. Payment of Notes.




          The Issuer shall pay the principal of and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal or interest shall be
considered paid on the date it is due if by 10:00 a.m., New York City time, the Trustee or Paying
Agent holds, for the benefit of the Holders, on that date U.S. legal tender designated for and
sufficient to pay such installment in full.




          The Issuer shall pay interest on overdue principal and interest on overdue interest, to the
extent lawful as provided for in Section 2.12 hereof.




Section 4.02. Reports to Holders.




          Whether or not required by the Commission, so long as any Notes are outstanding, the Issuer
will furnish to the Holders of Notes, or file electronically with the Commission through the
Commission’s Electronic Data Gathering, Analysis and Retrieval System (or any successor system),
within the time periods applicable to the Issuer under Section 13(a) or 15(d) of the Exchange Act:





     (1) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Issuer were required
to file these Forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and, with respect to the annual information only, a
report on the annual financial statements by the Issuer’s certified independent accountants;
and




     (2) all current reports that would be required to be filed with the Commission on Form
8-K if the Issuer were required to file these reports.



          In addition, whether or not required by the Commission, the Issuer will file a copy of all of
the information and reports referred to in clauses (1) and (2) above with the Commission for public
availability within the time periods specified in the Commission’s rules and regulations (unless
the Commission will not accept the filing) and make the information available to securities
analysts and prospective investors upon request. For so long as any Notes remain outstanding, the
Issuer will furnish to the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities
Act.




          The Issuer shall also comply with the provisions of Section 314(a) of the TIA.




          Should the Issuer deliver to the Trustee any such information, reports or certificates or any
annual reports, information, documents and other reports pursuant to Section 314(a) of the Trust
Indenture Act, delivery of such information, reports or certificates or any annual reports,
information,





44









 







documents and other reports to the Trustee is for informational purposes only and the
Trustee’s receipt of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the Issuer’s compliance with
any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on
Officers’ Certificates).




Section 4.03. Waiver of Stay, Extension or Usury Laws.




          The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law which would
prohibit or forgive the Issuer from paying all or any portion of the principal of and/or interest
on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture or the Security Documents; and
(to the extent that it may lawfully do so) the Issuer hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.




Section 4.04. Compliance Certificate; Notice of Default; Tax Information.




          (a) The Issuer shall deliver to the Trustee, within 90 days after the end of its fiscal year,
an Officers’ Certificate (one of the signers of which shall be the principal executive officer,
principal financial officer or principal accounting officer of the Issuer) stating that a review of
the activities of the Issuer and the Guarantors during such fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the Issuer and the
Guarantors have kept, observed, performed and fulfilled their obligations under this Indenture and
the Security Documents, and further stating, as to each such Officer signing such certificate, that
to the best of his or her knowledge the Issuer and the Guarantors have kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and the Security Documents and
are not in default in the performance or observance of any of the terms, provisions and conditions
hereof or thereof (or, if a Default or Event of Default shall have occurred, describing all or such
Defaults or Events of Default of which he or she may have knowledge and what action each is taking
or proposes to take with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the principal of or
interest, if any, on the Notes are prohibited or if such event has occurred, a description of the
event and what action the Issuer is taking or proposes to take with respect thereto. The Officers’
Certificate shall also notify the Trustee should the Issuer elect to change the manner in which it
fixes its fiscal year end.




          (b) (i) If any Default or Event of Default has occurred and is continuing or (ii) if any
Holder seeks to exercise any remedy hereunder with respect to a claimed default under this
Indenture, the Security Documents or the Notes, the Issuer shall deliver to the Trustee, at its
address set forth in Section 11.02 hereof, by registered or certified mail or facsimile
transmission followed by hard copy by overnight courier, registered or certified mail an Officers’
Certificate specifying such Default or Event of Default, notice or other action, the status thereof
and what action the Issuer is taking or proposes to take within five Business Days of their
becoming aware of such occurrence.




          (c) The Issuer, or one of its representatives, agents or employees, shall calculate and
deliver to the Trustee all OID information to be reported by the Trustee to Holders as required by
applicable law.




45









 








Section 4.05. Payment of Taxes and Other Claims.




          The Issuer shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all material taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied or imposed upon it or
any of its Subsidiaries or properties of it or any of its Subsidiaries and (ii) all lawful claims
for labor, materials and supplies that, if unpaid, might by law become a Lien upon the property of
it or any of its Subsidiaries; provided, however, that the Issuer shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent required under GAAP,
have been taken.




Section 4.06. Corporate Existence.




          Subject to Article 5 hereof, the Issuer shall each do or cause to be done all things necessary
to preserve and keep in full force and effect (i) its corporate existence, and the corporate,
partnership or limited liability company or other existence of each Subsidiary, in accordance with
the respective organizational documents (as the same may be amended from time to time) of each
Subsidiary and (ii) the material rights (charter and statutory), licenses and franchises of the
Issuer and its Subsidiaries except where the failure to preserve and keep in full force and effect
any such rights, licenses and franchise shall not have a material adverse effect on the financial
condition, business, operations or prospects of the Issuer and its Subsidiaries taken as a whole;
provided that the Issuer shall not be required to preserve any such right, license or franchise, or
the corporate, limited liability company, partnership or other existence of any of its
Subsidiaries, if the Board of Directors of the Issuer shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Issuer and its Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material respect to the Holders.




Section 4.07. Maintenance of Office or Agency.




          The Issuer shall maintain an office or agency where Notes may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer hereby initially
designates as such agency the Corporate Trust Office of the Trustee. The Issuer shall give prompt
written notice to the Trustee of any change in the location, of such office or agency.




          The Issuer may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations. The Issuer shall give prompt written notice to the Trustee of such
designation or rescission and of any change in the location of any such other office or agency.
The Issuer hereby initially designates the Corporate Trust Office as one such additional office.




Section 4.08. Compliance with Laws.




          The Issuer shall comply, and shall cause each of its Subsidiaries to comply, with all
applicable statutes, rules, regulations, orders and restrictions of the United States of America,
all states and municipalities thereof, and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the foregoing, in respect of the
conduct of their respective businesses and the ownership of their respective properties, except for
such noncompliances as would not





46









 







in the aggregate have a material adverse effect on the financial condition or results of
operations of the Issuer and its Subsidiaries taken as a whole.




Section 4.09. Maintenance of Properties and Insurance.




          (a) The Issuer shall cause all material properties owned by or leased by it or any of its
Subsidiaries used or useful to the conduct of the Issuer’s business or the business of any of its
Subsidiaries to be maintained and kept in normal condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may be necessary, so
that the business carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section 4.09(a) shall prevent the Issuer or
any of its Subsidiaries from discontinuing the use, operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is, in the judgment of
the Board of Directors of the Issuer or of the Board of Directors of any Subsidiary of the Issuer
concerned, or of an Officer (or other agent employed by the Issuer or of any of its Subsidiaries)
of the Issuer or any of its Subsidiaries having managerial responsibility for any such property,
desirable in the conduct of the business of the Issuer or any Subsidiary of the Issuer, and if such
discontinuance or disposal is not adverse in any material respect to the Holders.




          (b) The Issuer shall maintain, and shall cause its respective Subsidiaries to maintain,
insurance with responsible carriers against such risks and in such amounts, and with such
deductibles, retentions, self-insured amounts and co-insurance provisions, as are customarily
carried by corporations operating assets of a similar nature in the same or similar localities,
including property and casualty loss, workers’ compensation and interruption of business insurance.




Section 4.10. Limitations on Additional Indebtedness.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, incur any Indebtedness; provided that the Issuer or any Guarantor may incur additional
Indebtedness if, after giving effect thereto, the Consolidated Interest Coverage Ratio would be at
least 2.00 to 1.00 (the “Coverage Ratio Exception”).




          (b) Notwithstanding the above, each of the following shall be permitted (the “Permitted
Indebtedness”):





     (1) Indebtedness of the Issuer and any Guarantor under Credit Facilities in an
aggregate amount at any time outstanding not to exceed $675.0 million;




     (2) Indebtedness under (a) the Notes and the Note Guarantees initially issued on the
Issue Date and (b) the Exchange Notes and the Note Guarantees in respect thereof to be
issued pursuant to the Registration Rights Agreement;




     (3) Indebtedness of the Issuer and the Restricted Subsidiaries to the extent
outstanding on the Issue Date after giving effect to the intended use of proceeds of the
Notes (other than Indebtedness referred to in other clauses of this Section 4.10(b));




     (4) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes
of the Issuer or any Restricted Subsidiary and not for the purpose of speculation;



47









 






provided that in the case of Hedging Obligations relating to interest rates, (a) such
Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be
incurred by this Section 4.10, and (b) the notional principal amount of such Hedging
Obligations at the time incurred does not exceed the principal amount of the Indebtedness to
which such Hedging Obligations relate;




     (5) Indebtedness of the Issuer owed to a Restricted Subsidiary and Indebtedness of any
Restricted Subsidiary owed to the Issuer or any other Restricted Subsidiary; provided,
however, that upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or
such Indebtedness being owed to any Person other than the Issuer or a Restricted Subsidiary,
the Issuer or such Restricted Subsidiary, as applicable, shall be deemed to have incurred
Indebtedness not permitted by this clause (5);




     (6) Indebtedness in respect of (a) self-insurance obligations or completion, customs,
stay, bid, performance, appeal or surety bonds or other obligations of a like nature issued
for the account of the Issuer or any Restricted Subsidiary in the ordinary course of
business, including guarantees or obligations of the Issuer or any Restricted Subsidiary
with respect to letters of credit supporting such self-insurance, completion, customs, stay,
bid, performance, appeal or surety obligations (in each case other than for an obligation
for money borrowed) or (b) obligations represented by letters of credit issued in the
ordinary course of business, including letters of credit in order to provide security for
workers’ compensation claims, for the account of the Issuer or any Restricted Subsidiary, as
the case may be;




     (7) Purchase Money Indebtedness incurred by the Issuer or any Restricted Subsidiary
after the Issue Date, and Refinancing Indebtedness in respect thereof, in an aggregate
principal amount not to exceed at any time outstanding the greater of (a) $75.0 million and
(b) 3.0% of the Issuer’s Consolidated Tangible Assets;




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




     (9) Indebtedness arising in connection with endorsement of instruments for deposit in
the ordinary course of business;




     (10) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to the
Coverage Ratio Exception or clause (2) or (3) above, this clause (10) or clause (15) below;




     (11) indemnification, adjustment of purchase price, earn-out or similar obligations, in
each case, incurred or assumed in connection with the acquisition or disposition of any
business or assets of the Issuer or any Restricted Subsidiary or Equity Interests of a
Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Equity Interests for the purpose of
financing or in contemplation of any such acquisition; provided that, in the case of a
disposition, the maximum aggregate liability in respect of all such obligations outstanding
under this clause (11) shall at no time exceed the gross proceeds actually received by the
Issuer and the Restricted Subsidiaries in connection with such disposition;



48









 






     (12) Contingent Obligations of the Issuer and the Guarantors in respect of Indebtedness
otherwise permitted under this Section 4.10;




     (13) Indebtedness in respect of insurance premium financing for insurance being
acquired by the Issuer or a Restricted Subsidiary under customary terms and conditions;




     (14) Indebtedness of Foreign Restricted Subsidiaries in an aggregate amount outstanding
at any one time not to exceed 15.0% of the aggregate Consolidated Tangible Assets of all of
the Foreign Restricted Subsidiaries;




     (15) Permitted Acquisition Indebtedness; and




     (16) additional Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate
principal amount not to exceed at any time outstanding the greater of (a) $50.0 million and
(b) 3.0% of the Issuer’s Consolidated Tangible Assets.



     For purposes of determining compliance with this covenant, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness
described in clauses (1) through (16) above or is entitled to be incurred pursuant to the Coverage
Ratio Exception, the Issuer shall, in its sole discretion, classify such item of Indebtedness and
may divide and classify such Indebtedness in more than one of the types of Indebtedness described,
except that Indebtedness outstanding under the Credit Agreement on the Issue Date shall be deemed
to have been incurred under clause (1) above, and may later reclassify any item of Indebtedness
described in clauses (1) through (16) above (provided that at the time of reclassification it meets
the criteria in such category or categories). In addition, for purposes of determining any
particular amount of Indebtedness under this covenant, guarantees, Liens or letter of credit
obligations supporting Indebtedness otherwise included in the determination of such particular
amount shall not be included so long as incurred by a Person that could have incurred such
Indebtedness.



Section 4.11. Limitations on Restricted Payments.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, make any Restricted Payment if at the time of such Restricted Payment:





     (1) a Default shall have occurred and be continuing or shall occur as a consequence
thereof;




     (2) after giving pro forma effect to such Restricted Payment as if such Restricted
Payment had been made at the beginning of the applicable Four Quarter Period, the Issuer is
not able to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to the Coverage Ratio Exception; or




     (3) the amount of such Restricted Payment, when added to the aggregate amount of all
other Restricted Payments made after the Issue Date (other than Restricted Payments made
pursuant to clauses (2), (3), (4), (5), (6) or (9) of clause (b) of this Section 4.11),
exceeds the sum (the “Restricted Payments Basket”) of (without duplication):




          (A) 50% of Consolidated Net Income for the period (taken as one accounting period)
commencing on the first day of the fiscal quarter in which the Issue Date occurs to and



49









 






including the last day of the fiscal quarter ended immediately prior to the date of
such calculation for which consolidated financial statements are available (or, if such
Consolidated Net Income shall be a deficit, minus 100% of such deficit), plus




          (B) 100% of (A) (i) the aggregate net cash proceeds and (ii) the Fair Market Value of
(x) marketable securities (other than marketable securities of the Issuer), (y) Equity
Interests of a Person (other than the Issuer or an Affiliate of the Issuer) engaged in a
Permitted Business and (z) other assets used in any Permitted Business, in the case of
clauses (i) and (ii), received by the Issuer since the Issue Date as a contribution to its
common equity capital or from the issue or sale of Qualified Equity Interests of the Issuer
or from the issue or sale of convertible or exchangeable Disqualified Equity Interests or
convertible or exchangeable debt securities of the Issuer that have been converted into or
exchanged for such Qualified Equity Interests (other than Equity Interests or debt
securities sold to a Subsidiary of the Issuer), (B) the aggregate net cash proceeds, if any,
received by the Issuer or any of its Restricted Subsidiaries upon any conversion or exchange
described in clause (A) above and (C) the aggregate net cash proceeds of the underwritten
common stock offering completed by the Issuer on September 30, 2009, plus




          (C) 100% of (A) the aggregate amount by which Indebtedness (other than any Subordinated
Indebtedness) of the Issuer or any Restricted Subsidiary is reduced on the Issuer’s
consolidated balance sheet upon the conversion or exchange after the Issue Date of any such
Indebtedness into or for Qualified Equity Interests of the Issuer and (B) the aggregate net
cash proceeds, if any, received by the Issuer or any of its Restricted Subsidiaries upon any
conversion or exchange described in clause (A) above, plus




          (D) with respect to Restricted Investments made by the Issuer and its Restricted
Subsidiaries after the Issue Date, an amount equal to the sum, without duplication, of (A)
the net reduction in such Restricted Investments in any Person resulting from (i) repayments
of loans or advances, or other transfers of assets, in each case to the Issuer or any
Restricted Subsidiary, (ii) other repurchases, repayments or redemptions of such Restricted
Investments, (iii) the sale of any such Restricted Investment to a purchaser other than the
Issuer or a Subsidiary or (iv) the release of any guarantee (except to the extent any
amounts are paid under such guarantee) that constituted a Restricted Investment plus (B)
with respect to any Unrestricted Subsidiary designated as such after the Issue Date and
redesignated as a Restricted Subsidiary after the Issue Date, the Fair Market Value of the
Issuer’s Investment in such Subsidiary held by the Issuer or any of its Restricted
Subsidiaries at the time of such redesignation.



          (b) Notwithstanding the foregoing, the provisions set forth in clause (a) of this Section 4.11
will not prohibit:





     (1) the payment of (a) any dividend or redemption payment or the making of any
distribution within 60 days after the date of declaration thereof if, on the date of
declaration, the dividend, redemption or distribution payment, as the case may be, would
have complied with the provisions of this Indenture or (b) any dividend or similar
distribution by a Restricted Subsidiary to the holders of its Equity Interests on a pro rata
basis;




     (2) the redemption or acquisition of any Equity Interests of the Issuer or any
Restricted Subsidiary in exchange for, or out of the proceeds of the substantially
concurrent issuance and sale of, Qualified Equity Interests;




50












 






     (3) the purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Indebtedness of the Issuer or any Restricted Subsidiary (including
the payment of any required premium and any fees and expenses incurred in connection with
such purchase, repurchase, redemption, defeasance, other acquisition or retirement for
value) (a) in exchange for, or out of the proceeds of the substantially concurrent issuance
and sale of, Qualified Equity Interests, (b) in exchange for, or out of the proceeds of the
substantially concurrent incurrence of, Refinancing Indebtedness permitted to be incurred
under Section 4.10 and the other terms of this Indenture or (c) upon a Change of Control or
in connection with an Asset Sale to the extent required by the agreement governing such
Subordinated Indebtedness but only if the Issuer shall have complied with Section 4.12 and
Section 4.15 and purchased all Notes validly tendered pursuant to the relevant offer prior
to purchasing, repurchasing, redeeming, defeasing or acquiring or retiring for value such
Subordinated Indebtedness;




     (4) the redemption, repurchase or other acquisition or retirement for value of Equity
Interests of the Issuer held by officers, directors or employees or former officers,
directors or employees (or their transferees, estates or beneficiaries under their estates),
either (x) upon any such individual’s death, disability, retirement, severance or
termination of employment or service or (y) pursuant to any equity subscription agreement,
stock option agreement, stockholders’ agreement or similar agreement; provided, in any case,
that the aggregate cash consideration paid for all such redemptions, repurchases or other
acquisitions or retirements shall not exceed (A) $10.0 million during any calendar year
(with unused amounts in any calendar year being carried forward to the next succeeding
calendar year but not any subsequent years) plus (B) the amount of any net cash proceeds
received by or contributed to the Issuer from the issuance and sale after the Issue Date of
Qualified Equity Interests of the Issuer to its officers, directors or employees that have
not been applied to the payment of Restricted Payments pursuant to this clause (4), plus (C)
the net cash proceeds of any “key-man” life insurance policies that have not been applied to
the payment of Restricted Payments pursuant to this clause (4);




     (5) (a) repurchases, redemptions or other acquisitions or retirements for value of
Equity Interests deemed to occur upon the exercise of stock options, warrants, rights to
acquire Equity Interests or other convertible securities to the extent such Equity Interests
represent a portion of the exercise or exchange price thereof and (b) any repurchases,
redemptions or other acquisitions or retirements for value of Equity Interests made in lieu
of withholding taxes in connection with any exercise or exchange of stock options, warrants
or other similar rights;




     (6) dividends on Preferred Stock or Disqualified Equity Interests issued in compliance
with Section 4.10 to the extent such dividends are included in the definition of
Consolidated Interest Expense;




     (7) the payment of cash in lieu of fractional Equity Interests;




     (8) payments or distributions to dissenting stockholders pursuant to applicable law in
connection with a merger, consolidation or transfer of assets that complies with the
provisions of Article 5; or




     (9) payment of other Restricted Payments in an aggregate amount not to exceed $25.0
million;



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provided that (a) in the case of any Restricted Payment pursuant to clauses (3), (4) or (9) above,
no Default shall have occurred and be continuing or occur as a consequence thereof and (b) no
issuance and sale of Qualified Equity Interests used to make a payment pursuant to clauses (2), (3)
or (4)(B) above shall increase the Restricted Payments Basket.



Section 4.12. Limitations on Asset Sales.




          (a) The Issuer will not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale unless:





     (1) the Issuer or such Restricted Subsidiary receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the assets included in such Asset
Sale; and




     (2) (a) at least 75% of the total consideration in such Asset Sale consists of cash or
Cash Equivalents or (b) the Fair Market Value of all forms of consideration other than cash
and Cash Equivalents received for all Asset Sales since the Issue Date does not exceed in
the aggregate 10.0% of the Consolidated Tangible Assets of the Issuer at the time such
determination is made.




     For purposes of clause (2), the following shall be deemed to be cash:




     (A) the amount (without duplication) of any Indebtedness (other than Subordinated
Indebtedness, Disqualified Equity Interests, or Indebtedness owed to an Affiliate of the
Issuer) of the Issuer or such Restricted Subsidiary that is delivered to the Issuer or such
Restricted Subsidiaries as consideration for such Asset Sale and promptly retired or
extinguished without payment, or that is expressly assumed by the transferee of any such
assets pursuant to (i) a written novation agreement that releases the Issuer or such
Restricted Subsidiary from further liability therefor or (ii) an assignment agreement that
includes, in lieu of such a release, the agreement of the transferee or its parent company
to indemnify and hold harmless the Issuer or such Restricted Subsidiary from and against any
loss, liability or cost in respect of such assumed liability,




     (B) the amount of any obligations received from such transferee that are within 60 days
after such Asset Sale converted by the Issuer or such Restricted Subsidiary into cash (to
the extent of the cash actually so received), and




     (C) the Fair Market Value of (i) any assets (other than securities) received by the
Issuer or any Restricted Subsidiary to be used by it in a Permitted Business, (ii) Equity
Interests acquired in a Person that is a Restricted Subsidiary or in a Person engaged in a
Permitted Business that shall become a Restricted Subsidiary immediately upon the
acquisition of such Person by the Issuer or a Restricted Subsidiary or (iii) a combination
of (i) and (ii).



          (b) If at any time any non-cash consideration received by the Issuer or any Restricted
Subsidiary, as the case may be, in connection with any Asset Sale is repaid or converted into or
sold or otherwise disposed of for cash (other than interest received with respect to any such
non-cash consideration), then the date of such repayment, conversion or disposition shall be deemed
to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be
applied in accordance with this Section 4.12.



52









 







          (c) Any Asset Sale pursuant to a condemnation, appropriation or other similar taking,
including by deed in lieu of condemnation, or pursuant to the foreclosure or other enforcement of a
Permitted Lien or exercise by the related lienholder of rights with respect thereto, including by
deed or assignment in lieu of foreclosure, shall not be required to satisfy the conditions set
forth in subclauses (1) and (2) of clause (a) of this Section 4.12.




          (d) Notwithstanding the foregoing, the 75% limitation referred to above shall be deemed
satisfied with respect to any Asset Sale in which the cash or Cash Equivalents portion of the
consideration received therefrom, determined in accordance with the provisions of Section 4.12(a)
on an after-tax basis, is equal to or greater than what the after-tax proceeds would have been had
such Asset Sale complied with the aforementioned 75% limitation.




          (e) If the Issuer or any Restricted Subsidiary engages in an Asset Sale, the Issuer or such
Restricted Subsidiary shall, no later than 365 days following the consummation thereof, apply all
or any of the Net Available Proceeds therefrom to:





     (i) if a Collateral Suspension is in effect at the time of the relevant Asset Sale,
prepay, repay, redeem, defease or purchase Indebtedness of the Issuer or a Restricted
Subsidiary (other than Disqualified Equity Interests, Subordinated Indebtedness or
Indebtedness owed to the Issuer or an Affiliate of the Issuer);




     (ii) satisfy all mandatory repayment obligations under Credit Facilities arising by
reason of such Asset Sale;




     (iii) repay any Indebtedness which was secured by the assets sold in such Asset Sale;
and/or




     (iv) (A) make any capital expenditure or otherwise invest all or any part of the Net
Available Proceeds thereof in the purchase of assets (other than securities) to be used by
the Issuer or any Restricted Subsidiary in the Permitted Business, (B) acquire Qualified
Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a
Permitted Business that shall become a Restricted Subsidiary immediately upon the
consummation of such acquisition or (C) a combination of (A) and (B).



          (f) The amount of Net Available Proceeds not applied or invested as provided in the preceding
clause (e) shall constitute “Excess Proceeds.”




          (g) When the aggregate amount of Excess Proceeds equals or exceeds $30.0 million, the Issuer
shall be required to make an offer to purchase from all Holders and, if applicable, purchase or
redeem (or make an offer to do so) any Pari Passu Indebtedness of the Issuer the provisions of
which require the Issuer to purchase or redeem such Indebtedness with the proceeds from any Asset
Sales (or offer to do so), in an aggregate principal amount of Notes and such Pari Passu
Indebtedness equal to the amount of such Excess Proceeds as follows:





     (1) the Issuer will (a) make an offer to purchase (a “Net Proceeds Offer”) to
all Holders in accordance with the procedures set forth in this Indenture, and (b) purchase
or redeem (or make an offer to do so), pro rata in proportion to the respective principal
amounts of the Notes and such other Indebtedness required to be purchased or redeemed, the
maximum principal



53









 






amount of Notes and Pari Passu Indebtedness that may be purchased or
redeemed out of the amount (the “Payment Amount”) of such Excess Proceeds;




     (2) the offer price for the Notes will be payable in cash in an amount equal to 100% of
the principal amount of the Notes tendered pursuant to a Net Proceeds Offer, plus accrued
and unpaid interest and Liquidated Damages thereon, if any, to the date such Net Proceeds
Offer is consummated (the “Offered Price”), in accordance with the procedures set
forth in this Indenture, and the purchase or redemption price for such Pari Passu
Indebtedness (the “Pari Passu Indebtedness Price”) shall be as set forth in the
related documentation governing such Indebtedness;




     (3) if the aggregate Offered Price of Notes validly tendered and not withdrawn by
Holders thereof exceeds the pro rata portion of the Payment Amount allocable to the Notes,
Notes to be purchased will be selected on a pro rata basis; and




     (4) upon completion of such Net Proceeds Offer in accordance with the foregoing
provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was
made shall be deemed to be zero.



          (h) To the extent that the sum of the aggregate Offered Price of Notes tendered pursuant to a
Net Proceeds Offer and the aggregate Pari Passu Indebtedness Price paid to the holders of such Pari
Passu Indebtedness is less than the Payment Amount relating thereto (such shortfall constituting a
“Net Proceeds Deficiency”), the Issuer may use the Net Proceeds Deficiency, or a portion
thereof, for any purposes not otherwise prohibited by the provisions of this Indenture.




          (i) Notwithstanding the foregoing, the sale, conveyance or other disposition of all or
substantially all of the assets of the Issuer and its Restricted Subsidiaries, taken as a whole,
will be governed by the provisions of Section 4.15 and/or the provisions of Article 5 and not by
the provisions of this Section 4.12.




     (j) Upon the commencement of a Net Proceeds Offer, the Issuer must send by first-class mail, a
notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the such
Offer. Such notice shall state:




     (1) that such Offer is being made pursuant to this Section 4.12;




     (2) the Offered Price and the Offer Payment Date;




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




     (4) that, unless the Issuer defaults in the payment of the Offered Price, any Notes
accepted for payment pursuant to such Offer shall cease to accrue interest after the Offer
Payment Date;




     (5) that such Offer shall remain open for at least 20 Business Days or for such longer
period as is required by law and that Holders accepting the offer to have their Notes
purchased pursuant to such Offer shall be required to surrender the Notes, with the form
entitled “Option of the Holder to Elect Purchase” on the reverse of the Note completed, to
the Paying Agent at the



54









 






address specified in the notice prior to the close of business on
the third Business Day preceding the Offer Payment Date;




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




     (7) that Holders whose Notes are being purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered;




     (8) any other procedures that a Holder must follow to accept such Offer or effect
withdrawal of such acceptance; and




     (9) the name and address of the Paying Agent.



          (k) The Issuer shall publicly announce the results of a Net Proceeds Offer as soon as
practicable after the related Offer Payment Date.




          (l) On the Offer Payment Date, the Issuer shall, to the extent lawful, (1) accept for payment
all Notes or portions of Notes properly tendered pursuant to the Net Proceeds Offer, or such lesser
amount thereof as the Issuer is required to purchase pursuant to this Section 4.12, (2) deposit
with the Paying Agent an amount equal to the Offered Price in respect of all Notes or portions of
Notes properly tendered and accepted for payment, and (3) deliver or cause to be delivered to the
Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the Issuer.




          (m) After the Issuer’s satisfaction of its obligations under the preceding clause (l), the
Paying Agent shall as promptly as practicable mail to each Holder of Notes properly tendered the
Offered Price for such Notes, and the Trustee shall as promptly as practicable authenticate and mail to each Holder a
new Note in principal amount equal to any unpurchased portion of the Notes surrendered, if any;
provided, however, that each such new Note shall be in a principal amount of $2,000 or an integral
multiple of $1,000.




          The Issuer shall comply with applicable tender offer rules, including the requirements of Rule
14e-1 under the Exchange Act and any other applicable laws and regulations in connection with the
purchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.12, the Issuer shall comply with the
applicable securities laws and regulations and will not be deemed to have breached its obligations
under this Section 4.12 by virtue of this compliance.



Section 4.13. Limitations on Transactions with Affiliates.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, in one transaction or a series of related transactions involving aggregate payments or
consideration in excess of $1.0 million, sell, lease, transfer or otherwise dispose of any of its
assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (an “Affiliate
Transaction”), unless:



55









 







          (1) such Affiliate Transaction is on terms that are not materially less favorable to
the Issuer or the relevant Restricted Subsidiary than those that would have been obtained in
a comparable transaction at such time on an arm’s-length basis by the Issuer or that
Restricted Subsidiary from a Person that is not an Affiliate of the Issuer or that
Restricted Subsidiary; and




          (2) the Issuer delivers to the Trustee:





          (a) with respect to any Affiliate Transaction involving aggregate value in
excess of $20.0 million, an Officers’ Certificate certifying that such Affiliate
Transaction complies with clause (1) above and a Secretary’s Certificate which sets
forth and authenticates a resolution that has been adopted by the Independent
Directors approving such Affiliate Transaction; and




          (b) with respect to any Affiliate Transaction involving aggregate value of
$50.0 million or more, the certificates described in the preceding clause (a) and a
written opinion as to the fairness of such Affiliate Transaction to the Issuer or
such Restricted Subsidiary from a financial point of view issued by an Independent
Financial Advisor to the Board of Directors of the Issuer.




(b) The foregoing restrictions shall not apply to:




(1) transactions exclusively between or among (a) the Issuer and one or more
Restricted Subsidiaries or (b) Restricted Subsidiaries;




(2) reasonable director, officer and employee compensation (including bonuses)
and other benefits (including pursuant to any employment agreement or any
retirement, health, stock option or other benefit plan) and indemnification and
insurance arrangements, in each case, as determined in good faith by the Issuer’s
Board of Directors or senior management;




(3) the entering into of a tax sharing agreement, or payments pursuant thereto,
between the Issuer and/or one or more Subsidiaries, on the one hand, and any other
Person with which the Issuer or such Subsidiaries are required or permitted to file
a consolidated tax return or with which the Issuer or such Subsidiaries are part of
a consolidated group for tax purposes to be used by such Person to pay taxes, and
which payments by the Issuer and the Restricted Subsidiaries are not in excess of
the tax liabilities that would have been payable by them on a stand-alone basis;




(4) any Permitted Investments;




(5) any Restricted Payments which are made in accordance with Section 4.11;




(6) (x) any agreement in effect on the Issue Date, as in effect on the Issue
Date or as thereafter amended or replaced in any manner that, taken as a whole, is
not more disadvantageous to the Holders or the Issuer in any material respect than
such agreement as it was in effect on the Issue Date or (y) any transaction pursuant
to any agreement referred to in the immediately preceding clause (x);



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(7) any transaction with a Person (other than an Unrestricted Subsidiary) which
would constitute an Affiliate of the Issuer solely because the Issuer or a
Restricted Subsidiary owns an equity interest in or otherwise controls such Person;
and




(8) (a) any transaction with an Affiliate where the only consideration paid by
the Issuer or any Restricted Subsidiary is Qualified Equity Interests of the Issuer
or (b) the issuance or sale of any Qualified Equity Interests of the Issuer.


Section 4.14. Limitation on Liens.



The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
create, incur, assume or permit or suffer to exist any Lien (other than Permitted Liens) of any
nature whatsoever against any assets of the Issuer or any Restricted Subsidiary (including Equity
Interests of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired,
which Lien secures Indebtedness or trade payables. Notwithstanding anything to the contrary
contained in this Indenture or the Security Documents, the Issuer will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, pledge any Equity Interest of the Issuer
or any of the Restricted Subsidiaries to secure Indebtedness of the Issuer or any Subsidiary
Guarantor, other than Liens securing the Notes or any Senior Obligation and as otherwise required
as a matter of law.



Section 4.15. Change of Control.




          (a) Upon the occurrence of any Change of Control, unless the Issuer has previously or
concurrently exercised its right to redeem all of the Notes as described in paragraph 5 of the
Notes, each Holder will have the right to require that the Issuer purchase all or any portion
(equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes for a
cash price (the “Change of Control Purchase Price”) equal to 101% of the principal amount
of the Notes to be purchased, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon 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).




          (b) Within 30 days following the date on which the Change of Control occurs, the Issuer must
send by first-class mail a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. Such notice shall state:





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




     (2) the description of the transaction or transactions that constitute the Change of
Control;




     (3) the Change of Control Purchase Price and the purchase date (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date such notice is
mailed (the “Change of Control Payment Date”));




     (4) that any Note not tendered shall continue to accrue interest;



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     (5) that, unless the Issuer defaults in the payment of the Change of Control Purchase
Price, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date;




     (6) that such Change of Control Offer shall remain open for at least 20 Business Days
or for such longer period as is required by law and that Holders accepting the offer to have
their Notes purchased pursuant to a Change of Control Offer shall be required to surrender
the Notes, with the form entitled “Option of the Holder to Elect Purchase” on the reverse of
the Note completed, to the Paying Agent at the address specified in the notice prior to the
close of business on the third Business Day preceding the Change of Control Payment Date;




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




     (8) that Holders whose Notes are being purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered;




     (9) any other procedures that a Holder must follow to accept a Change of Control Offer
or effect withdrawal of such acceptance; and




     (10) the name and address of the Paying Agent.



          (c) The Issuer shall publicly announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.




          (d) On the Change of Control Payment Date, the Issuer shall, to the extent lawful, (1) accept
for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control
Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Purchase Price in
respect of all Notes or portions of Notes properly tendered and accepted for payment, and (3)
deliver or cause to be delivered to the Trustee the Notes properly accepted together with an
Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being
purchased by the Issuer.




          (e) The Paying Agent shall as promptly as practicable mail to each Holder of Notes properly
tendered the Change of Control Purchase Price for such Notes, and the Trustee shall as promptly as
practicable authenticate and mail to each Holder a new Note in principal amount equal to any
unpurchased portion of the Notes surrendered, if any; provided, however, that each such new Note
shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.




          (f) The Issuer shall comply with applicable tender offer rules, including the requirements of
Rule 14e-1 under the Exchange Act and any other laws and regulations to the extent such laws and
regulations are applicable in connection with a Change of Control Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of this Section 4.15,
the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed
to have breached its obligations under the provisions of this Section 4.15 by virtue thereof.



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          (g) The provisions of this Section 4.15 that require the Issuer to make a Change of Control
Offer following a Change of Control shall be applicable regardless of whether any other provisions
of this Indenture are applicable to the transaction giving rise to the Change of Control.




          (h) The Issuer’s obligation to make a Change of Control Offer shall be satisfied if a third
party makes the Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the
Issuer and purchases all Notes properly tendered and not withdrawn under such Change of Control
Offer.




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



Section 4.16. Limitations on Dividend and Other Restrictions Affecting Restricted
Subsidiaries.




          The Issuer 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:




          (a) pay dividends or make any other distributions on or in respect of its Equity Interests;




          (b) make loans or advances, or pay any Indebtedness or other obligation owed, to the Issuer or
any other Restricted Subsidiary; or




          (c) transfer any of its assets to the Issuer or any other Restricted Subsidiary;



except for:





     (1) encumbrances or restrictions existing under or by reason of applicable law,
regulation or order;




     (2) encumbrances or restrictions existing under this Indenture, the Security Documents,
the Notes and the Note Guarantees;




     (3) non-assignment provisions of any contract, license or any lease entered into in the
ordinary course of business;




     (4) encumbrances or restrictions existing under agreements existing on this date of
this Indenture (including, without limitation, the Credit Agreement) as in effect on that
date;




     (5) restrictions relating to any Lien permitted under this Indenture imposed by the
holder of such Lien;




     (6) restrictions imposed under any agreement to sell Equity Interests or assets, as
permitted under this Indenture, to any Person pending the closing of such sale;




     (7) any instrument governing Acquired Indebtedness or Equity Interests of a Person
acquired by the Issuer or any of its Restricted Subsidiaries, which encumbrance or
restriction is



59









 





not applicable to any Person, or the properties or assets of any Person,
other than the Person or the properties or assets of the Person so acquired;



     (8) any other agreement governing Indebtedness entered into after the Issue Date that
contains encumbrances and restrictions that are not materially more restrictive with respect
to any Restricted Subsidiary than those in effect on the Issue Date with respect to that
Restricted Subsidiary pursuant to agreements in effect on the Issue Date;




     (9) customary provisions in partnership agreements, limited liability company
organizational governance documents, joint venture agreements and other similar agreements
entered into in the ordinary course of business that restrict the transfer of ownership interests in such
partnership, limited liability company, joint venture or similar Person;




     (10) Purchase Money Indebtedness incurred in compliance with Section 4.10 that imposes
restrictions of the nature described in clause (c) above on the assets acquired;




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




     (12) any encumbrance or restriction applicable only to a Foreign Restricted Subsidiary
in agreements entered into in connection with Indebtedness incurred by such Foreign
Restricted Subsidiary in compliance with subclause (14) of Section 4.10(b);




     (13) Indebtedness incurred or Equity Interests issued by any Restricted Subsidiary;
provided that the restrictions contained in the agreements or instruments governing such
Indebtedness or Equity Interests (a) either (i) apply only in the event of a payment default
or a default with respect to a financial covenant in such agreement or instrument or (ii)
will not materially affect the Issuer’s ability to pay all principal, interest and
Liquidated Damages, if any, on the Notes, as determined in good faith by the Chief Executive
Officer and the Chief Financial Officer of the Issuer, whose determination shall be
conclusive and (b) are not materially more disadvantageous to the Holders of the Notes than
is customary in comparable financings (as determined by the Chief Financial Officer of the
Issuer, whose determination shall be conclusive);




     (14) any encumbrance or restriction existing under Hedging Obligations permitted under
this Indenture; and




     (15) any encumbrances or restrictions imposed by any amendments, refinancings,
modifications, renewals, restatements, increases, supplements or replacements of the
contracts, instruments or obligations referred to in clauses (1) through (14) above;
provided that such amendments, refinancings, modifications, renewals, restatements,
increases, supplements or replacements are, in the good faith judgment of the Issuer’s Board
of Directors, no more materially restrictive with respect to such encumbrances and
restrictions than those prior to such amendment or refinancing.



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Section 4.17. [RESERVED].



Section 4.18. Conduct of Business.




          The Issuer shall engage, and shall cause its Restricted Subsidiaries to engage, only in
businesses that, when considered together as a single enterprise, are primarily the Permitted
Business.



Section 4.19. Limitations on Designation of Unrestricted Subsidiaries.




          (a) The Issuer may designate any Subsidiary (including any newly formed or newly acquired
Subsidiary) of the Issuer as an “Unrestricted Subsidiary” under this Indenture (a “Designation”)
only if:





     (1) no Default shall have occurred and be continuing at the time of or after giving
effect to such Designation; and




     (2) the Issuer would be permitted to make, at the time of such Designation, (a) a
Permitted Investment or (b) an Investment pursuant to clause (a) of Section 4.11, in either
case in an amount (the “Designation Amount”) equal to the Fair Market Value of the
Issuer’s proportionate interest in such Subsidiary on such date.



          (b) No Subsidiary shall be Designated as an “Unrestricted Subsidiary” unless such Subsidiary:





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




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




     (3) is a Person with respect to which neither the Issuer nor any Restricted Subsidiary
has any direct or indirect obligation (a) to subscribe for additional Equity Interests or
(b) to maintain or preserve the Person’s financial condition or to cause the Person to
achieve any specified levels of operating results;




     (4) has not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Issuer or any Restricted Subsidiary, except for any guarantee given
solely to support the pledge by the Issuer or any Restricted Subsidiary of the Equity
Interests of such Unrestricted Subsidiary, which guarantee is not recourse to the Issuer or
any Restricted Subsidiary; and




     (5) unless a Collateral Suspension is in effect, such Subsidiary does not own any
Collateral.



          (c) If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as
an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes
of this Indenture and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary at such time and, if the Indebtedness



61









 






is not permitted to be incurred under Section 4.10 or the Lien is not permitted under Section 4.14,
the Issuer shall be in default of the applicable Section.




          (d) The Issuer may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a
“Redesignation”) only if:





     (1) no Default shall have occurred and be continuing at the time of and after giving
effect to such Redesignation; and




     (2) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding
immediately following such Redesignation would, if incurred or made at such time, have been
permitted to be incurred or made for all purposes of this Indenture.



          (e) All Designations and Redesignations must be evidenced by resolutions of the Board of
Directors of the Issuer, delivered to the Trustee certifying compliance with the foregoing
provisions.



Section 4.20. Additional Note Guarantees.




          If, after the Issue Date, (a) the Issuer or any Restricted Subsidiary shall acquire or create
another Domestic Restricted Subsidiary, or (b) any Unrestricted Subsidiary is Redesignated a
Domestic Restricted Subsidiary, and (in each such case) such Domestic Restricted Subsidiary
guarantees any Indebtedness under any Credit Facility, then the Issuer shall, within 15 Business
Days cause such Domestic Restricted Subsidiary to:





     (1) execute and deliver to the Trustee a supplemental indenture substantially in the
form prescribed by this Indenture pursuant to which such Domestic Restricted Subsidiary
shall unconditionally guarantee all of the Issuer’s obligations under the Notes and this
Indenture; and




     (2) deliver to the Trustee the Opinion of Counsel required by Section 10.07 hereof.


Section 4.21. Limitations on Layering Indebtedness.




          (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any
agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness
of the Issuer or of such Restricted Subsidiary, as the case may be, unless such Indebtedness is
also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly
subordinate in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary,
to the same extent and in the same manner as such Indebtedness is subordinated to such other
Indebtedness of the Issuer or such Restricted Subsidiary, as the case may be.




          (b) For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right
of payment to any other Indebtedness of the Issuer or any Restricted Subsidiary solely by virtue of
being unsecured or secured by a Permitted Lien or by virtue of the fact that the holders of such
Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of
such holders priority over the other holders in the collateral held by them or other payments among
them.



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Section 4.22. Impairment of Security Interest.




          The Issuer shall not, and shall not permit any Restricted Subsidiary to, take or omit to take
any action which would adversely affect or impair in any material respect the Liens in favor of the
Collateral Agent with respect to the Collateral, except as otherwise permitted or required by the
Security Documents or this Indenture.



Section 4.23. Termination of Covenants




          (a) During any period of time that the Notes have a Moody’s rating of “Baa3” or higher and an
S&P rating of “BBB-” or higher (each, an “Investment Grade Rating”) and no Default has
occurred and is then continuing, the Issuer and the Restricted Subsidiaries will not be subject to
the following covenants: Section 4.10, Section 4.11, Section 4.12, Section 4.13, Section 4.16,
Section 4.18, Section 4.20, Section 4.21 and Section 5.01(a)(3) (collectively, the “Suspended
Covenants”).




          (b) In the event that the Issuer and the Restricted Subsidiaries are not subject to the
Suspended Covenants for any period of time as a result of the preceding sentence and, subsequently,
one or both of the Rating Agencies, as applicable, withdraws its ratings or downgrades the ratings
assigned to the Notes such that the Notes do not have an Investment Grade Rating, then the Issuer
and the Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants, it
being understood that no actions taken by (or omissions of) the Issuer or any of its Restricted
Subsidiaries during the suspension period shall constitute a Default or an Event of Default under
the Suspended Covenants. Furthermore, after the time of reinstatement of the Suspended Covenants
upon such withdrawal or downgrade, calculations with respect to Restricted Payments will be made in
accordance with the terms of the covenant described above under Section 4.11 as though such
covenant had been in effect during the entire period of time from the Issue Date.




ARTICLE 5




SUCCESSOR CORPORATION



Section 5.01. Limitations on Mergers, Consolidations, Etc.




          (a) The Issuer shall not, directly or indirectly, in a single transaction or a series of
related transactions, consolidate or merge with or into another Person, or sell, lease, transfer,
convey or otherwise dispose of or assign all or substantially all of the assets of the Issuer and
the Restricted Subsidiaries (taken as a whole) unless:




          (1) either:





     (a) the Issuer shall be the surviving or continuing Person; or




     (b) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger or to which such sale, lease, transfer, conveyance or other
disposition or assignment shall be made (collectively, the “Successor”) is a
corporation, limited liability company or limited partnership organized and existing
under the laws of any State of the United States of America or the District of
Columbia, and the Successor expressly assumes, by agreements in form and substance
reasonably satisfactory to the



63









 






Trustee, all of the obligations of the Issuer under
the Notes, this Indenture, the Security Documents and the Registration Rights
Agreement;




     (2) immediately after giving effect to such transaction and the assumption of the
obligations as set forth in clause 5.01(a)(1)(b) above and the incurrence of any
Indebtedness to be incurred in connection therewith, and the use of any net proceeds of such
Indebtedness on a pro forma basis, no Default shall have occurred and be continuing; and




     (3) immediately after giving effect to such transaction and the assumption of the
obligations as set forth in clause 5.01(a)(1)(b) above and the incurrence of any
Indebtedness to be incurred in connection therewith, and the use of any net proceeds of such
Indebtedness on a pro forma basis, either (x) the Issuer or the Successor, as the case may
be, could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to the Coverage Ratio Exception or (y) the Consolidated Interest Coverage Ratio for
the Issuer or the Successor, as the case may be, would be equal to or greater than such
ratio for the Issuer immediately prior to such transaction.



          (b) For purposes of this Section 5.01, any Indebtedness of the Successor which was not
Indebtedness of the Issuer immediately prior to the transaction shall be deemed to have been
incurred in connection with such transaction to the extent such Indebtedness remains outstanding
immediately after giving effect to such transaction.




          (c) Except as provided in Section 10.06, no Guarantor may consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another Person, unless:




          (1) either:





          (a) such Guarantor shall be the surviving or continuing Person; or




          (b) the Person (if other than such Guarantor) formed by or surviving any such
consolidation or merger is another Guarantor or assumes, by agreements in form and
substance reasonably satisfactory to the Trustee, all of the obligations of such
Guarantor under the Note Guarantee of such Guarantor, this Indenture, the Security
Documents and the Registration Rights Agreement; and




     (2) immediately after giving effect to such transaction, no Default shall have occurred
and be continuing.



          (d) For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a
single transaction or series of transactions) of all or substantially all of the properties or
assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or
substantially all of the properties and assets of the Issuer, will be deemed to be the transfer of
all or substantially all of the properties and assets of the Issuer.




          (e) Notwithstanding the foregoing, (i) any Restricted Subsidiary may consolidate with, merge
with or into or convey, transfer or lease, in one transaction or a series of transactions, all or
substantially all of its assets to the Issuer or a Guarantor and (ii) Section 5.01(a)(3) will not
apply to a merger of the Issuer with an Affiliate of the Issuer solely for the purpose of
reorganizing the Issuer in another jurisdiction.




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Section 5.02. Successor Person Substituted.




          Upon any consolidation, combination or merger of the Issuer or a Guarantor, or any transfer of
all or substantially all of the assets of the Issuer in accordance with Section 5.01, in which the
Issuer or such Guarantor is not the continuing obligor under the Notes or its Note Guarantee, the
surviving entity formed by such consolidation or into which the Issuer or such Guarantor is merged
or the Person to which the sale, conveyance, lease, transfer, disposition or assignment is made
shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer or
such Guarantor under this Indenture, the Security Documents, the Notes and the Note Guarantees with
the same effect as if such surviving entity had been named therein as the Issuer or such Guarantor
and, except in the case of a lease, the Issuer or such Guarantor, as the case may be, shall be
released from the obligation to pay the principal of and interest on the Notes or in respect of its
Note Guarantee, as the case may be, and all of the Issuer’s or such Guarantor’s other obligations
and covenants under the Notes, this Indenture, the Security Documents and its Note Guarantee, if
applicable.




ARTICLE 6




DEFAULTS AND REMEDIES



Section 6.01. Events of Default.




          Each of the following is an “Event of Default”:




          (a) the failure to pay interest on, or Liquidated Damages with respect to, any of the Notes
when the same becomes due and payable and the continuance of any such failure for 30 days;




          (b) the failure to pay the principal of any of Notes, when such principal becomes due and
payable, at the Maturity Date, upon redemption, upon purchase, upon acceleration or otherwise;




          (c) failure by the Issuer to comply with Article 5 or in respect of its obligations to make a
Change of Control Offer pursuant to Section 4.15;




          (d) failure by the Issuer to comply with any other agreement or covenant in this Indenture and
continuance of this failure for 60 days after notice of the failure has been given to the Issuer by
the Trustee or by the Holders of at least 25% of the aggregate principal amount of the Notes then
outstanding;




          (e) default under any mortgage, indenture or other instrument or agreement under which there
may be issued or by which there may be secured or evidenced Indebtedness for borrowed money by the
Issuer or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the
Issue Date, which default (A) is caused by a failure to pay at final maturity principal on such
Indebtedness within the applicable express grace period and any extensions thereof (a “payment
default”) or (B) results in the acceleration of such Indebtedness prior to its express final
maturity (which acceleration is not rescinded, annulled or otherwise cured within 30 days of
receipt by the Issuer or such Restricted Subsidiary of notice of any such acceleration), and, in
each case, the principal amount of such Indebtedness, together with the principal amount of any
other Indebtedness with respect to which an event described in clause (A) or (B) has occurred and
is continuing, aggregates $25.0 million or more; provided that such Event of Default shall cease to
be an Event of Default if (x) the Indebtedness that is the subject of such Event of Default has
been repaid, or (y) the default relating to such Indebtedness is waived or



65









 






cured and if such Indebtedness has been accelerated, then the holders thereof have rescinded their declaration of
acceleration in respect of such Indebtedness;




          (f) one or more judgments (to the extent not covered by insurance) for the payment of money in
an aggregate amount in excess of $25.0 million shall be rendered against the Issuer, any of its
Restricted Subsidiaries or any combination thereof and the same shall remain undischarged for a
period of 60 consecutive days during which execution shall not be effectively stayed;




          (g) the Issuer or any of its Significant Subsidiaries pursuant to or within the meaning of any
Bankruptcy Law:





          (A) commences a voluntary case,




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




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




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




          (E) generally is not able to pay its debts as they become due, or




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



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





          (A) is for relief against the Issuer or any of its Significant Subsidiaries in
an involuntary case,




          (B) appoints a Custodian of the Issuer or any of its Significant Subsidiaries
for all or substantially all of the property of the Issuer or any of its Significant
Subsidiaries, or




          (C) orders the liquidation of the Issuer, or any of its Significant
Subsidiaries;



          (i) any Note Guarantee of any Significant Subsidiary ceases to be in full force and effect
(other than in accordance with the terms of such Note Guarantee and this Indenture) or is declared
null and void and unenforceable or found to be invalid or any Guarantor denies its liability under
its Note Guarantee (other than by reason of release of a Guarantor from its Note Guarantee in
accordance with the terms of this Indenture and the Note Guarantee); or




          (j) any security interest and Lien purported to be created by any Security Document with
respect to any Collateral, individually or in the aggregate, having a Fair Market Value in excess
of $10.0 million shall cease to be in full force and effect, or shall cease to give the Collateral
Agent, for the benefit of the Holders, the Liens, rights, powers and privileges purported to be
created and granted thereby (including a perfected first-priority security interest in and Lien on,
all of the Collateral thereunder (except as otherwise expressly provided in this Indenture, the
Security Documents and the Intercreditor Agreement)) in favor of the Collateral Agent, for a period
of 30 days after notice by the



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Trustee or by the Holders of at least 25% of the aggregate principal
amount of the Notes then outstanding, or shall be asserted by the Issuer or any Guarantor to not
be, a valid, perfected, first-priority (except as otherwise expressly provided in this Indenture,
the Security Documents or the Intercreditor Agreement) security interest in or Lien on the
Collateral covered thereby; except to the extent that any such loss of perfection or priority
results from the failure of the Collateral Agent or the Trustee (or an agent or trustee on its
behalf) to make filings, renewals and continuations (or other equivalent filings) or take other
appropriate action or the failure of the Collateral Agent or the Trustee (or an agent or trustee on
its behalf) to maintain possession of certificates actually delivered to it (or such agent or
trustee) representing securities pledged under the Security Documents.




          The term “Bankruptcy Law” means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors. The term “Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.



Section 6.02. Acceleration.




          If an Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)
with respect to the Issuer) shall have occurred and be continuing under this Indenture, the
Trustee, by written notice to the Issuer, or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding, by written notice to the Issuer and the Trustee, may declare
(an “acceleration declaration”) all amounts owing under the Notes to be due and payable. (The
Trustee agrees to provide a copy of such notice to such other Persons as may be required by the
Security Documents.) Upon such declaration of acceleration, the aggregate principal of and accrued
and unpaid interest on the outstanding Notes shall become due and payable (a) if there is no
Indebtedness outstanding under any Senior Facility at such time, immediately and (b) if otherwise,
subject to any limitations in the Intercreditor Agreement, unless a Collateral Suspension is in
effect, and if a Collateral Suspension is in effect upon the earlier of (x) the final maturity
(after giving effect to any applicable grace period or extensions thereof) or an acceleration of
any Indebtedness under any Credit Facility prior to the express final stated maturity thereof and
(y) five Business Days after the Representative under each Credit Facility receives the
acceleration declaration, but, in the case of this clause (b), only if such Event of Default is
then continuing; provided, however, that after such acceleration, but before a judgment or decree
based on acceleration, the Holders of a majority in aggregate principal amount of such outstanding
Notes may, rescind and annul such acceleration if:





     (1) the rescission would not conflict with any judgment or decree;




     (2) all Events of Default, other than nonpayment of principal or interest that has
become due solely because of the acceleration, have been cured or waived;




     (3) to the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise than by such
declaration of acceleration, has been paid;




     (4) the Issuer has paid all sums paid or advanced by the Trustee hereunder and its
reasonable compensation and reimbursed the Trustee for its expenses, disbursements and
advances and those of its agents and counsel; and




     (5) in the event of the cure or waiver of an Event of Default of the type described in
Section 6.01(g) or (h) above, the Trustee shall have received an Officers’ Certificate and
an Opinion of Counsel that such Event of Default has been cured or waived.



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No such rescission shall affect any subsequent Default or impair any right consequent thereto. If
an Event of Default specified in Section 6.01(g) or (h) occurs with respect to the Issuer and is
continuing, then, to the extent permitted by applicable law, all unpaid principal of and accrued
and unpaid interest on all of the outstanding Notes shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or any Holder.



Section 6.03. Other Remedies.




          If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
by proceeding at law or in equity to collect the payment of principal of and interest on the Notes
or to enforce the performance of any provision of the Notes, this Indenture, or the Security
Documents and may take any necessary action requested of it as Trustee to settle, compromise,
adjust or otherwise conclude any proceedings to which it is a party.




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



Section 6.04. Waiver of Past Defaults and Events of Default.




          Subject to Sections 2.09, 6.02, 6.07 and 8.02 hereof, the Holders of a majority in aggregate
principal amount of the Notes then outstanding have the right to waive past Defaults under this
Indenture except a Default or Event of Default in the payment of the principal of, or interest or
Liquidated Damages, if any, on any Note as specified in clauses (a) and (b) of Section 6.01 or in
respect of a covenant or a provision which cannot be modified or amended without the consent of all
Holders as provided for in Section 8.02. The Issuer shall deliver to the Trustee an Officers’
Certificate stating that the requisite percentage of Holders have consented to such waiver. In case
of any such waiver, the Issuer, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Notes, respectively. This paragraph of this Section
6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA
is hereby expressly excluded from this Indenture and the Notes, as permitted by the TIA.




          Upon any such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this Indenture, but no such
waiver shall extend to any subsequent or other Default or Event of Default or impair any right
consequent thereto.



Section 6.05. Control by Majority.




          Subject to Section 2.09 hereof, the Holders of a majority in aggregate principal amount of the
outstanding Notes have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or power conferred on
the Trustee by this Indenture. The Trustee, however, may refuse to follow any direction that
conflicts with law or this Indenture or any Security Document or that the Trustee determines may be
unduly prejudicial to the rights of another Holder not taking part in such direction, and the
Trustee shall have the right to decline to follow any such direction if the Trustee, being advised
by counsel, determines that the action so directed may not lawfully be taken or if the Trustee in
good faith shall, by a Trust Officer, determine that



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the proceedings so directed may involve it in personal liability; provided that the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction. In the event the Trustee takes any action
or follows any direction pursuant to this Indenture or the Security Documents, the Trustee shall be
entitled to indemnification reasonably satisfactory to it against any loss or expense caused by
taking such action or following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby expressly excluded from
this Indenture and the Notes, as permitted by the TIA.



Section 6.06. Limitation on Suits.




          (a) Subject to Section 6.07 below, no Holder shall have any right to institute any proceeding
with respect to this Indenture or any remedy thereunder unless:





     (1) such Holder has given the Trustee written notice of a continuing Event of Default;




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




     (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee
against any costs, liability or expense;




     (4) the Trustee fails to institute such proceeding within 60 days after receipt of the
request and the offer of indemnity; and




     (5) the Trustee has not received directions inconsistent with such written request
during such 60-day period by the Holders of a majority in aggregate principal amount of the
outstanding Notes.



          (b) However, such limitations do not apply to the right of any Holder of a Note to receive
payment of the principal of, or Liquidated Damages, if any, or interest on, such Note or to bring
suit for the enforcement of any such payment, on or after the due date expressed in the Notes,
which right will not be impaired or affected without the consent of the Holder.



Section 6.07. Rights of Holders To Receive Payment.



          Notwithstanding any other provision of this Indenture, the right of any Holder to receive
payment of principal of, or Liquidated Damages, if any, or accrued interest on any Note held by
such Holder on or after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.



Section 6.08. Collection Suit by Trustee.




          If an Event of Default occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Issuer (or any other obligor on the Notes) for
the whole amount of unpaid principal and accrued interest remaining unpaid, together with, to the
extent that payment of such interest is lawful, interest on overdue principal and interest on
overdue installments of interest, in each case at the rate set forth in Section 4.01 hereof, and
such further amounts as shall be



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sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel.



Section 6.09. Trustee May File Proofs of Claim.




          The Trustee may file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Issuer (or any other obligor on the
Notes), its creditors or its property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to distribute the same
after deduction of its charges and expenses to the extent that any such charges and expenses are
not paid out of the estate in any such proceedings and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the
event that the Trustee shall consent to the making of such payments directly to the Holders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof.




          Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan or reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceedings.



Section 6.10. Priorities.




          Any money collected by the Trustee pursuant to this Article or any Security Document and any
other money or property distributable in respect of the Issuer’s obligations under this Indenture
or any Security Document after an Event of Default shall be applied in the following order:





     FIRST: to the Trustee (including any predecessor Trustee) for amounts due under
Section 7.07 hereof, including payment of all compensation, expenses and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of collection;




     SECOND: if the Holders are forced to proceed against the Issuer or any Guarantor
directly without the Trustee, to Holders for their collection costs;




     THIRD: to Holders for amounts due and unpaid on the Notes for principal and interest
as to each, ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes; and




     FOURTH: to the Issuer or, to the extent the Trustee collects any amounts from any
Guarantor, to such Guarantor.



          The Trustee, upon prior written notice to the Issuer, may fix a record date and payment date
for any payment to Holders pursuant to this Section 6.10.



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Section 6.11. Undertaking for Costs.




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




ARTICLE 7




TRUSTEE



Section 7.01. Duties of Trustee.




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




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





     (1) The Trustee need perform only those duties as are specifically set forth in this
Indenture and the Security Documents and no covenants or obligations shall be implied in
this Indenture or the Security Documents against the Trustee.




     (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture or any Security Document. However, the Trustee shall examine the certificates and
opinions which are specifically required to be delivered to the Trustee by any provision of
this Indenture or any Security Document to determine whether or not they conform to the
requirements of this Indenture or such Security Document.



          (c) Notwithstanding anything to the contrary herein contained, the Trustee may not be relieved
from liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:





     (1) This paragraph does not limit the effect of paragraphs (b) or (d) of this Section
7.01.




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




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



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




          (e) Whether or not herein expressly provided, every provision of this Indenture or any
Security Document that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and
(d) of this Section 7.01.




          (f) The Trustee shall not be liable for interest on any money or assets received by it except
as the Trustee may agree in writing with the Issuer. Assets held in trust by the Trustee need not
be segregated from other assets except to the extent required by law.




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




          (h) The Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee makes such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Issuer, personally or by agent
or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of
any kind by reason of such inquiry or investigation.




          (i) The rights, privileges, protections, immunities and benefits given to the Trustee in this
Indenture, including, without limitation, its right to be indemnified and any limitations on its
duties and liabilities under this Indenture and the Security Documents, are extended to, and shall
be enforceable by, the Trustee in each of its capacities hereunder and under each Security Document
(including its capacity as Collateral Agent and as “Authorized Representative,” “Senior
Representative” and, if applicable, “Controlling Agent’ under the Intercreditor Agreement), and
each agent, custodian and other Person employed to act hereunder or thereunder.




          (j) The permissive right of the Trustee to take or refrain from taking any actions enumerated
in this Indenture or any Security Document shall not be construed as a duty.




          (k) The Trustee has no duty to determine whether the Issuer and the Guarantors are in
compliance with the terms of the Credit Agreement or any other Credit Facility.



Section 7.02. Rights of Trustee.




          Subject to Section 7.01 hereof:




          (a) The Trustee may conclusively rely on any document reasonably believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.



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          (b) Before the Trustee acts or refrains from acting with respect to any matters contemplated
by this Indenture, any Security Document or the Notes it may consult with counsel and may require
an Officers’ Certificate or an Opinion of Counsel, or both, which shall conform to the provisions
of Section 11.05 hereof. The Trustee shall be protected and shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or opinion. The Trustee may
also consult with counsel on any matter relating to this Indenture, the
Security Documents or the Notes, and the Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on the advice of counsel.




          (c) The Trustee may act through attorneys and agents and shall not be responsible for the
misconduct or negligence of any attorney or agent (other than an agent who is an employee of the
Trustee) so long as the appointment of such agent was made with due care.




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




          (e) The Trustee may consult with counsel of its selection, and the advice or opinion of such
counsel as to matters of law shall be full and complete authorization and protection from liability
in respect of any action taken, omitted or suffered by it hereunder in good faith and in reliance
thereon.




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




          (g) The Trustee may request that the Issuer deliver an Officers’ Certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take specified actions
pursuant to this Indenture or any Security Document, which Officers’ Certificate may be signed by
any person authorized to sign an Officers’ Certificate, including any person specified as so
authorized in any such certificate previously delivered and not superseded.




          (h) The Trustee shall not be responsible or liable for any failure or delay in the
performance of its obligations under this Indenture or any Security Document arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances;
sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or
software) or communication services; accidents; labor disputes; acts of civil or military authority
and governmental action.




          (i) Anything in this Indenture or any Security Document notwithstanding, in no event shall the
Trustee be liable for special, indirect, punitive or consequential loss or damage of any kind
whatsoever (including but not limited to loss of profit), even if the Issuer has been advised as to
the likelihood of such loss or damage and regardless of the form of action.



Section 7.03. Individual Rights of Trustee.




          The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may make loans to, accept deposits from, perform services for or otherwise deal with the
Issuer, or any Affiliates thereof, with the same rights it would have if it were not Trustee. Any
Agent



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may do the same with like rights. The Trustee, however, shall be subject to Sections 7.10
and 7.11 hereof.



Section 7.04. Trustee’s Disclaimer.




          The Trustee shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, any Security Document or the Notes, it shall not be accountable for the
Issuer’s use of the proceeds from the sale of Notes or any money paid to the Issuer pursuant to the
terms of this Indenture or any Security Document and it shall not be responsible for any statement
of the Issuer in this Indenture, the Security Documents or the Notes other than the Trustee’s
certificate of authentication.



Section 7.05. Notice of Defaults.




          The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Trust Officer of the Trustee has received written notice of such Default or Event of Default at the
Corporate Trust Office of the Trustee.




          Within 90 days after the occurrence of any Default or Event of Default hereunder, the Trustee
shall transmit by mail to Holders of Notes, as their names and addresses appear in the records of
the Registrar, a notice of the Default or Event of Default known to the Trustee, unless such
Default or Event of Default shall have been cured or waived. Except in the case of an Event of
Default in payment of principal of or interest or Liquidated Damages on any Note, including an
accelerated payment and the failure to make payment on the Change of Control Payment Date pursuant
to a Change of Control Offer or on the Offer Payment Date pursuant to a Net Proceeds Offer, the
Trustee may withhold the notice if and so long as its Board of Directors, the executive committee
of its Board of Directors or a committee of its directors and/or Trust Officers in good faith
determines that withholding the notice is in the interest of the Holders. This Section 7.05 shall
be in lieu of the proviso to Section 315(b) of the TIA, and such proviso of Section 315(b) of the
TIA is hereby expressly excluded from this Indenture and the Notes, as permitted by the TIA.



Section 7.06. Reports by Trustee to Holders.




          If required by TIA Section 313(a), within 60 days after May 15 of any year, commencing the
first May 15 following the date of this Indenture, the Trustee shall mail to each Holder a brief
report dated as of such May 15 that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Section 313(b), (c) and (d).




          Reports pursuant to this Section 7.06 shall be transmitted by mail:




          (a) to all registered Holders, as the names and addresses of such Holders appear on the
Registrar’s books; and




          (b) to such Holder as have, within the two years preceding such transmission, filed their
names and addresses with the Trustee for that purpose.




          A copy of each report at the time of its mailing to Holders shall be filed with the Commission
and each stock exchange, if any, on which the Notes are listed. The Issuer shall promptly notify
the Trustee when the Notes are listed on any stock exchange or of any delisting thereof.



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Section 7.07. Compensation and Indemnity.




          The Issuer shall pay to the Trustee from time to time such compensation as shall be agreed in
writing between the Issuer and the Trustee for the Trustee’s services. The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall
reimburse the Trustee upon request for all reasonable fees and expenses, including out-of-pocket
expenses incurred or made by it in connection with the performance of its duties under this
Indenture or any Security Document or in connection with the collection of any funds. Such
expenses shall include the reasonable fees and expenses of the Trustee’s agents and counsel.




          The Issuer shall indemnify each of the Trustee and its agents, employees, stockholders and
directors and officers for, and hold them harmless against, any loss, liability or expense incurred
by them (including attorney’s fees and expenses) arising out of or in connection with the
administration of this trust or any security interest created under the Security Documents,
including the reasonable costs and expenses of defending themselves against any claim or liability
in connection with the exercise or performance of any of their rights, powers or duties hereunder
or under any Security Document, except for such actions to the extent caused by any negligence, bad
faith or willful misconduct on their part as determined by a court of competent jurisdiction in a
final order. The Trustee shall notify the Issuer promptly, in writing, of any claim asserted
against the Trustee for which it may seek indemnity. At the Trustee’s sole discretion, the Issuer shall defend the claim and the
Trustee shall cooperate and may participate in the defense; provided that any settlement of a claim
shall be approved in writing by the Trustee. The Issuer need not pay for any settlement made
without its written consent, which consent shall not be unreasonably withheld. The Issuer need not
reimburse any expense or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct as determined by a court of
competent jurisdiction in a final order.




          To secure the Issuer’s payment obligations in this Section 7.07, the Trustee shall have a lien
prior to the Notes on all assets or money held or collected by the Trustee, in its capacity as
Trustee, except assets or money held in trust to pay principal of or interest on particular Notes.




          In addition and without prejudice to the rights provided to the Trustee under any provision of
this Indenture or any Security Document, when the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(f) or (g) hereof occurs, such expenses and the
compensation for such services are intended to constitute expenses of administration under any
Bankruptcy Law.




          The obligation of the Issuer under this Section 7.07 shall survive the resignation or removal
of the Trustee and the termination or satisfaction and discharge of this Indenture or any Security
Document.




          “Trustee” for purposes of this Section shall include any predecessor Trustee and the Trustee
in each of its capacities hereunder and under the Security Documents (including its capacity as
Collateral Agent and as “Authorized Representative,” “Senior Representative” and, if applicable
“Controlling Agent” under the Intercreditor Agreement) and to each agent, custodian and other
person employed to act hereunder; provided, however, that the negligence, willful misconduct or bad
faith of any Trustee hereunder or under any Security Document shall not affect the rights of any
other Trustee hereunder or under any Security Document.



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Section 7.08. Replacement of Trustee.



          The Trustee may resign at any time by so notifying the Issuer in writing. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by so notifying the
Trustee and the Issuer in writing and may appoint a successor Trustee. The Issuer may remove the
Trustee at its election if:




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




          (b) the Trustee is adjudged a bankrupt or an insolvent;




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




          (d) the Trustee otherwise becomes incapable of acting.




          If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer
shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the Notes may appoint a successor Trustee
to replace the successor Trustee appointed by the Issuer.




          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuer. Immediately after that, the retiring Trustee shall transfer, after
payment of all sums then owing to the Trustee pursuant to Section 7.07 hereof, all property held by
it as Trustee to the successor Trustee, subject to the lien provided in Section 7.07 hereof, the
resignation or removal of the retiring Trustee shall become effective, and the successor Trustee
shall have the rights, powers and duties of the Trustee under this Indenture and each Security
Document. A successor Trustee shall mail notice of its succession to each Holder.




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




          If the Trustee, after written request by any Holder who has been a bona fide holder of
securities for any period of time specified under TIA Section 310(b), fails to comply with Section
7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.




          Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s
obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.



Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.




          If the Trustee consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, subject to this Article 7, the
successor corporation without any further act shall be the successor Trustee.



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Section 7.10. Eligibility; Disqualification.




          This Indenture shall always have a Trustee which shall be eligible to act as Trustee under TIA
Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have a combined capital and surplus
of at least $100,000,000 as set forth in its most recent published annual report of condition. If
the Trustee has or shall acquire any “conflicting interest” within the meaning of TIA Section
310(b), the Trustee and the Issuer shall comply with the provisions of TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest or participation
in other securities of the Issuer are outstanding if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.10, the Trustee shall resign immediately in the
manner and with the effect hereinbefore specified in this Article 7.



Section 7.11. Preferential Collection of Claims Against the Issuer.




          The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section
311(a) to the extent indicated therein. The provisions of TIA Section 311 shall apply to the
Issuer and the Guarantors as obligors upon the Notes.




ARTICLE 8




AMENDMENTS, SUPPLEMENTS AND WAIVERS



Section 8.01. Without Consent of Holders.




          (a) The Issuer and the Guarantors, when authorized by a Board Resolution, and the Trustee or,
if applicable, the Collateral Agent (including in its capacity as “Notes Collateral Agent,”
“Authorized Representative,” “Senior Representative” or “Controlling Agent” under the Intercreditor
Agreement) may amend or supplement this Indenture, the Security Documents, the Notes, the Note
Guarantees or the Intercreditor Agreement without notice to or consent of any Holder:





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




     (2) to provide for uncertificated Notes in addition to or in place of certificated
Notes;




     (3) to provide for the assumption of the Issuer’s or a Guarantor’s obligations to the
Holders in the case of a merger, consolidation or sale of all or substantially all of the
Issuer’s or such Guarantor’s assets in accordance with Article 5;




     (4) to add any Note Guarantee or to effect the release of any Guarantor from any of its
obligations under its Note Guarantee or this Indenture (to the extent permitted by this
Indenture or required under the terms of the Intercreditor Agreement);




     (5) to make any change that would provide any additional rights or benefits to the
Holders or does not materially adversely affect the rights of any Holder;




     (6) to effect or maintain the qualification of this Indenture under the Trust Indenture
Act;



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     (7) to secure the Notes or any Note Guarantees or any other obligation under this
Indenture;




     (8) to confirm and evidence the release, termination or discharge of any Lien securing
the Notes when such release, termination or discharge is permitted by this Indenture, the
Security Documents or the Intercreditor Agreement;




     (9) to evidence and provide for the acceptance of appointment by a successor trustee;




     (10) to conform the text of this Indenture or the Notes to any provision of the
Description of the Notes section of the Offering Circular to the extent that such provision
in the Description of the Notes was intended to be a verbatim recitation of a provision of
this Indenture, the Note Guarantees or the Notes;




     (11) in the case of the Intercreditor Agreement, in order to subject the security
interests in the Collateral in respect of any Additional Senior Debt Obligations and Senior
Loan Obligations to the terms of the Intercreditor Agreement, in each case to the extent the
Incurrence of such Indebtedness, and the grant of all Liens on the Collateral held for the
benefit of such Indebtedness were permitted under this Indenture;




     (12) to provide for the issuance of Additional Notes in accordance with this Indenture;
or




     (13) with respect to any Security Document, to the extent such amendment is reasonably
necessary to comply with the terms of the Intercreditor Agreement (including Section 2.04(c)
thereof).


Section 8.02. With Consent of Holders.




          (a) Subject to Section 6.07 hereof, the Issuer and the Guarantors, when each is authorized by
a Board Resolution of their respective Boards of Directors, and the Trustee or, if applicable, the
Collateral Agent (including in its capacity as “Notes Collateral Agent,” “Authorized
Representative,” “Senior Representative” or “Controlling Agent” under the Intercreditor Agreement)
may amend or supplement this Indenture, Security Documents, the Notes, the Note Guarantees or the
Intercreditor Agreement with the consent (which may include consents obtained in connection with a
tender offer or exchange offer for the Notes) of the Holders of at least a majority in principal
amount of the Notes then outstanding. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in principal amount of the Notes then outstanding may waive any existing Defaults under,
or compliance by the Issuer or any Guarantor with any provision of, this Indenture, the Security
Documents, the Notes, or the Note Guarantees. However, without the consent of each Holder affected,
an amendment, supplement or waiver, including a waiver pursuant to Section 6.04 hereof, may not:





     (1) reduce, or change the maturity of, the principal of any Note;




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




     (3) reduce any premium payable upon redemption of the Notes, change the date on which
any Notes are subject to redemption or waive any payment with respect to the redemption of
the Notes; provided, however, that solely for the avoidance of doubt, and without any other



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implication, any purchase or repurchase of Notes (including pursuant to Section 4.12 and
Section 4.15) shall not be deemed a redemption of the Notes;




     (4) make any Note payable in money or currency other than that stated in the Notes;




     (5) modify or change any provision of this Indenture or the related definitions to
affect the ranking of the Notes or any Note Guarantee in a manner that adversely affects the
Holders;




     (6) reduce the percentage of Holders necessary to consent to an amendment or waiver to
this Indenture or the Notes;




     (7) waive a default in the payment of principal of or interest or Liquidated Damages,
if any, on any Notes (except a rescission of acceleration of the Notes by the Holders
thereof as provided in this Indenture and a waiver of the payment default that resulted from
such acceleration);




     (8) impair the rights of Holders to receive payments of principal of or interest or
Liquidated Damages, if any, on the Notes on or after the due date therefor or to institute
suit for the enforcement of any payment on the Notes;




     (9) release any Guarantor that is a Significant Subsidiary from any of its obligations
under its Note Guarantee or this Indenture, except as permitted by this Indenture; or




     (10) make any change in these amendment, supplement and waiver provisions.



          Furthermore, without the consent of the Holders of at least two-thirds in principal amount of
the Notes then outstanding, an amendment or waiver may not make any change in any Security
Document, any Intercreditor Agreement or the provisions in this Indenture dealing with the
Collateral or the Security Documents or the application of trust proceeds of the Collateral that
would release all or substantially all of the Collateral from the Liens of the Security Documents
(except as permitted by the terms of this Indenture, the Security Documents and the Intercreditor
Agreement (including Section 2.04 thereof)) or change or alter the priority of the security
interests in the Collateral.




          The consent of the Holders of the Notes is not necessary under this Indenture, the
Intercreditor Agreement or any Security Document to approve the particular form of any proposed
amendment, supplement or waiver. It is sufficient if such consent approves the substance of the
proposed amendment, supplement or waiver.




          After an amendment or supplement under this Section 8.02 becomes effective, the Issuer
shall mail to Holders of the Notes a notice briefly describing such amendment or supplement.
However, the failure to give such notice to all Holders of the Notes, or any defect therein, will
not impair or affect the validity of the amendment or supplement.



Section 8.03. Compliance with TIA.




          Every amendment to or supplement of this Indenture, the Notes or the Note Guarantees shall
comply with the TIA as then in effect.




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Section 8.04. Revocation and Effect of Consents.




          Until an amendment, waiver or supplement becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not
made on any Note. Subject to the following paragraph, any such Holder or subsequent Holder may
revoke the consent as to such Holder’s Note or portion of such Note by notice to the Trustee and,
if applicable, the Collateral Agent or the Issuer received before the date on which the Trustee
and, if applicable, the Collateral Agent receives an Officers’ Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.




          The Issuer may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or effective for
more than 90 days after such record date.




          After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless
it makes a change described in any of clauses (1) through (10) of Section 8.02 hereof, in which
case, the amendment, supplement or waiver shall bind only each Holder who has consented to it and
every subsequent Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note.



Section 8.05. Notation on or Exchange of Notes.




          If an amendment, supplement, or waiver changes the terms of a Note, the Trustee may request
the Holder to deliver it to the Trustee. In such case, the Trustee shall place an appropriate
notation on the Note about the changed terms and return it to the Holder. Alternatively, if the
Issuer or the Trustee so determines, in exchange for the Note the Issuer shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the
appropriate notation or issue a new Note shall not affect the validity and effect of such amendment
supplement or waiver.



Section 8.06. Trustee and Collateral Agent To Sign Amendments, etc.




          Each of the Trustee and the Collateral Agent shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article 8 is authorized or permitted by this
Indenture and the Security Documents and that such amendment, supplement or waiver constitutes the
legal, valid and binding obligation of the Issuer and any Guarantors, enforceable in accordance
with its terms (subject to customary exceptions). Each of the Trustee and the Collateral Agent
may, but shall not be obligated to, execute any such amendment, supplement or waiver which affects
the Trustee’s or the Collateral Agent’s own rights, duties or immunities under this Indenture or
the Security Documents or otherwise.





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ARTICLE 9




DISCHARGE OF INDENTURE; DEFEASANCE




Section 9.01. Satisfaction and Discharge of Indenture.




          (a) This Indenture shall be discharged and shall cease to be of further effect (except those
obligations referred to in Section 9.01(c)) as to all outstanding Notes and the Trustee, on written
demand of and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:





     (1) Either (A) all the Notes that have been authenticated and delivered (except lost,
stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money
has been deposited in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from this trust) have been delivered to the Trustee for
cancellation, or




     (B) all Notes not delivered to the Trustee for cancellation otherwise (i) have become
due and payable, (ii) will become due and payable, or may be called for redemption, within
one year or (iii) have been called for redemption pursuant to paragraph 5 of the Notes and,
in any case, the Issuer has irrevocably deposited or caused to be deposited with the Trustee
as trust funds, in trust solely for the benefit of the Holders, U.S. legal tender, U.S.
Government Obligations or a combination thereof, in such amounts as will be sufficient
(without consideration of any reinvestment of interest) to pay and discharge the entire
Indebtedness (including all principal and accrued interest and Liquidated Damages, if any)
on the Notes not theretofore delivered to the Trustee for cancellation;




     (2) the Issuer has paid all other sums payable by it under this Indenture; and




     (3) the Issuer has delivered irrevocable instructions to the Trustee to apply the
deposited money toward the payment of the Notes at maturity or on the date of redemption, as
the case may be.



          (b) In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel
stating that all conditions precedent to satisfaction and discharge have been complied with.




          (c) Notwithstanding Section 9.01(a), the Issuer’s obligations in Article 2 and Sections 4.07,
7.07, 9.06 and 9.07 hereof shall survive until the Notes are no longer outstanding pursuant to the
last paragraph of Section 2.08 hereof. After the Notes are no longer outstanding, the Issuer’s
obligations in Sections 7.07, 9.06 and 9.07 hereof shall survive.




          (d) After such delivery or irrevocable deposit, the Trustee upon request shall acknowledge in
writing the discharge of the Issuer’s and each Guarantor’s obligations under the Notes, the Note
Guarantees and this Indenture except for those surviving obligations specified above.




          (e) The Issuer shall provide notice of discharge or defeasance pursuant to this Article 9
within ten (10) days after deposit of funds or U.S. Government Obligations. If payment at stated
maturity of less than all of the Notes of any series is to be provided for in the manner and with
the effect provided in this Section 9.01, the Trustee shall select such Notes, or portions or
principal amount thereof, in the manner specified by Section 3.02 for selection for redemption of
less than all the Notes of a series.




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Section 9.02. Legal Defeasance.




          (a) The Issuer may, at its option at any time, elect to have this Section be applied to all
outstanding Notes upon compliance with the conditions set forth in Section 9.04.




          (b) Upon the Issuer’s exercise under paragraph (a) hereof of the option applicable to this
paragraph (b), the Issuer and each Guarantor shall, subject to the satisfaction of the conditions
set forth in Section 9.04 hereof, be deemed to have been discharged from their respective
obligations with respect to all outstanding Notes and the Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this
purpose, Legal Defeasance means that the Issuer and each Guarantor shall be deemed to have paid and
discharged the entire obligations represented by the Notes and the Note Guarantees, and this
Indenture shall cease to be of further effect as to all outstanding Notes and the Note Guarantees,
except as to: (i) the rights of Holders of outstanding Notes to receive solely from the trust fund
described in Section 9.05 hereof, and as more fully set forth in such Section, payments in respect
of the principal of, Liquidated Damages, if any, and interest on such Notes when such payments are
due from such trust fund, (ii) the Issuer’s obligations with respect to the Notes under Article 2
and Section 4.07 hereof, (iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Issuer’s obligations in connection therewith and (iv) this Article 9. Subject to
compliance with this Article 9, the Issuer may exercise its option under this Section 9.02
notwithstanding the prior exercise of its option under Section 9.03 below with respect to the
Notes.




Section 9.03. Covenant Defeasance.




          (a) The Issuer may, at its option at any time, elect to have this Section be applied to all
outstanding Notes upon compliance with the conditions set forth in Section 9.04.




          (b) Upon the Issuer’s exercise under paragraph (a) hereof of the option applicable to this
paragraph (b), the Issuer and each Guarantor shall, subject to the satisfaction of the conditions
set forth in Section 9.04 hereof, be released from their respective obligations under the covenants
contained in Sections 4.02, 4.05 and 4.08 through 4.21 hereof, inclusive, and subclause (3) of
Section 5.01(a) hereof with respect to the outstanding Notes and the Note Guarantees on and after
the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”);
provided, however, that Covenant Defeasance will not be effective until such time as Events of
Default contained in Section 6.01(g) and (h) no longer apply, and the Notes and the Note Guarantees
shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder. For
this purpose, such Covenant Defeasance means that, with respect to the outstanding Notes and the
Note Guarantees, the Issuer and each Guarantor may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event or Default under Section 6.01(d)
hereof, but, except as specified above, the remainder of this Indenture, and such Notes and the
Note Guarantees shall be unaffected thereby. In addition, upon the Issuer’s exercise under
paragraph (a) hereof of the option applicable to this paragraph (b), subject to the satisfaction of
the conditions set forth in Section 9.04 hereof, the Events of Default described under clauses (c)
through (f), (i) and (j) of Section 6.01 and the Events of Default described under clauses (g) and
(h) of Section 6.01 (but only with respect to Significant Subsidiaries of the Issuer), in each
case, will no longer constitute an Event of Default.




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Section 9.04. Conditions to Legal Defeasance or Covenant Defeasance.




          The following shall be the conditions to the application of either Section 9.02 or 9.03 hereof
to the outstanding Notes and the Note Guarantees:





     (1) the Issuer must irrevocably deposit with the Trustee (or other qualifying trustee),
as trust funds, in trust solely for the benefit of the Holders, U.S. legal tender or U.S.
Government Obligations, or a combination thereof, in such amounts as will be sufficient
(without consideration of any reinvestment of interest), in the opinion of a nationally
recognized investment bank, appraisal firm or firms of independent public accountants
selected by the Issuer, to pay the principal of, Liquidated Damages, if any, and interest on
the Notes on the stated date for payment thereof or on the applicable Redemption Date, as
the case may be;




     (2) in the case of an election under Section 9.02 hereof, the Issuer shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (A) the Issuer has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a
change in the applicable U.S. federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of the Legal
Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal Defeasance had not
occurred;




     (3) in the case of an election under Section 9.03 hereof, the Issuer shall have
delivered to the Trustee an Opinion of Counsel confirming that the Holders will not
recognize income, gain or loss for U.S. federal income tax purposes as a result of such
Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;




     (4) no Default shall have occurred and be continuing on the date of such deposit (other
than a Default resulting from the borrowing of funds to be applied to such deposit and the
grant of any Lien securing such borrowing);




     (5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of or constitute a default under this Indenture or any other material agreement or
instrument to which the Issuer or any of its Subsidiaries is a party or by which the Issuer
or any of its Subsidiaries is bound (other than any such Default or default resulting solely
from the borrowing of funds to be applied to such deposit and the grant of any Lien to
secure such borrowings);




     (6) the Issuer shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Issuer with the intent of preferring the Holders over
any other creditors of the Issuer or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Issuer or others; and




     (7) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that the conditions precedent provided for in, in the case
of the



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Officers’ Certificate, clauses (1) through (6) and, in the case of the Opinion of
Counsel, clauses (2) and/or (3) and (5) of this Section 9.04 have been complied with.




If the funds deposited with the Trustee to effect Covenant Defeasance are insufficient to
pay the principal of and interest on the Notes when due, then the Issuer’s obligations and
the obligations of Guarantors under this Indenture will be revived and no such defeasance
will be deemed to have occurred.



Section 9.05. Application of Trust Money.




          All money and U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 9.01 or 9.04 hereof in respect of the outstanding Notes shall be held
in trust and applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Notes, of all sums due and to become due thereon in respect of
principal and accrued interest, but such money need not be segregated from other funds except to
the extent required by law.




          The Issuer and the Guarantors shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to
Section 9.01 or 9.04 hereof or the principal and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the Holders.




          Anything in this Article 9 to the contrary notwithstanding, the Trustee shall deliver or pay
to the Issuer from time to time upon a written request of the Issuer in the form of an Officers’
Certificate any money or U.S. Government Obligations held by it as provided in Section 9.01 or 9.04
hereof which, in the opinion of a nationally-recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent satisfaction and
discharge of this Indenture, Legal Defeasance or Covenant Defeasance, as the case may be.




Section 9.06. Repayment to the Issuer.




          Subject to Section 9.05 hereof, the Trustee and the Paying Agent shall promptly pay to the
Issuer upon request any excess U.S. legal tender or U.S. Government Obligations held by them at any
time and thereupon shall be relieved from all liability with respect to such money. Subject to
applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Issuer upon
request any money held by them for the payment of principal or interest that remains unclaimed for
two years; provided that the Trustee or such Paying Agent, before being required to make any
payment, may at the expense of the Issuer cause to be published once in a newspaper of general
circulation in The City of New York or mail to each Holder entitled to such money notice that such
money remains unclaimed, and that after a date specified therein which shall be at least 30 days
from the date of such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Issuer. After payment to the Issuer, Holders entitled to such money must
look to the Issuer for payment as general creditors unless an applicable law designates another
Person.




Section 9.07. Reinstatement.




          If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in
accordance with Section 9.01, 9.02 or 9.03 hereof by reason of any legal proceeding or by



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reason of any order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Issuer’s and each Guarantor’s obligations under this
Indenture, the Security Documents, the Notes and the Note Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 9 until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. legal tender or U.S. Government
Obligations in accordance with Section 9.01 hereof; provided, however, that if the Issuer or the
Guarantors have made any payment of principal of or accrued interest on any Notes because of the
reinstatement of their obligations, the Issuer and each such Guarantor 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 10




GUARANTEES




Section 10.01. Unconditional Guarantee.




          Each Guarantor hereby unconditionally, jointly and severally, guarantees to each Holder of a
Note authenticated by the Trustee and to the Trustee and its successors and assigns that the
principal of and interest on the Notes will be promptly paid in full when due, subject to any
applicable grace period, whether at the Maturity Date, by acceleration or otherwise, and interest
on the overdue principal and interest on any overdue interest on the Notes, if lawful, and all
other obligations of the Issuer to the Holders or the Trustee hereunder or under the Notes will be
promptly paid in full or performed, all in accordance with the terms hereof and thereof; subject,
however, to the limitations set forth in Section 10.03 hereof. Each Guarantor hereby agrees that
to the maximum extent permitted under applicable law, its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with
respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. To the maximum extent permitted under applicable
law, each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding
first against the Issuer, protest, notice and all demands whatsoever and covenants that the Note
Guarantee will not be discharged except by complete performance of the obligations contained in the
Notes, this Indenture and the Security Documents. If any Holder or the Trustee is required by any
court or otherwise to return to the Issuer, any Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Issuer or any Guarantor, any amount paid by the
Issuer or any Guarantor to the Trustee or such Holder, each Note Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further
agrees that, to the maximum extent permitted under applicable law, as between a Guarantor, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the purpose of each Note
Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration
in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article 6 hereof, such obligations (whether or not due and payable)
shall become due and payable by each Guarantor for the purpose of each Note Guarantee.




          Each Guarantor also agrees to pay any and all costs and expenses (including reasonable
attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Article
10.




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Section 10.02. Severability.




          In case any provision of this Article 10 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 10.03. Limitation on Guarantor’s Liability.




          (a) To the extent applicable, a Guarantor’s liability in respect of its Note Guarantee shall
be limited to the extent set forth below:





     (1) Limitations Applicable to U.S. Guarantors. Each Guarantor that is
incorporated, organized or formed, as the case may be, under the laws of the United States,
any State thereof or the District of Columbia (a “U.S. Guarantor”), and by its
acceptance hereof, each Holder and the Trustee, hereby confirm that it is the intention of
all such parties that the Note Guarantee of a U.S. Guarantor does not constitute a
fraudulent transfer or conveyance for purposes of Title 11 of the United States Code, as
amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar U.S. Federal or state or other applicable law. To effectuate the foregoing
intention, each Holder, by its acceptance of a Note, and each U.S. Guarantor hereby
irrevocably agree that the obligations of a U.S. Guarantor under its Note Guarantee shall be
limited to the maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such U.S. Guarantor (including, without limitation, any guarantees under any
Credit Facility) and after giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other Guarantor under
its Note Guarantee or pursuant to its contribution obligations under this Indenture, result
in the obligations of such U.S. Guarantor not constituting such a fraudulent transfer or
conveyance.




     (2) Limitations Applicable to Other Guarantors. Each Guarantor that is
incorporated, organized or formed, as the case may be, under the laws of any jurisdiction
other than one set forth in clause (1) above (an “Other Guarantor”), and by its
acceptance hereof, each Holder and the Trustee, hereby confirm that it is the intention of
all such parties that the Note Guarantee of an Other Guarantor does not constitute a
fraudulent transfer or conveyance for purposes of applicable law. To effectuate the
foregoing intention, each Holder, by its acceptance of a Note, and each Other Guarantor
hereby irrevocably agree that the obligations of an Other Guarantor under its Note Guarantee
shall be limited to the maximum amount as will, after giving effect to all other contingent
and fixed liabilities of such Other Guarantor (including, without limitation, any guarantees
under any Credit Facility) and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor
under its Note Guarantee or pursuant to its contribution obligations under this Indenture,
result in the obligations of such Other Guarantor not constituting such a fraudulent
transfer or conveyance.



          (b) If following the date of this Indenture and notwithstanding anything in Section 8.02 to
the contrary:





     (1) (i) there shall be any change in the laws of the United States, any State thereof
or the District of Columbia or (ii) any Restricted Subsidiary incorporated, organized or
formed, as the case may be, under the laws of any jurisdiction other than the United States,
any State thereof or the District of Columbia (a “Future Guarantor”) shall be
required to guarantee the Notes



86









 






pursuant to Section 4.20 hereof and the Issuer shall reasonably determine that clause
(2) with respect to Other Guarantors shall not adequately address the limitations on the
Note Guarantee of such Future Guarantor imposed by applicable law of the jurisdiction of
incorporation, organization or formation, as the case may be, of any such Future Guarantor;
or




     (2) the Issuer shall reasonably determine that it shall be necessary or advisable to
amend the terms of subsection (a) of this Section 10.03 or to add additional provisions
related to the limitations imposed on the Note Guarantee of a Future Guarantor,


then upon the delivery of an Officers’ Certificate and Opinion of Counsel reasonably satisfactory
to the Trustee, the Issuer shall be entitled to amend such clauses or add such additional
provisions (including any related modifications to the form of Note Guarantee attached hereto in
Exhibit A), as the case may be, in order for the Note Guarantee of a Guarantor not to so
violate applicable law.




          (c) Each Guarantor that makes a payment for distribution under its Note Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based on adjusted net
assets of each Guarantor.




Section 10.04. Successors and Assigns.




          This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall
ensure to the benefit of the successors and assigns of the Trustee and the Holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the rights and
privileges conferred upon that party in this Indenture and in the Notes shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and conditions of this
Indenture.




Section 10.05. No Waiver.




          Each of the Guarantors agrees that to the maximum extent permitted under applicable law, (a)
neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any
right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any right, power or
privilege and (b) the rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or benefits which either
may have under this Article 10 at law, in equity, by statute or otherwise.




Section 10.06. Release of Guarantor.




          A Subsidiary Guarantor shall be released from all of its obligations under its Note Guarantee
and its obligations under this Indenture, the Security Documents and the Registration Rights
Agreement:





     (1) in the event of a sale or other disposition of all or substantially all of the
assets of such Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all of the Equity Interests of such Subsidiary Guarantor then held
by the Issuer and the Restricted Subsidiaries;




     (2) if such Subsidiary Guarantor is designated as an Unrestricted Subsidiary or
otherwise ceases to be a Restricted Subsidiary, in each case in accordance with the
provisions of



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this Indenture, upon effectiveness of such designation or when it first ceases to be a
Restricted Subsidiary; or




     (3) if such Subsidiary Guarantor is released from or otherwise ceases to guarantee any
Credit Facility of the Issuer or any Restricted Subsidiary.



          Upon delivery by the Issuer to the Trustee of an Officers’ Certificate and an Opinion of
Counsel to the effect that one of the foregoing requirements has been satisfied and the conditions
to the release of a Guarantor from its Note Guarantee under this Section 10.06 have been met, the
Trustee shall execute any documents reasonably required in order to evidence the release of such
Guarantor from its obligations under its Note Guarantee.




Section 10.07. Execution of Supplemental Indenture for Future Guarantors.




          Each Subsidiary which is required to become a Guarantor shall, and the Issuer shall cause each
such Subsidiary to, promptly execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit E hereto pursuant to which such Subsidiary shall
become a Guarantor under this Article 10 and shall guarantee the obligations of the Issuer under
the Notes and this Indenture. Concurrently with the execution and delivery of such supplemental
indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and
that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors’ rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, each of such supplemental indenture
and the Note Guarantee of such Guarantor is a legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms.




Section 10.08. Notation of Note Guarantee.




          To evidence the Note Guarantee set forth in this Article 10, each Guarantor hereby agrees that
a notation of such Note Guarantee shall be placed on each Note authenticated and made available for
delivery by the Trustee and that this Note Guarantee shall be executed on behalf of each Guarantor
by the manual or facsimile signature of an Officer of each Guarantor. Each Guarantor hereby agrees
that the Note Guarantee set forth in Section 10.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. If an
Officer of a Guarantor whose signature is on the Note Guarantee no longer holds that office at the
time the Trustee authenticates the Note on which the Note Guarantee is endorsed, the Note Guarantee
shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture
on behalf of each Guarantor.




Section 10.09. Subordination of Subrogation and Other Rights.




          Each Guarantor hereby agrees that any claim against the Issuer that arises from the payment,
performance or enforcement of such Guarantor’s obligations under the Note Guarantee or this
Indenture, including, without limitation, any right of subrogation, shall be subject and
subordinate to, and no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Notes in accordance with the provisions
provided therefor in this Indenture.




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ARTICLE 11




MISCELLANEOUS




Section 11.01. TIA Controls.




          If any provision of this Indenture limits, qualifies or conflicts with another provision which
is required to be included in an indenture qualified under the TIA, the required provision shall
control.




Section 11.02. Notices.




          Any notices or other communications required or permitted hereunder or under any Security
Document (to the extent such Security Document requires notices or other communications required or
permitted thereunder to be delivered in accordance with this Section 11.02) shall be in writing in
the English language, and shall be sufficiently given if made by hand delivery, by telecopier or
registered or certified mail, postage prepaid, return receipt requested, addressed as follows:




          If to the Issuer or any Guarantor:



Hercules Offshore, Inc.

9 Greenway Plaza, Suite 2200

Houston, Texas 77046

Attention: General Counsel

Fax: (713) 350-5109




          If to the Trustee or the Collateral Agent:



U.S. Bank National Association

U.S. Bank Corporation

5555 San Felipe Street, Suite 1150

Houston, TX 77056

Attn: Steven Finklea

Tel: (713) 235-9208

Fax: (713) 235-9213




          The Issuer, any Guarantor, the Trustee, or the Collateral Agent by written notice to the
others may designate additional or different addresses for subsequent notices or communications.
Any notice or communication to the Issuer, any Guarantors, the Trustee, or the Collateral Agent,
shall be deemed to have been given or made as of the date so delivered if personally delivered;
when receipt is acknowledged, if telecopied; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of address shall not
be deemed to have been given until actually received by the addressee). Notwithstanding the
foregoing, the Trustee shall not be deemed to have been given notice until such notice is actually
received.




          Any notice or communication mailed to a Holder shall be mailed to it by first-class mail,
postage prepaid, at his address shown on the register kept by the Registrar.




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




          In case by reason of the suspension of regular mail service, or by reason of any other cause,
it shall be impossible to mail any notice as required by this Indenture or, if applicable, any
Security Document, then such method of notification as shall be made with the approval of the
Trustee shall constitute a sufficient mailing of such notice.




Section 11.03. Communications by Holders with Other Holders.




          Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Issuer, the Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).




Section 11.04. Certificate and Opinion as to Conditions Precedent.




          Upon any request or application by the Issuer or any Guarantor to the Trustee or the
Collateral Agent to take any action under this Indenture or any Security Document, the Issuer or
such Guarantor, as the case may be, shall furnish to the Trustee:





     (1) an Officers’ Certificate (which shall include the statements set forth in Section
11.05 below) stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture or any Security Document relating to the proposed action have
been complied with; and




     (2) an Opinion of Counsel (which shall include the statements set forth in Section
11.05 below) stating that, in the opinion of such counsel, all such conditions precedent, if
any, provided for in this Indenture or any Security Document relating to the proposed action
have been complied with.



Section 11.05. Statements Required in Certificate and Opinion.




          Each certificate and opinion with respect to compliance with a condition or covenant provided
for in this Indenture or Security Document shall include:





     (1) a statement that the person making such certificate or opinion has read such
covenant or condition and the definitions relating thereto;




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




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




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




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Section 11.06. Rules by Trustee and Agents.




          The Trustee may make reasonable rules for action by or at meetings of Holders. The Registrar
and Paying Agent may make reasonable rules for their functions.




Section 11.07. Legal Holidays.




          A “Legal Holiday” is a Saturday, a Sunday, a federally-recognized holiday or a day on which
banking institutions are not required to be open in the State of New York. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening period.




Section 11.08. Governing Law.




          THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.




Section 11.09. No Adverse Interpretation of Other Agreements.




          This Indenture may not be used to interpret another indenture, loan, security or debt
agreement of the Issuer or any Subsidiary thereof (other than a Security Document). No such
indenture, loan, security or debt agreement may be used to interpret this Indenture.




Section 11.10. No Recourse Against Others.




          A director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor
shall not have any liability for any obligations of the Issuer under the Notes, the Security
Documents or this Indenture or of any Guarantor under its Note Guarantee or the Security Documents
or for any claim based on, in respect of, or by reason of such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Notes and the Note Guarantees.




Section 11.11. Successors.




          All agreements of each of the Issuer and each Guarantor in this Indenture and the Notes shall
bind their respective successors. All agreements of the Trustee, any successor trustee and any
Paying Agents in this Indenture shall bind their respective successors.




Section 11.12. Consent to Jurisdiction; Waiver of Immunities.




          The Issuer and the Guarantors irrevocably consent to the jurisdiction of the competent courts
of the State of New York and the courts of the United States of America located in the Borough of
Manhattan, City and State of New York over any suit, action or proceeding with respect to this
Indenture or the transactions contemplated hereby. The Issuer and the Guarantors waive any
objection that they may have to the venue of any suit, action or proceeding with respect to this
Indenture or the transactions contemplated hereby in the competent courts of the State of New York
or the courts of the United States of America, in each case, located in the Borough of Manhattan,
City and State of New York, or that such suit, action or proceeding brought in the competent courts
of the State of New York or the United States of America, in each case, located in the Borough of
Manhattan, City and State of New York was brought in an inconvenient court and agrees not to plead
or claim the same.




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Section 11.13. Multiple Counterparts.




          The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall
be deemed an original, but all of them together represent one and the same agreement.




Section 11.14. Table of Contents, Headings, etc.




          The table of contents, cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions hereof.




Section 11.15. Separability.




          Each provision of this Indenture shall be considered separable and if for any reason any
provision which is not essential to the effectuation of the basic purpose of this Indenture or 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 11.16. Waiver of Jury Trial.




          EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS INDENTURE OR THE NOTES.




ARTICLE 12




COLLATERAL AND SECURITY




Section 12.01. Security Documents.




          (a) In order to secure the due and punctual payment of the principal and interest on the
Notes, when the same shall be due and payable, whether on an Interest Payment Date, at the Maturity
Date, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal
of and interest (to the extent permitted by law) on the Notes and performance of all other Note
Obligations, (i) the Issuer and the Guarantors have, on the Issue Date simultaneously with the
execution and delivery of this Indenture, entered into Security Documents granting the Trustee, as
Collateral Agent a Lien, subject only to Permitted Liens, on all property and assets (except as
provided in the Intercreditor Agreement) that are subject to a Lien securing the Issuer’s and the
Guarantors’ obligations under the Credit Agreement and (ii) the Issuer and the Guarantors agree
that, unless a Collateral Suspension is in effect, they will take all such action as shall be
required to ensure that the Note Obligations will at all times be secured by a Lien, subject only
to Permitted Liens, on all assets (except as provided in the Intercreditor Agreement) that in the
future are subjected to a Lien to secure the Issuer’s existing and future Senior Obligations, which
Lien shall be pursuant to documentation in form substantially similar to the documentation granting
the Lien securing the relevant Senior Obligations, except as otherwise contemplated by the
Intercreditor Agreement and except for differences consistent with the forms of Security Documents
entered into on the Issue Date.




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          (b) This Indenture and the Security Documents (other than the Intercreditor Agreement) are
subject to the terms, limitations and conditions set forth in the Intercreditor Agreement. Each
Holder of a Note, by its acceptance of a Note, is deemed to have authorized and instructed the
Collateral Agent to enter into the Intercreditor Agreement on its behalf, as its “Authorized
Representative” and “Senior Representative,” and to bind such Holder to the terms set forth in the
Intercreditor Agreement as the same may be in effect or may be amended from time to time in
accordance with its terms, and to perform its obligations and exercise its rights thereunder in
accordance therewith. In particular, each Holder of a Note, by its acceptance of a Note, is deemed
to consent to the provisions of the Intercreditor Agreement and the other Security Documents
providing for the release of the Liens on the Collateral and amendments to the Security Documents
without the consent of any Holder of Notes. Each Holder, by accepting a Note, consents and agrees
to all of the terms and provisions of the Security Documents, as the same may be amended from time
to time pursuant to the terms of the Security Documents and this Indenture, and authorizes and
directs the Collateral Agent to enter into the Security Documents on its behalf and on behalf of
such Holder and to perform its obligations and exercise its rights thereunder and in accordance
therewith. To the extent that any provision of this Indenture or any Security Document is not
consistent with or contradicts the Intercreditor Agreement, the Intercreditor Agreement will
govern.




          (c) Any Person which, after the Issue Date, becomes a Guarantor under this Indenture, shall,
upon becoming a Guarantor under this Indenture, become a party to each applicable Security Document
(on terms and conditions substantially the same as the then current Collateral Documents) with
respect to the assets or property of such Person that are Collateral, unless a Collateral
Suspension is in effect.




Section 12.02.
Recording, Registration and Opinions; Trustee’s Disclaimer Regarding Collateral.




          (a) Unless a Collateral Suspension is in effect, the Issuer and, if applicable, the Guarantors
shall take or cause to be taken all action required to perfect, maintain, preserve and protect the
Lien on the Collateral granted by the Security Documents (subject only to Permitted Liens and to
the terms of the Intercreditor Agreement), or that are otherwise required by Section 314(b) of the
TIA, including without limitation, arranging for the filing of financing statements, continuation
statements, mortgages and any instruments of further assurance, in such manner and in such places
as may be required by law fully to preserve and protect the rights of the Holders and the Trustee
and the Collateral Agent under this Indenture and the Security Documents to all property now or
hereafter at any time comprising the Collateral. The Issuer shall from time to time promptly pay
all financing, continuation statements and mortgage recording, registration and/or filing fees,
charges and taxes relating to this Indenture and the Security Documents, any amendments thereto and
any other instruments of further assurance required hereunder or pursuant to the Security
Documents. Neither the Trustee nor the Collateral Agent shall have any obligation to, or shall it
be responsible for any failure to, so register, file or record. Promptly after the execution and
delivery of this Indenture, the Issuer shall furnish to the Trustee and Collateral Agent an Opinion
of Counsel that complies with TIA Section 314(b)(1).




          (b) Unless a Collateral Suspension is in effect, the Issuer shall furnish to the Trustee and
the Collateral Agent no later than August 1 of each year, beginning with 2010, an Opinion of
Counsel which complies with Section 314(b)(2) of the TIA.




          (c) Notwithstanding anything to the contrary set forth in this Indenture or in any other
Security Document, neither the Trustee nor the Collateral Agent shall be responsible for the



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existence, genuineness or value of any of the Collateral, or for the creation, validity,
perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by
operation of law or by reason of any action or omission to act on its part hereunder, for the
validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the
validity of the title of the Issuer to the Collateral, for insuring the Collateral or for the
payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the
maintenance of the Collateral.




Section 12.03. Possession, Use and Release of Collateral. 




          (a) Each Holder, by accepting a Note, consents and agrees to the provisions of the
Intercreditor Agreement, the Security Documents and this Indenture governing the possession, use
and release of Collateral. Each Holder, by accepting a Note, consents and agrees that Collateral
may, and, as applicable, shall, be released or substituted in accordance with the terms of the
Intercreditor Agreement and the Security Documents.




          (b) In addition to the foregoing, Liens on Collateral securing the Notes will be entitled to
be released under the following circumstances:





     (1) in the event of satisfaction and discharge of this Indenture pursuant to Section
9.01 or a Legal Defeasance or Covenant Defeasance described in Section 9.02 or Section 9.03;
or




     (2) with the consent of the Holders in accordance with Section 8.02; or




     (3) if and so long as a Collateral Suspension is in effect.



          (c) The Collateral Agent shall execute and deliver all such authorizations and other
instruments and take such actions (and the Holders will be deemed to have consented to and
authorized the Collateral Agent to execute and deliver any such authorization or instrument and
take any such action) as shall reasonably be requested by the Controlling Agent (as defined in the
Intercreditor Agreement) to evidence, confirm and effectuate any release of Collateral provided for
in Section 12.03(a) or (b).




          (d) At the request of the Issuer and upon satisfaction of all applicable conditions to the
permitted release of any Collateral (including the Collateral Agent’s receipt of any indemnity
requested under Section 7.02), at the Issuer’s cost and expense, the Collateral Agent will execute
and deliver any documents, instructions or instruments evidencing any permitted release of the
Liens of the Collateral Agent on any Collateral. The Trustee and the Collateral Agent shall be
entitled to receive an Opinion of Counsel and Officers’ Certificate in connection with any release
of Liens evidencing compliance with the terms of this Indenture and the Security Documents.




          (e) The fair value of Collateral released from the Liens created by this Indenture and the
Security Documents pursuant to the terms of this Section 12.03 shall not be considered in
determining whether the aggregate fair value of the Collateral released from the Liens created by
this Indenture and the Security Documents in any calendar year exceeds the 10% threshold specified
in Section 3.14(d)(1) of the TIA.




Section 12.04. Suits to Protect Collateral.




          Subject to Sections 7.01 and 7.02 and the provisions of the Security Documents, the Trustee or
Collateral Agent may, in its sole discretion and without the consent of the Holders, on behalf of



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the Holders, and shall at the direction of the Holders of a majority in aggregate principal
amount of the then outstanding Notes, take all actions it deems necessary or appropriate in order
to enforce any of the terms of the Security Documents and collect and receive any and all amounts
payable in respect of the Note Obligations. Subject to the provisions of the Security Documents,
each of the Trustee and Collateral Agent shall have power, exercised in its sole discretion and
without the consent of the Holders, or at the direction of the Holders of a majority in aggregate
principal amount of the then outstanding Notes, to institute and to maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which
may be unlawful or in violation of any of the Security Documents or this Indenture, and such suits
and proceedings as the Trustee or Collateral Agent may deem expedient to preserve or protect its
interests and the interests of the Trustee or Collateral Agent and the Holders in the Collateral
(including power to institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the Lien and security interest created by this Indenture and the
Security Documents or be prejudicial to the interests of the Holders, the Trustee or the Collateral
Agent).




Section 12.05. Powers Exercisable by Receiver, Trustee or Collateral Agent.




          In case the Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article 12 and the Security Documents upon the Issuer and
the Guarantors with respect to the release, sale or other disposition of such property may be
exercised by such receiver, Trustee or the Collateral Agent, and an instrument signed by such
receiver or trustee shall be deemed the equivalent of any similar instrument of the Issuer or a
Guarantor or of any Officer or Officers of the Issuer or a Guarantor required by the provisions of
this Article 12.




Section 12.06. Determinations Relating to Collateral.




          In the event (i) the Trustee or Collateral Agent shall receive any written request from the
Issuer or any Guarantor under any Security Document for consent or approval with respect to any
matter or thing relating to any Collateral or the Issuer’s or any Guarantor’s obligations with
respect thereto, (ii) there shall be required from the Trustee or Collateral Agent under the
provisions of any Security Document any performance or the delivery of any instrument or (iii) a
Trust Officer of the Trustee or the Collateral Agent shall receive written notice of any
nonperformance by the Issuer or any Guarantor of any covenant or any breach of any representation
or warranty of the Issuer or any Guarantor set forth in any Security Document, and, in the case of
clause (i), (ii) or (iii) above, the Trustee’s reasonably believes that the Trustee’s response or
action is not otherwise specifically contemplated, or the Trustee does not have the discretion to
undertake such response or action, hereunder or under the applicable Security Documents, then, in
each such event, the Trustee or Collateral Agent shall, within 30 Business Days, advise the
Holders, in writing and at the Issuer’s expense, of the matter or thing as to which consent has
been requested or the performance or instrument required to be delivered or the nonperformance or
breach of which the Trustee has received written notice. The Holders of not less than a majority
in aggregate principal amount of the then outstanding Notes pursuant to Section 6.05 shall have the
exclusive authority to direct the response of the Trustee or the Collateral Agent, as the case may
be, to any of the circumstances contemplated in clauses (i), (ii) and (iii) above.




Section 12.07. Certificates of the Issuer and the Guarantors.




          Whether or not this Indenture is then required to be qualified under the TIA, the Issuer and
the Guarantors shall comply (or cause compliance) with Section 313(b) of the TIA, relating to



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reports, and Section 314(d) of the TIA, relating to the release of property from the Lien of
this Indenture and the Security Documents and relating to the substitution therefor of any property
to be subjected to the Lien of this Indenture and the Security Documents. Any certificate or
opinion required by Section 314(d) of the TIA may be made by an Officer of the Issuer or a
Guarantor, as applicable, except in cases where Section 314(d) of the TIA requires that such
certificate or opinion be made by an independent Person, which Person shall be an independent
engineer, appraiser or other expert selected by the Issuer. Notwithstanding anything to the
contrary in this Section 12.07, the Issuer will not be required to comply with all or any portion
of Section 314(d) of the Trust Indenture Act if it reasonably determines that under the terms of
Section 314(d) of the Trust Indenture Act or any interpretation or guidance as to the meaning
thereof of the SEC and its staff, including “no action” letters or exemptive orders, all or any
portion of Section 314(d) of the Trust Indenture Act is inapplicable to any release or series of
releases of Collateral.




Section 12.08. Certificates of the Trustee as Collateral Agent.




          In the event that the Issuer or any Guarantor wishes to obtain from the Collateral Agent the
release of Collateral in accordance with this Indenture and the Security Documents and has
delivered the certificates and documents required by this Indenture and the Security Documents, the
Collateral Agent shall determine whether it has received all documentation required by Section
314(d) of the TIA in connection with such release based on the Opinion of Counsel delivered
pursuant to Section 12.02. The Collateral Agent, however, shall have no duty to confirm the
legality or validity of such documents, its sole duty being to certify that it has received such
documentation which on their face conform to Section 314(d) of the TIA.




Section 12.09. Purchaser Protected.




          No purchaser or grantee of any property or rights purporting to be released herefrom shall be
bound to ascertain the authority of the Trustee or Collateral Agent to execute the release or to
inquire as to the existence of any conditions herein prescribed for the exercise of such authority;
nor shall any purchaser or grantee of any property or rights permitted by this Indenture to be sold
or otherwise disposed of by the Issuer or any Guarantor be under any obligation to ascertain or
inquire into the authority of the Issuer or such Guarantor to make such sale or other disposition.




Section 12.10. Collateral Suspension.




          (a) The obligations of the Issuer and the Guarantors to maintain and grant Liens on Collateral
securing the Note Obligations under this Indenture or the Security Documents (the “Collateral
Obligations”) may, by written notice of such election given by the Issuer to the Collateral
Agent and the Holders of Notes (a “Collateral Suspension Notice”), be suspended if the
aggregate principal amount of Indebtedness under Credit Facilities secured by Liens on any assets
or properties of the Issuer or any Restricted Subsidiary does not exceed the lesser of (a) $375.0
million and (b) 15.0% of the Issuer’s Consolidated Tangible Assets as determined based on the
Issuer’s most recent available quarterly financial statements, provided that no Default or Event of
Default has occurred and is continuing at the time of delivery of the Collateral Suspension Notice
(the “Collateral Suspension Requirement”). Upon delivery of a valid Collateral Suspension
Notice to the Trustee (as Collateral Agent), together with an Officers’ Certificate and Opinion of
Counsel stating that the Collateral Suspension Requirement has been satisfied, the Issuer and the
Guarantors shall be entitled to the release of all Liens on the Collateral securing the Note
Obligations in accordance with Section 12.03. The period during which the Collateral Obligations
are suspended in accordance with the foregoing is referred to as a “Collateral Suspension”.




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          (b) If, after any such release of Liens on Collateral, the aggregate principal amount of
Indebtedness under Credit Facilities secured by Liens on any assets or properties of the Issuer or
any Restricted Subsidiary, exceeds the greater of (a) $375.0 million and (b) 15.0% of the Issuer’s
Consolidated Tangible Assets as determined based on the Issuer’s most recent available quarterly
financial statements, then the Collateral Obligations of the Issuer and the Guarantors will be
reinstated and the Issuer and the Guarantors must within 30 days comply with the requirements of
clause (ii) of Section 12.01(a).




Section 12.11.
Authorization of Actions to Be Taken by the Collateral Agent Under the Security Documents.




          (a) U.S. Bank National Association is hereby appointed to act in its capacity as the
Collateral Agent, as mortgage trustee under the Ship Mortgages, and as “Authorized Representative,”
the “Senior Representative” and, if it becomes the “Major Additional Senior Representative” under
the Intercreditor Agreement, the “Controlling Agent” of the Holders under the Intercreditor
Agreement. Subject to the provisions of the Intercreditor Agreement and the applicable Security
Documents:





     (1) the Collateral Agent shall execute and deliver the Security Documents and act in
accordance with the terms thereof;




     (2) the Collateral Agent may, in its sole discretion and without the consent of the
Trustee or the Holders, take all actions it deems necessary or appropriate in order to:




     (A) enforce any of the terms of the Security Documents; and




     (B) collect and receive any and all amounts payable in respect of the Note Obligations
of the Issuer and the Guarantors to the Holders, the Collateral Agent or the Trustee under
this Indenture, the Notes, the Notes Guarantees and the Security Documents.



          (b) The Trustee on behalf of itself and the Holders hereby appoints the Collateral Agent, as
trustee to hold the Ship Mortgages, and the Collateral Agent hereby accepts such appointment and
declares that it will hold the Ship Mortgages in trust under the terms set forth in the Ship
Mortgages for the use and benefit of the Holders in accordance with and subject to all of the terms
and conditions contained in this Agreement, and agrees to perform the same and to receive, manage
and disburse all monies at any time constituting part of the Collateral in accordance with the
terms hereof. The Collateral Agent , in so receiving, managing, and disbursing such monies, shall
exercise the same degree of care that is customarily used by similar institutions in similar
circumstances.



[Signature page follows]



97









 








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




	 	 	 	 	 
	 	HERCULES OFFSHORE, INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	James W. Noe 	 
	 	 	Senior Vice President, General Counsel, Chief

Compliance Officer and Secretary 	 
	 
	 	CLIFFS DRILLING COMPANY

CLIFFS DRILLING TRINIDAD L.L.C.

HERCULES DRILLING COMPANY, LLC 

THE HERCULES OFFSHORE DRILLING


       COMPANY LLC


THE OFFSHORE DRILLING COMPANY

THE ONSHORE DRILLING COMPANY

TODCO AMERICAS INC.

TODCO INTERNATIONAL INC.

TODCO MANAGEMENT SERVICES, INC.

TODCO MEXICO INC.,

HERCULES OFFSHORE LIFTBOAT COMPANY LLC

       as Guarantors

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	James W. Noe 	 
	 	 	Vice President and Secretary 	 
	 
	 	HERCULES LIFTBOAT COMPANY, LLC

HERCULES OFFSHORE SERVICES LLC

       as Guarantors

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Secretary 	 



S-1









 






	 	 	 	 	 



	 	 	 	 	 
	 	HERCULES OFFSHORE HOLDINGS, LTD.

HERCULES OFFSHORE MIDDLE EAST, LTD.


       as Guarantors

 	 
	 	By:  	/s/ Don P. Rodney
 	 
	 	 	Name:  	Don P. Rodney 	 
	 	 	Title:  	President 	 
	 
	 	DELTA TOWING HOLDINGS, LLC

DELTA TOWING, LLC


       as Guarantors

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	President and Chief Executive Officer 	 



S-2









 






	 	 	 	 	 



	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

       as Trustee

 	 
	 	By:  	/s/ Steven Finklea
 	 
	 	 	Name:  	Steven Finklea 	 
	 	 	Title:  	Vice President 	 
	 




S-3











 





EXHIBIT A




CUSIP No.: [                     ]




HERCULES OFFSHORE, INC.




10.50% SENIOR SECURED NOTE DUE 2017




	 	 	 	 	 
	No.

	 	 	$	 






          HERCULES OFFSHORE, INC., a Delaware corporation (the “Issuer,” which term includes any
successor entity), for value received promises to pay to                                          or registered assigns,
the principal sum of [                               ] DOLLARS on October 15, 2017.




          Interest Payment Dates: April 15 and October 15, commencing April 15, 2010.




          Record Dates: April 1 and October 1.




          Reference is made to the further provisions of this Note contained herein and the Indenture
(as defined), which will for all purposes have the same effect as if set forth at this place.




A-1









 








          IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by
its duly authorized Officers.




	 	 	 	 	 
	 	HERCULES OFFSHORE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-2









 






	 	 	 	 	 



Certificate of Authentication




          This is one of the 10.50% Senior Secured Notes due 2017 referred to in the within-mentioned
Indenture.




	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION

       as Trustee

 	 
	 	By:  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 




     Dated:                                         



A-3









 





(REVERSE OF SECURITY)




10.50% SENIOR SECURED NOTE DUE 2017




          1. Interest. Hercules Offshore, Inc., a Delaware corporation (the “Issuer”),
promises to pay interest on the principal amount of this Note at the rate per annum shown above.
Interest on the Notes will accrue from the most recent date on which interest has been paid or, if
no interest has been paid, from October 20, 2009. The Issuer will pay interest semi-annually in
arrears on each Interest Payment Date, commencing April 15, 2010. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.




          The Issuer shall pay interest on overdue principal and on overdue installments of interest
(without regard to any applicable grace periods) to the extent lawful from time to time on demand
at the rate then borne by the Notes.




          2. Method of Payment. The Issuer shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business on the April 1 or
October 1 immediately preceding the Interest Payment Date (whether or not such day is a Business
Day) even if the Notes are cancelled on registration of transfer or registration of exchange after
such Record Date. Holders must surrender Notes to a Paying Agent to collect payments of principal.
Payments of principal and interest will be made in money of the United States that at the time of
payment is legal tender for payment of public and private debts. If a Holder of Notes in
certificated form has given wire transfer instructions to the Issuer at least ten Business Days
prior to the applicable payment date, the Issuer will make all payments on such Holder’s Notes by
wire transfer of immediately available funds to the account specified in those instructions.
Otherwise, payments on the Notes will be made at the office or agency of the Paying Agent unless
the Issuer elects to make interest payments by check mailed to the Holders at their addresses set
forth in the register of Holders.




          3. Paying Agent and Registrar. Initially, U.S. Bank National Association, a national
banking association (the “Trustee”), will act as Paying Agent and Registrar. The Issuer
may change any Paying Agent, Registrar or co-Registrar without notice to the Holders. Neither the
Issuer nor any of its Affiliates may act as Paying Agent but may act as Registrar or co-Registrar.
The Issuer has designated the Corporate Trust Office of the Trustee as its office where Notes may
be surrendered for registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Issuer in respect of the Notes may be served.




          4. Indenture. The Issuer issued this Note under an Indenture, dated as of October 20,
2009 (the “Indenture”), by and among the Issuer, the Guarantors and the Trustee. This Note
is one of a duly authorized issue of Initial Notes of the Issuer designated as its 10.50% Senior
Secured Notes due 2017 (the “Notes”). The Notes include the Initial Notes and the
Additional Notes, if any, and the Exchange Notes issued in exchange for the Initial Notes and
Additional Notes, if any, issued pursuant to the Indenture. The Initial Notes, the Additional
Notes and the Exchange Notes are treated as a single class of securities under the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. 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. Code Sections 77aaa-77bbbb) (the
“TIA”), as in effect on the date of the Indenture. Notwithstanding anything to the
contrary herein, the Notes are subject to all such terms, and Holders are referred to the Indenture
and the TIA for a statement of them. The Notes are general obligations of the Issuer. The Notes
and the Note Guarantees are secured by first priority Liens (subject to Permitted Liens) in the
Collateral, granted




A-4









 







to the Trustee (as Collateral Agent) for the benefit of the Holders of the Notes, as provided in the
Indenture and the Security Documents.




          5. Redemption.




          (a) Optional Redemption. The Notes will be redeemable, at the Issuer’s option, in
whole at any time or in part from time to time, on and after October 15, 2013 at the following
Redemption Prices (expressed as percentages of the principal amount thereof) if redeemed during the
twelve-month period commencing on October 15 of the applicable year set forth below, plus, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date (subject
to the right of Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date):




	 	 	 	 	 
	Year	 	Percentage	 
	2013
	 	 	105.2500	%
	2014
	 	 	102.6250	%
	2015
	 	 	101.3125	%
	2016 and thereafter
	 	 	100.0000	%






          (b) Redemption at Applicable Premium. In addition, prior to October 15, 2013, the
Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, at a
Redemption Price equal to 100% of the principal amount of the Notes to be redeemed, plus the
Applicable Premium as of, and accrued and unpaid interest and Liquidated Damages, if any, to the
applicable Redemption Date (subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant Interest Payment Date).




          (c) Redemption upon Consummation of Certain Qualified Equity Offerings.
Notwithstanding the foregoing, at any time, or from time to time, prior to October 15, 2012, the
Issuer may on any one or more occasions, at its option, use all or any portion of the net cash
proceeds of one or more Qualified Equity Offerings to redeem Notes at a Redemption Price equal to
110.50% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest and
Liquidated Damages, if any, to the date of redemption (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant Interest Payment Date); provided
that at least 65% of the aggregate principal amount of Notes originally issued on the Issue Date
remains outstanding immediately after giving effect to any such redemption. In order to effect the
foregoing redemption with the proceeds of any Qualified Equity Offering, the Issuer shall
consummate such redemption not more than 90 days after the consummation of any such Qualified
Equity Offering.




          6. Notice of Redemption. Notice of redemption under paragraph 5 of this Note will be
mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder to be
redeemed at such Holder’s registered address, except that redemption notices may be mailed more
than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction
and discharge of the Indenture.




          Except as set forth in the Indenture, if money for the redemption of the Notes called for
redemption shall have been deposited with the Paying Agent for redemption on such redemption date,
then, unless the Issuer defaults in the payment of such Redemption Price plus accrued interest, if
any, the Notes called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest, if any.




A-5









 








          7. Offers to Purchase. The Indenture provides that, in certain circumstances
following an Asset Sale (as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations contained therein, the
Issuer will make an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.




          8. [Registration Rights. Except as set forth in the next sentence, pursuant to a
Registration Rights Agreement among the Issuer, the Guarantors and the Initial Purchasers of the
Notes, the Issuer and the Guarantors are obligated to use reasonable efforts to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right to exchange this Note
for notes of a separate series issued under the Indenture (or a trust indenture substantially
identical to the Indenture in accordance with the terms of the Registration Rights Agreement) which
have been registered under the Securities Act, in like principal amount and having substantially
identical terms as the Notes. However, notwithstanding the previous sentence, the Registration
Rights Agreement provides that the Issuer is not required to consummate the exchange offer with
respect to any Notes that are freely tradable under Rule 144 under the Securities Act before the
required date or for the consummation of such exchange offer if (i) on or before such date, the
Issuer has afforded the opportunity to the Holders of such Notes to have the restrictive legend on
their Notes removed and (ii) the unrestricted Notes would not longer bear a restricted CUSIP
number. The Holders shall be entitled to receive Liquidated Damages by way of certain additional
interest payments in the event such exchange offer is not consummated and upon certain other
conditions, all pursuant to and in accordance with the terms of the Registration Rights Agreement.]
[Omit for Exchange Notes]




          9. Denominations; Transfer; Exchange. The Notes are in registered form, without
coupons, in denominations of $2,000 and integral multiples of $1,000 in excess thereof. A Holder
shall register the transfer or exchange of Notes in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for redemption.




          10. Persons Deemed Owners. The registered holder of a Note shall 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 and the Paying Agent will pay the money back to the Issuer.
After that, Holders entitled to money must look to the Issuer for payment as general creditors
unless an “abandoned property” law designates another Person.




          12. Legal Defeasance and Covenant Defeasance. If the Issuer at any time deposits with
the Trustee U.S. legal tender or U.S. Government Obligations sufficient to pay the principal of and
interest on the Notes to redemption or the scheduled due dates and complies with the other
provisions of the Indenture relating to Covenant Defeasance, the Issuer will be discharged from
certain provisions of the Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes). The Notes are also subject to Legal
Defeasance as provided in Article 9 of the Indenture.




          13. Amendments, Supplements, and Waivers. Subject to certain exceptions, the
Indenture, the Security Documents or the Notes may be amended or supplemented with the consent of
the




A-6









 







Holders of at least a majority in aggregate principal amount of the Notes then outstanding,
and any existing Default or Event of Default or noncompliance with any provision may be waived with
the consent of the Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture, the Security Documents or the Notes to, among other things, cure any
ambiguity, defect, omission, mistake or inconsistency, provide for uncertificated Notes in addition
to or in place of certificated Notes or make any other change that does not adversely affect in any
material respect the rights of any Holder.




          14. Restrictive Covenants. The Indenture imposes certain limitations on the ability
of each of the Issuer and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness, make payments in respect of its Equity Interests, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting Restricted Subsidiaries, sell
assets, create Liens, make certain Investments, merge or consolidate with any other Person, or
sell, transfer, lease, convey or otherwise dispose of all or substantially all of its assets. Such
limitations are subject to a number of important qualifications and exceptions. The Issuer must
annually report to the Trustee on compliance with such limitations.




          15. Successor Entity. When a successor entity assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes, the Security Documents and the
Indenture, and immediately before and thereafter no Default or Event of Default exists and certain
other conditions are satisfied, the predecessor entity will be released from those obligations.




          16. Defaults and Remedies. Events of Default are set forth in the Indenture. If an
Event of Default (other than an Event of Default specified in Section 6.01(g) or (h)) shall occur
and be continuing, the Trustee, by written notice to the Issuer, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding by written notice to the Issuer and the
Trustee, may declare (an “acceleration declaration”) all amounts owing under the Notes to be due
and payable (a) if there is no Indebtedness outstanding under any Senior Facility at such time,
immediately and (b) if otherwise, according to the terms of the Intercreditor Agreement, unless a
Collateral Suspension is in effect, and if a Collateral Suspension is in effect, upon the earlier
of (x) the final maturity (after giving effect to any applicable grace period or extensions
thereof) or an acceleration of any Indebtedness under any Credit Facility prior to the express
final stated maturity thereof and (y) five Business Days after the Representative under each Credit
Facility receives the acceleration declaration, but, in the case of this clause (b), only if such
Event of Default is then continuing. No such rescission shall affect any subsequent Default or
impair any right consequent thereto. If an Event of Default specified in Section 6.01(g) or (h)
occurs with respect to the Issuer and is continuing, then, to the extent permitted by applicable
law, all unpaid principal of and accrued and unpaid interest on all of the outstanding Notes shall
ipso facto become and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.




          17. Trustee Dealings with the Issuer. The Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and perform services for
the Issuer, and may otherwise deal with the Issuer, its Subsidiaries or their respective Affiliates
as if it were not the Trustee.




          18. No Recourse Against Others. As more fully described in the Indenture, no
director, officer, employee, stockholder or incorporator of the Issuer shall have any liability for
any obligations of the Issuer under the Notes or this Indenture, or of any Guarantor under its Note
Guarantees or the Security Documents or for any claim based on, in respect of or by reason of such
obligations or




A-7









 







their creation. Each Holder by accepting a Note waives and releases all such liability. Such
waiver and release are part of the consideration for the issuance of the Notes.




          19. Authentication. This Note shall not be valid until the Trustee or Authenticating
Agent manually signs the certificate of authentication on this Note.




          20. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.




          21. Abbreviations and Defined Terms. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST
(= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).




          22. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on
the Notes as a convenience to the Holders. No representation is made as to the accuracy of such
numbers as printed on the Notes and reliance may be placed only on the other identification numbers
printed hereon.




          23. Indenture and Security Documents. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture and the Security Documents (including,
without limitation, the terms and provisions of the Intercreditor Agreement), as the same may be
amended from time to time.




          The Issuer will furnish to any Holder upon written request and without charge a copy of the
Indenture, the Registration Rights Agreement or any Security Document. Requests may be made to:
Hercules Offshore, Inc., Attention: General Counsel, 9 Greenway Plaza, Suite 2200, Houston, Texas
77046, Fax: (713) 350-5109.




A-8









 








FORM OF NOTE GUARANTEE NOTATION




          For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in, and
subject to the provisions of, the Indenture dated as of October 20, 2009 (the “Indenture”)
among Hercules Offshore, Inc. (the “Company”), the Guarantors party thereto and U.S. Bank
National Association, a national banking association, as trustee (the “Trustee”), that the
principal of and interest and Liquidated Damages, if any, on the Notes will be promptly paid in
full when due, subject to any applicable grace period, whether at the Maturity Date, by
acceleration, redemption or otherwise, and interest on the overdue principal of and interest and
Liquidated Damages, if any, on the Notes, if lawful, and all other obligations of the Company to
the Holders or the Trustee under the Indenture or under the Notes, will be promptly paid in full or
performed, all in accordance with the terms thereof. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Indenture (including the Subsidiary Guarantee)
are set forth in Article 10 of the Indenture, and reference is hereby made to the Indenture for the
precise terms of the Subsidiary Guarantee and the conditions to the release thereof. Each Holder
of a Note, by accepting the same agrees to and shall be bound by such provisions.




          Capitalized terms used but not defined herein have the meanings given to them in the
In-denture.




	 	 	 	 	 
	 	[NAME OF EACH GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




A-9











 





ASSIGNMENT FORM




          If you the Holder want to assign this Note, fill in the form below and have your signature
guaranteed:



I or we assign and transfer this Note to:




 





 





 




(Print or type name, address and zip code and

social security or tax ID number of assignee)



and irrevocably appoint
                                                                                                                                                                              ,

agent to transfer this Note on the books of Hercules Offshore, Inc. The agent may substitute
another to act for him.




	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	(Sign exactly as your name appears on the

other side of this Note)






	 	 	 	 
	Medallion Guarantee: 
	 	 	 
	 

	 

	 	 





Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.




A-10 









 








[OPTION OF HOLDER TO ELECT PURCHASE]




          If you want to elect to have this Note purchased by Hercules Offshore, Inc. pursuant to
Section 4.12 or Section 4.15 of the Indenture, check the appropriate box:




Section 4.12 o

Section 4.15 o




          If you want to elect to have only part of this Note purchased by Hercules Offshore, Inc.
pursuant to Section 4.12 or Section 4.15 of the Indenture, state the amount you elect to have
purchased:




$                                         




	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	NOTICE: The signature on this assignment
must
correspond with the name as it appears
upon
the face of the within Note in every

particular without alteration or enlargement

or any change whatsoever and be guaranteed
 by
the endorser’s bank or broker.






	 	 	 	 	 
	Medallion Guarantee:
	 	 	 	 
	 

	 	 

	 	 





Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.





A-11 









 








EXHIBIT B




CERTIFICATE TO BE DELIVERED UPON EXCHANGE

OR REGISTRATION OF TRANSFER OF NOTES




     Re: Hercules Offshore, Inc. ( “Hercules Offshore, Inc.”)


           10.50% Senior Secured Notes due 2017 (the “Notes”) 




          This Certificate relates to $                     principal amount of Notes held in the form of*                      a
beneficial interest in a Global Note or*                      Certificated Notes by                      (the
“Transferor”).




          The Transferor:




          o       has requested by written order that the Registrar deliver in exchange for its
beneficial interest in the Global Note held by the Depository a Certificated Note or Certificated
Notes in definitive, registered form of authorized denominations and an aggregate principal amount
equal to its beneficial interest in such Global Note (or the portion thereof indicated above); or




          o       has requested by written order that the Registrar exchange or register the transfer of
a Certificated Note or Certificated Notes.




          In connection with such request and in respect of each such Note, the Transferor does hereby
certify that the Transferor is familiar with the Indenture relating to the above captioned Notes
and the restrictions on transfers thereof as provided in Section 2.16 of such Indenture, and that
the transfer of the Notes does not require registration under the Securities Act of 1933, as
amended (the “Securities Act”), because*:




          o       Such Note is being acquired for the Transferor’s own account, without transfer (in
satisfaction of Section 2.16 of the Indenture).




          o       Such Note is being transferred to a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act), in reliance on Rule 144A.




          o       Such Note is being transferred to an institutional “accredited investor” (within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act) which
delivers a certificate to the Trustee in the form of Exhibit C to the Indenture. [An
Opinion of Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.]




          o       Such Note is being transferred in reliance on Regulation S under the Securities Act
and a transfer certificate for Regulation S transfers in the form of Exhibit D to the
Indenture accompanies this certification. [An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this certification.]




          o       Such Note is being transferred in reliance on Rule 144 under the Securities Act. [An
Opinion of Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.]




          o       Such Note is being transferred in reliance on and in compliance with an exemption from
the registration requirements of the Securities Act other than Regulation S, Rule 144A or Rule 144
under the Securities Act to a Person other than an institutional “accredited investor.” [An





B-1 









 







Opinion of Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this certification.]




	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	[INSERT NAME OF TRANSFEROR]
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	[Authorized Signatory]
	 
	 	 	 	 	 	 	 	 	 	 
	Date:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 







 




			
	*	 	Check applicable box.




B-2 









 










EXHIBIT C




Form of Transferee Letter of Representation




U.S. Bank National Association

[     ] Division

[     ]; [     ]

[          ]




Ladies and Gentlemen:




          This certificate is delivered with respect to a transfer of $                     principal amount of the
10.50% Senior Secured Notes due 2017 of Hercules Offshore, Inc. (“Hercules Offshore, Inc.”)
and any guarantee thereof (the “Notes”), or a beneficial interest therein, to the
undersigned transferee.




          The undersigned represents and warrants to you that:




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




          2. We acknowledge that we have had access to such financial and other information, and have
been afforded the opportunity to ask such questions of representatives of Hercules Offshore, Inc.
and receive answers thereto, as we deem necessary.




          3. We understand that the Notes have not been registered under the Securities Act and, unless
so registered, may not be sold except as permitted in the following sentence. We agree on our own
behalf and on behalf of any investor account for which we are purchasing Notes that we will not
prior to the date (the “Resale Restriction Termination Date”) that is (a) one year after
the later of the original issuance of the Notes and the last date on which Hercules Offshore, Inc.
or any affiliate of Hercules Offshore, Inc. was the owner of such Notes (or any predecessor
thereto) or (b) such later date, if any, as may be required by any subsequent change in applicable
law, offer, sell or otherwise transfer such Notes except (a) to Hercules Offshore, Inc. or any
subsidiary of Hercules Offshore, Inc., (b) inside the United States to a “qualified institutional
buyer” in compliance with Rule 144A under the Securities Act, (c) inside the United States to an
“institutional accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to the Trustee a signed letter substantially in the form of this letter, (d) outside
the United States in an offshore transaction in compliance with Rule 904 under the Securities Act,
(e) pursuant to Rule 144 under the Securities Act, (f) pursuant to any other available exemption
from the registration requirements of the Securities Act or (g) pursuant to an effective
registration statement under the Securities Act. We acknowledge that Hercules Offshore, Inc. and
the Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the applicable Notes




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pursuant to clause (c), (e) or (f) above to require the delivery of an opinion of counsel
satisfactory to Hercules Offshore, Inc. and the Trustee.




          4. We understand that the Trustee will not be required to accept for registration of transfer
any Notes acquired by us, except upon presentation of evidence satisfactory to Hercules Offshore,
Inc. and the Trustee that the foregoing restrictions on transfer have been complied with. We
further understand that any Notes purchased by us in the form of definitive physical certificates
will bear a legend reflecting the substance of paragraph 3 of this letter. We further agree to
provide to any Person acquiring any of the Notes from us a notice advising such Person that
transfers of such Notes are restricted as stated herein and that certificates representing such
Notes will bear a legend to that effect.




          5. We understand that Hercules Offshore, Inc. and the Trustee and others are entitled to rely
upon the truth and accuracy of our acknowledgments, representations and agreements set forth
herein, and we agree to notify you promptly in writing if any of our acknowledgments,
representations or agreements herein ceases to be accurate and complete. You are also irrevocably
authorized to produce this letter or a copy hereof to any interested party in any administrative or
legal proceeding or official inquiry with respect to the matters covered hereby.




          6. We represent to you that we have full power to make the foregoing acknowledgments,
representations and agreements on our own behalf and on behalf of any investor account for which we
are acting as fiduciary agent.




          As used herein, the terms “offshore transaction,” “United States” and “U.S. person” have the
respective meanings given to them in Regulation S under the Securities Act.




          THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.




	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	TRANSFEREE:
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[NAME]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 





	 	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 





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EXHIBIT D




Form of Certificate to Be

Delivered in Connection

with Regulation S Transfers




                                        ,
                    




U.S. Bank National Association

[     ] Division

[      ]; [      ]

[           ]




Attn: [                    ]




Re:       Hercules Offshore, Inc. 10.50% Senior Secured Notes due 2017 (the “Notes”)




Ladies and Gentlemen:




          In connection with our proposed sale of $                     aggregate principal amount of the Notes or
a beneficial interest therein, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the “Securities
Act”), and, accordingly, we represent that:





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




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




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




     (4) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act; and




     (5) we have advised the transferee of the transfer restrictions applicable to the
Notes.



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          You and Hercules Offshore, Inc. are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered hereby. Defined terms
used herein without definition have the respective meanings provided in Regulation S.




	 	 	 	 	 
	 	Very truly yours,




[Name of Transferor]

 	 
	 	By:  	 	 



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EXHIBIT E




FORM OF SUPPLEMENTAL INDENTURE




          SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of [     ], 20[ ]
among [      ] (the “New Guarantor”), a subsidiary of Hercules Offshore, Inc. (or its
successor), a Delaware corporation (the “Issuer”), the Guarantors (the “Existing
Guarantors”) under the Indenture referred to below, and U.S. Bank National Association, as
trustee under the Indenture referred to below (the “Trustee”).




W I T N E S S E T H :




          WHEREAS the Issuer has heretofore executed and delivered to the Trustee an Indenture (as such
may be amended from time to time, the “Indenture”), dated as of October 20, 2009 providing
for the issuance of its 10.50% Senior Secured Notes due 2017 (the “Notes”);




          WHEREAS under certain circumstances the Issuer is required to cause the New Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor
shall unconditionally guarantee all of the Issuer’s obligations under the Notes pursuant to a Note
Guarantee on the terms and conditions set forth herein; and




          WHEREAS pursuant to Section 8.01 of the Indenture, the Trustee, the Issuer and the Existing
Guarantors are authorized to execute and deliver this Supplemental Indenture;




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




          1. Definitions. (a) Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.




          (b) For all purposes of this Supplemental Indenture, except as otherwise herein expressly
provided or unless the context otherwise requires: (i) the terms and expressions used herein shall
have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) 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.




          2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally
with all other Guarantors, to guarantee the Issuer’s obligations under the Notes on the terms and
subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other
applicable provisions of the Indenture. From and after the date hereof, the New Guarantor shall be
a Guarantor for all purposes under the Indenture and the Notes.




          3. 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 heretofore or
hereafter authenticated and delivered shall be bound hereby.




E-1 









 








          4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.




          5. Trustee Makes No Representation. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture
or for or in respect of the recitals contained herein, all of which are made solely by the Issuer.




          6. Multiple Counterparts. The parties may sign multiple counterparts of this
Supplemental Indenture. Each signed counterpart shall be deemed an original, but all of them
together represent one and the same agreement.




          7. Headings. The headings of this Supplemental Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and shall in no way modify
or restrict any of the terms or provisions hereof.




E-2 









 








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




	 	 	 	 	 
	 	[NEW GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	HERCULES OFFSHORE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



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	 	[EXISTING GUARANTORS]:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION,

        as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




E-4