Exhibit 4.1


 


VANGUARD NATURAL
RESOURCES, LLC


VNR FINANCE
CORP.


 


AND EACH OF
THE

GUARANTORS PARTY HERETO


 


7.0% SENIOR
SECURED SECOND LIEN NOTES


DUE 2023


 


U.S. BANK
NATIONAL ASSOCIATION


as Trustee
and Collateral Trustee


 





 






 


INDENTURE


 


Dated as of
February 10, 2016


 





 






 


Reference is made to the Intercreditor Agreement,
dated as of February 10, 2016, between CITIBANK, N.A., as Priority Lien Agent (as defined therein), and U.S. BANK NATIONAL ASSOCIATION,
as Second Lien Collateral Agent (as defined therein). Each holder of Notes (as defined herein), by its acceptance of such Notes,
(i) consents to the subordination of Liens provided for in the Intercreditor Agreement, (ii) agrees that it will be bound by, and
will take no actions contrary to, the provisions of the Intercreditor Agreement and (iii) authorizes and instructs the Second Lien
Collateral Agent on behalf of each Second Lien Secured Party (as defined therein) to enter into the Intercreditor Agreement as
Second Lien Collateral Agent on behalf of such Second Lien Secured Parties. The foregoing provisions are intended as an inducement
to the lenders under the Credit Agreement (as defined herein) to extend credit to the Company (as defined herein) and such lenders
are intended third party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.


 




     


     


    

 


TABLE OF CONTENTS





 


	 	 	Page
	 	 	 
	Article I. DEFINITIONS AND INCORPORATION BY REFERENCE	1
	 	 	 
	Section 1.01	Definitions	1
	Section 1.02	Other Definitions	41
	Section 1.03	[Reserved.]	42
	Section 1.04	Rules of Construction	42
	 	 	 
	Article II. THE NOTES	42
	 	 	 
	Section 2.01	Form and Dating	42
	Section 2.02	Execution and Authentication	43
	Section 2.03	Registrar and Paying Agent	43
	Section 2.04	Paying Agent to Hold Money in Trust	44
	Section 2.05	Holder Lists	44
	Section 2.06	Transfer and Exchange	44
	Section 2.07	Replacement Notes	56
	Section 2.08	Outstanding Notes	57
	Section 2.09	Treasury Notes	57
	Section 2.10	Temporary Notes	57
	Section 2.11	Cancellation	58
	Section 2.12	Defaulted Interest	58
	 	 	
	Article III. REDEMPTION AND PREPAYMENT	58
	 	 	 
	Section 3.01	Notices to Trustee	58
	Section 3.02	Selection of Notes to Be Redeemed	59
	Section 3.03	Notice of Redemption	59
	Section 3.04	Effect of Notice of Redemption	60
	Section 3.05	Deposit of Redemption or Purchase Price	60
	Section 3.06	Notes Redeemed or Purchased in Part	61
	Section 3.07	Optional Redemption	61
	Section 3.08	Mandatory Redemption	62
	Section 3.09	Offer to Purchase by Application of Excess Proceeds	62
	 	 	 
	Article IV. COVENANTS	64
	 	 	 
	Section 4.01	Payment of Notes	64
	Section 4.02	Maintenance of Office or Agency	64
	Section 4.03	Reports	65
	Section 4.04	Compliance Certificate	66
	Section 4.05	Taxes	66
	Section 4.06	Stay, Extension and Usury Laws	66
	Section 4.07	Restricted Payments	67


 




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	Section 4.08	Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries	71
	Section 4.09	Incurrence of Indebtedness and Issuance of Preferred Stock	73
	Section 4.10	Asset Sales	77
	Section 4.11	Transactions with Affiliates	79
	Section 4.12	Liens	82
	Section 4.13	Business Activities	82
	Section 4.14	Organizational Existence	82
	Section 4.15	Offer to Repurchase Upon Change of Control	82
	Section 4.16	Additional Note Guarantees	84
	Section 4.17	Designation of Restricted and Unrestricted Subsidiaries	84
	Section 4.18	Covenant Termination	85
	 	 	 
	Article V. SUCCESSORS	85
	 	 	 
	Section 5.01	Merger, Consolidation or Sale of Assets	85
	Section 5.02	Successor Issuer Substituted	87
	 	 	 
	Article VI. DEFAULTS AND REMEDIES	88
	 	 	 
	Section 6.01	Events of Default	88
	Section 6.02	Acceleration	90
	Section 6.03	Other Remedies	91
	Section 6.04	Waiver of Past Defaults	91
	Section 6.05	Control by Majority	91
	Section 6.06	Limitation on Suits	91
	Section 6.07	Rights of Holders of Notes to Receive Payment	92
	Section 6.08	Collection Suit by Trustee	92
	Section 6.09	Trustee May File Proofs of Claim	92
	Section 6.10	Priorities	93
	Section 6.11	Undertaking for Costs	93
	 	 	 
	Article VII. TRUSTEE	93
	 	 	 
	Section 7.01	Duties of Trustee	93
	Section 7.02	Rights of Trustee	94
	Section 7.03	Individual Rights of Trustee	95
	Section 7.04	Trustee’s Disclaimer	96
	Section 7.05	Notice of Defaults	96
	Section 7.06	Reports by Trustee to Holders of the Notes	96
	Section 7.07	Compensation and Indemnity	96
	Section 7.08	Replacement of Trustee	97
	Section 7.09	Successor Trustee by Merger, etc.	98
	Section 7.10	Eligibility; Disqualification	98
	Section 7.11	Preferential Collection of Claims Against Issuers	98
	Section 7.12	Trustee in Other Capacities	98


 




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	Article VIII. LEGAL DEFEASANCE AND COVENANT DEFEASANCE	99
	 	 	 
	Section 8.01	Option to Effect Legal Defeasance or Covenant Defeasance	99
	Section 8.02	Legal Defeasance and Discharge	99
	Section 8.03	Covenant Defeasance	100
	Section 8.04	Conditions to Legal or Covenant Defeasance	100
	Section 8.05	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions	101
	Section 8.06	Repayment to Issuers	102
	Section 8.07	Reinstatement	102
	 	 	 
	Article IX. AMENDMENT, SUPPLEMENT AND WAIVER	103
	 	 	
	Section 9.01	Without Consent of Holders of Notes	103
	Section 9.02	With Consent of Holders of Notes	104
	Section 9.03	[Reserved.]	106
	Section 9.04	Revocation and Effect of Consents	106
	Section 9.05	Notation on or Exchange of Notes	106
	Section 9.06	Trustee to Sign Amendments, etc.	106
	 	 	 
	Article X. NOTE GUARANTEES	106
	 	 	 
	Section 10.01	Guarantee	106
	Section 10.02	Limitation on Guarantor Liability	108
	Section 10.03	Execution and Delivery of Note Guarantee	108
	Section 10.04	Guarantors May Consolidate, etc., on Certain Terms	108
	Section 10.05	Releases	109
	 	 	 
	Article XI. SATISFACTION AND DISCHARGE	110
	 	 	 
	Section 11.01	Satisfaction and Discharge	110
	Section 11.02	Application of Trust Money	111
	 	 	 
	Article XII. MISCELLANEOUS	112
	 	 	 
	Section 12.01	[Reserved.]	112
	Section 12.02	Notices	112
	Section 12.03	[Reserved.]	113
	Section 12.04	Certificate and Opinion as to Conditions Precedent	113
	Section 12.05	Statements Required in Certificate or Opinion	113
	Section 12.06	Rules by Trustee and Agents	114
	Section 12.07	No Personal Liability of Directors, Officers, Employees and Unitholders	114
	Section 12.08	No Governing Law	114
	Section 12.09	No Adverse Interpretation of Other Agreements	114
	Section 12.10	No Successors	114
	Section 12.11	Severability	114
	Section 12.12	Counterpart Originals	115


 




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	Section 12.13	Table of Contents, Headings, etc.	115
	Section 12.14	Payment Date Other Than a Business Day	115
	Section 12.15	Evidence of Action by Holders	115
	 	 	 
	Article XIII. COLLATERAL AND SECURITY	115
	 	 	 
	Section 13.01	Security Interest	115
	Section 13.02	Post-Issue Date Collateral Requirements	116
	Section 13.03	Further Assurances; Liens on Additional Property	117
	Section 13.04	Intercreditor Agreement	118
	Section 13.05	Collateral Trust Agreement	119
	Section 13.06	Release of Liens in Respect of Notes	119
	Section 13.07	Collateral Trustee	120
	Section 13.08	Insurance	120


 


EXHIBITS


 


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


 




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This INDENTURE is dated as of February 10, 2016
(this “Indenture”) among Vanguard Natural Resources, LLC, a Delaware limited liability company (the “Company”),
VNR Finance Corp., a Delaware corporation (“Finance Corp.” and, together with the Company, the “Issuers”),
the Guarantors (as defined herein) and U.S. Bank National Association, a national banking association, as trustee (in such capacity,
the “Trustee”) and as collateral trustee (in such capacity, the “Collateral Trustee”).


 


The Issuers, the Guarantors, the Trustee and
the Collateral Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the Issuers’ 7.0% Senior Secured Second Lien Notes due 2023 (the “Notes”):


 


Article
I.

DEFINITIONS AND INCORPORATION

BY REFERENCE


 


Section
1.01         Definitions.


 


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


 


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


 


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


 


“Act of Parity Lien Debtholders”
means, as to any matter at any time, a direction in writing delivered to the Collateral Trustee by or with the written consent
of the holders of Parity Lien Debt representing the Required Parity Lien Debtholders.


 


“Additional Assets” means:


 


(1)         any
assets used or useful in the Oil and Gas Business, other than Indebtedness or Capital Stock;


 


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


 


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


 


provided, however, that any such
Restricted Subsidiary described in clause (2) or (3) is primarily engaged in the Oil and Gas Business.


 


“Additional Notes” means
additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09
hereof, as part of the same series as the Initial Notes.


 




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“Additional Secured
Debt Designation” means the written agreement of the Parity Lien Representative of holders of any Series of Parity Lien
Debt, as applicable, as set forth in the indenture, credit agreement or other agreement governing such Series of Parity Lien Debt,
for the benefit of (i) all holders of existing and future Priority Lien Debt, the Priority Lien Collateral Agent, each existing
and future holder of Priority Liens and (ii) if applicable, all holders of each existing and future Series of Parity Lien Debt,
the Collateral Trustee, and each existing and future holder of Parity Liens, in each case:


 


(a)          that
all Parity Lien Obligations will be and are secured equally and ratably by all Parity Liens at any time granted by the Issuers
or any Guarantor to secure any Obligations in respect of such Series of Parity Lien Debt, whether or not upon property otherwise
constituting collateral for such Series of Parity Lien Debt, and that all such Parity Liens will be enforceable by the Collateral
Trustee, for the benefit of all holders of Parity Lien Obligations equally and ratably;


 


(b)          that
such Parity Lien Representative and the holders of Obligations in respect of such Series of Parity Lien Debt are bound by the provisions
of the Intercreditor Agreement, including the provisions relating to the ranking of Priority Liens and Parity Liens and the order
of application of proceeds from the enforcement of Priority Liens and Parity Liens; and


 


(c)          appointing
the Collateral Trustee and consenting to the terms of the Intercreditor Agreement and the performance by the Collateral Trustee
of, and directing the Collateral Trustee to perform, its obligations under the Collateral Trust Agreement or applicable security
documents, as applicable, and the Intercreditor Agreement, together with all such powers as are reasonably incidental thereto.


 


“Adjusted Consolidated Net Tangible
Assets” means (without duplication), as of the date of determination,


 


(1)          the
sum of:


 


(a)          the
discounted future net revenues from Proved Reserves of the Company and its Restricted Subsidiaries calculated in accordance with
SEC guidelines before any state or federal income taxes, as estimated in a reserve report prepared as of the end of the Company’s
most recently completed fiscal year, which reserve report is prepared or audited by independent petroleum engineers, as increased
by, as of the date of determination, the estimated discounted future net revenues from:


 


(i)          estimated
Proved Reserves of the Company and its Restricted Subsidiaries acquired since the date of such year-end reserve report; and


 


(ii)         estimated
Proved Reserves of the Company and its Restricted Subsidiaries attributable to extensions, discoveries and other additions and
upward revisions of estimates of Proved Reserves (including previously estimated development costs incurred during the period and
the accretion of discount since the prior period end) since the date of such year-end reserve report due to exploration, development
or exploitation, production or other activities which would, in accordance with standard industry practice, cause such revisions,


 




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and decreased by, as of the date of determination,
the estimated discounted future net revenue attributable to:


 


(iii)        estimated
Proved Reserves of the Company and its Restricted Subsidiaries reflected in such reserve report produced or disposed of since the
date of such year-end reserve report; and


 


(iv)        reductions
in estimated Proved Reserves of the Company and its Restricted Subsidiaries reflected in such reserve report attributable to downward
revisions of estimates of Proved Reserves since such year-end due to changes in geological conditions or other factors which would,
in accordance with standard industry practice, cause such revisions, in each case calculated on a pre-tax basis;


 


in the case of the preceding clauses (i) through
(iv), calculated in accordance with SEC guidelines (utilizing the prices utilized in the Company’s year-end reserve report)
and estimated by the Company’s petroleum engineers or any independent petroleum engineers engaged by the Company for that
purpose;


 


(b)          the
capitalized costs that are attributable to oil and natural gas properties of the Company and its Restricted Subsidiaries to which
no proved oil and natural gas reserves are attributable, based on the Company’s books and records as of a date no earlier
than the last day of the Company’s most recent quarterly or annual period for which internal financial statements are available;


 


(c)          the
Consolidated Net Working Capital of the Company and its Restricted Subsidiaries as of a date no earlier than the last day of the
Company’s most recent quarterly or annual period for which internal financial statements are available; and


 


(d)          the
greater of:


 


(i)          the
net book value and


 


(ii)         the
appraised value, as estimated by independent appraisers, of other tangible assets (including Investments in unconsolidated Subsidiaries),


 


in each case, of the Company and its Restricted
Subsidiaries as of a date no earlier than the last day of the date of the Company’s most recent quarterly or annual period
for which internal financial statements are available; provided that if no such appraisal has been performed, the Company
shall not be required to obtain such an appraisal and only clause (d)(i) of this definition shall apply,


 


minus, to the extent not otherwise taken
into account in the immediately preceding clause (1),





 




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(2)          the
sum of



 


(a)          minority
interests;


 


(b)          any
net natural gas balancing liabilities of the Company and its Restricted Subsidiaries as of the last day of the Company’s
most recent annual or quarterly period for which internal financial statements are available;


 


(c)          to
the extent included in clause (1)(a) above, the discounted future net revenues, calculated in accordance with SEC guidelines (utilizing
the prices utilized in the Company’s year-end reserve report), attributable to reserves that are required to be delivered
to third parties to fully satisfy the obligations of the Company and its Restricted Subsidiaries with respect to Volumetric Production
Payments on the schedules specified with respect thereto; and


 


(d)          the
discounted future net revenues, calculated in accordance with SEC guidelines, attributable to reserves subject to Dollar-Denominated
Production Payments that, based on the estimates of production and price assumptions included in determining the discounted future
net revenues specified in (1)(a) above, would be necessary to fully satisfy the payment obligations of the Company and its Restricted
Subsidiaries with respect to Dollar-Denominated Production Payments on the schedules specified with respect thereto.


 


“Affiliate” of any specified
Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.


 


“Agent” means any Registrar
or Paying Agent.


 


“Applicable Premium” means,
with respect to any Note on any redemption date, the greater of:


 


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


 


(2)          the
excess of:


 


(a)          the
present value at such redemption date of (i) the redemption price of the Note at February 15, 2019 (such redemption price being
set forth in the table appearing in Section 3.07 hereof) plus (ii) all required interest payments due on the note through
February 15, 2019 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury
Rate as of such redemption date plus 50 basis points discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months), over


 


(b)          the
principal amount of the note.


 




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


 


“Asset Sale” means:


 


(1)         the
sale, lease, conveyance or other disposition of any assets or rights by the Company or any of the Company’s Restricted Subsidiaries;
provided that the sale, lease, conveyance or other disposition of all or substantially all of the properties or assets of
the Company and its Subsidiaries taken as a whole will be governed by Section 4.15 and/or by Section 5.01 and not
by the provisions of Section 4.10; and


 


(2)         the
issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or the sale by the Company or any of the Company’s
Restricted Subsidiaries of Equity Interests in any of the Company’s Subsidiaries (in either case other than directors’
qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary).


 


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


 


(1)         any
single transaction or series of related transactions that involves assets having a Fair Market Value of less than $10.0 million;


 


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


 


(3)         an
issuance or sale of Equity Interests by a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of
the Company;


 


(4)         the
sale, lease or other disposition of products, services or accounts receivable in the ordinary course of business and any sale or
other disposition of damaged, worn-out or obsolete assets in the ordinary course of business (including the abandonment or other
disposition of intellectual property that is, in the reasonable judgment of the Company, no longer economically practicable to
maintain or useful in the conduct of the business of the Company and its Restricted Subsidiaries taken as whole);


 


(5)         the
farm-out of undeveloped oil or natural gas properties owned or held by the Company or any of its Restricted Subsidiaries in the
ordinary course of business;


 


(6)         licenses
and sublicenses by the Company or any of its Restricted Subsidiaries of software or intellectual property in the ordinary course
of business;


 


(7)         any
surrender or waiver of contract rights or settlement, release, recovery on or surrender of contract, tort or other claims in the
ordinary course of business;


 


(8)         the
granting of Liens not prohibited by Section 4.12 and dispositions in connection with Permitted Liens;


 




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(9)         the
sale or other disposition of cash or Cash Equivalents or other financial instruments (other than Oil and Gas Hedging Contracts);


 


(10)       a
transfer of accounts receivable and related assets of the type specified in the definition of “Receivables Facility”
(or a fractional undivided interest therein or pursuant to any factoring or similar arrangement);


 


(11)       a
disposition of assets that constitutes (or results in by virtue of the consideration received for such disposition) either a Restricted
Payment that does not violate Section 4.07 or a Permitted Investment;


 


(12)       a
sale or other disposition of Hydrocarbons or other mineral products in the ordinary course of business;


 


(13)       an
Asset Swap;


 


(14)       dispositions
of crude oil and natural gas properties; provided that at the time of any such disposition such properties do not have associated
with them any Proved Reserves; and


 


(15)       any
Production Payments and Reserve Sales; provided that any such Production Payments and Reserve Sales, other than incentive
compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other
providers of technical services to the Company or a Restricted Subsidiary, shall have been created, incurred, issued, assumed or
Guaranteed in connection with the financing of, and within 60 days after the acquisition of, the property that is subject thereto.


 


“Asset Swap” means any substantially
contemporaneous (and in any event occurring within 90 days of each other) purchase and sale or exchange of any assets or properties
used or useful in the Oil and Gas Business between the Company or any of its Restricted Subsidiaries and another Person; provided
that the Fair Market Value of the properties or assets traded or exchanged by the Company or such Restricted Subsidiary (together
with any cash) is reasonably equivalent to the Fair Market Value of the properties or assets (together with any cash) to be received
by the Company or such Restricted Subsidiary, and provided further that any net cash received must be applied in accordance with
Section 4.10 if then in effect.


 


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


 


“Available Cash” has the
meaning assigned to such term in the Limited Liability Company Agreement, as in effect on the Issue Date.


 




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“Bank Product” means each
and any of the following bank services provided to the Issuers or any Guarantor by any holder of Priority Lien Debt or any Affiliate
thereof: (a) commercial credit cards, (b) stored value cards and (c) Treasury Management Arrangements (including controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate depository network services).


 


“Bank Product Obligations”
means any and all obligations of the Issuers or any Guarantor, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection
with any Bank Products.


 


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


 


“Beneficial Owner” has the
meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership
of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person”
will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion
or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time.
The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning. For
purposes of this definition, a Person shall be deemed not to Beneficially Own securities that are the subject of a stock purchase
agreement, merger agreement, amalgamation agreement, arrangement agreement or similar agreement until consummation of the transactions
or, as applicable, series of related transactions contemplated thereby.


 


“Board of Directors” means:


 


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


 


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


 


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


 


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


 


“Board Resolution” means
a copy of a resolution certified by the Secretary or an Assistant Secretary of the applicable 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.


 




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“Borrowing Base” means the
“Borrowing Base” as defined in and as determined from time to time pursuant to the Credit Agreement or Refinancing
Credit Facility, as applicable; provided that (i) the Borrowing Base under the Credit Agreement or such Refinancing Credit
Facility, as applicable, is determined in accordance with customary policies and procedures for extending credit under oil and
gas secured reserve based loan transactions and (ii) the majority of commitments to lend under the Credit Agreement or Refinancing
Credit Facility, as applicable, are made by commercial banks engaged in oil and gas reserve based lending in the ordinary course
of their respective businesses (it being understood that all lenders under the Credit Agreement as of the Issue Date constitute
commercial banks for purposes hereof).


 


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


 


“Capital Lease Obligation”
means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that
time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be
the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may
be prepaid by the lessee without payment of a penalty. Notwithstanding the foregoing, any lease (whether entered into before or
after the Issue Date) that would have been classified as an operating lease pursuant to GAAP as in effect on the Issue Date will
be deemed not to represent a Capital Lease Obligation.


 


“Capital Stock” means:


 


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


 


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


 


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


 


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


 


“Cash Equivalents” means:


 


(1)         United
States dollars;


 


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


 


(3)         marketable
general obligations issued by any state of the United States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition thereof,
having a credit rating of “A” or better from either S&P or Moody’s;


 




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(4)         certificates
of deposit, demand deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’
acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank
having capital and surplus in excess of $100.0 million or that is a lender under the Credit Agreement;


 


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


 


(6)         commercial
paper having one of the two highest ratings obtainable from Moody’s or S&P and, in each case, maturing within one year
after the date of acquisition;


 


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


 


(8)         with
respect to any Foreign Subsidiary of the Company, investments denominated in local currency that are similar to the items specified
in clauses (1) through (7) above.


 


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


 


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


 


(2)         the
adoption of a plan relating to the liquidation or dissolution of the Company;


 


(3)         the
consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person”
(as defined above) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Company, measured
by voting power rather than number of shares, units or the like; or


 


(4)         the
first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors.


 


Notwithstanding the preceding, a conversion
of the Company or any of its Restricted Subsidiaries from a limited partnership, corporation, limited liability company or other
form of entity to a limited liability company, corporation, limited partnership or other form of entity or an exchange of all of
the outstanding Equity Interests in one form of entity for Equity Interests in another form of entity shall not constitute a Change
of Control, so long as following such conversion or exchange the “persons” (as that term is used in Section 13(d)(3)
of the Exchange Act) who Beneficially Owned the Capital Stock of the Company immediately prior to such transactions continue to
Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or continue to Beneficially Own sufficient
Equity Interests in such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar
capacity for such entity or its general partner, as applicable, and, in either case no “person” Beneficially Owns more
than 50% of the Voting Stock of such entity or its general partner, as applicable.


 




    	9 



     


    

 


“Clearstream” means Clearstream
Banking, S.A.


 


“Code” means the U.S. Internal
Revenue Code of 1986 and any successor statute thereto, in each case as amended from time to time.


 


“Collateral” means all assets
and property, whether real, personal or mixed, wherever located and whether now owned or at any time acquired after the Issue Date
by the Issuers or any Guarantor as to which a Lien is granted under the Security Documents to secure the Parity Lien Obligations.


 


“Collateral Trustee” means
U.S. Bank National Association, a national banking association, until a successor replaces it in accordance with the terms of the
Collateral Trust Agreement and, thereafter, means the successor entity thereunder.


 


“Collateral Trust Agreement”
means the Collateral Trust Agreement, dated as of the Issue Date, among the Issuers, the Collateral Trustee and the Trustee, as
the Parity Lien Representative for the Notes, as it may be amended, restated, amended and restated, supplemented or otherwise modified
from time to time.


 


“Commission” or “SEC”
means the Securities and Exchange Commission.


 


“Company” means Vanguard
Natural Resources, LLC, and any and all successors thereto.


 


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


 


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


 


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


 


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


 


(4)         depreciation,
depletion, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period), impairment, non-cash equity based compensation expense and other non-cash charges and expenses (excluding any
such non-cash charge or expense to the extent that it represents an accrual of or reserve for cash charges or expenses in any future
period or amortization of a prepaid cash charge or expense that was paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such depreciation, depletion, amortization, impairment and other non-cash charges or expenses
were deducted in computing such Consolidated Net Income; plus


 




    	10 



     


    

 


(5)         if
such Person accounts for its oil and gas operations using successful efforts or a similar method of accounting, consolidated exploration
expense of such Person and its Restricted Subsidiaries; minus


 


(6)         non-cash
items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business;
and minus


 


(7)         to
the extent increasing such Consolidated Net Income for such period, the sum of (a) the amount of deferred revenues that are amortized
during such period and are attributable to reserves that are subject to Volumetric Production Payments and (b) amounts recorded
in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments,


 


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


 


“Consolidated Net Income”
means, with respect to any specified Person for any period, the aggregate of the net income (loss) of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis determined in accordance with GAAP and without any reduction in respect of
Preferred Stock dividends; provided that:


 


(1)         the
net income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting
will be included, but only to the extent of the amount of dividends or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;


 


(2)         the
net income of any Restricted Subsidiary of such Person will be excluded to the extent that the declaration or payment of dividends
or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted without
any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter
or any judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders,
partners or members;


 


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


 


(4)         any
gain (loss) realized upon the sale or other disposition of any property, plant or equipment of such Person or its consolidated
Restricted Subsidiaries (including pursuant to any sale or leaseback transaction) which is not sold or otherwise disposed of in
the ordinary course of business and any gain (loss) realized upon the sale or other disposition of any Capital Stock of any Person
will be excluded;


 




    	11 



     


    

 


(5)         to
the extent deducted in the calculation of Consolidated Net Income, any non-cash or other charges relating to any premium or penalty
paid, write off of deferred financing costs or other financial recapitalization charges in connection with redeeming or retiring
any Indebtedness prior to its Stated Maturity will be excluded;


 


(6)         any
“ceiling limitation” on Oil and Gas Properties or other asset impairment writedowns on Oil and Gas Properties under
GAAP or SEC guidelines will be excluded; and


 


(7)         any
unrealized non-cash gains or losses or charges in respect of Hedging Obligations (including those resulting from the application
of FASB ASC Topic No. 815, Derivatives and Hedging).


 


“Consolidated Net Working Capital”
means (a) all current assets of the Company and its Restricted Subsidiaries except current assets from Oil and Gas Hedging Contracts,
less (b) all current liabilities of the Company and its Restricted Subsidiaries, except (i) current liabilities included in Indebtedness,
(ii) current liabilities associated with asset retirement obligations relating to oil and natural gas properties and (iii) any
current liabilities from Oil and Gas Hedging Contracts, in each case as set forth in the consolidated financial statements of the
Company prepared in accordance with GAAP (excluding any adjustments made pursuant to FASB ASC 815).


 


“Consolidated Net Worth”
means, with respect to any specified Person as of any date, the sum of:


 


(1)         the
consolidated equity of the common stockholders of, or the consolidated capital of the unitholders of, such Person and its consolidated
Subsidiaries as of such date; plus


 


(2)         the
respective amounts reported on such Person’s balance sheet as of such date with respect to any series of Preferred Stock
(other than Disqualified Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared
and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received
by such Person upon issuance of such Preferred Stock.


 


“continuing” means, with
respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.


 


“Continuing Directors” means,
as of any date of determination, any member of the Board of Directors of the Company who:


 


(1)         was
a member of such Board of Directors on the Issue Date; or


 


(2)         was
nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or election.


 


“Corporate Trust Office of the Trustee”
will be at the address of the Trustee specified in Section 12.02 hereof (except with respect to payments on the Notes and
any exchange, transfer or surrender of the Notes, in which case this address will be c/o U.S. Bank National Association, 60 Livingston
Avenue, St. Paul, Minnesota 55107, Attention: Bond Drop Window, or, at 100 Wall Street, Suite 1600, New York, New York 10005) or
such other address as to which the Trustee may give notice to the Issuers.


 




    	12 



     


    

 


“Credit Agreement” means
that certain Third Amended and Restated Credit Agreement, dated as of September 30, 2011, by and among Vanguard Natural Gas, LLC,
as borrower, Citibank N.A., as administrative agent, and certain financial institutions, as lenders, providing for revolving credit
borrowings, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith,
and, in each case, as amended, restated, modified, renewed, refunded, replaced in any manner (whether upon or after termination
or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from
time to time.


 


“Credit Agreement Agent”
means, at any time, the Person serving at such time as the “Agent” or “Administrative Agent” under the
Credit Agreement or any other representative then most recently designated in accordance with the applicable provisions of the
Credit Agreement, together with its successors in such capacity.


 


“Credit Facilities” means
one or more debt facilities (including, without limitation, the Credit Agreement), indentures or commercial paper facilities, in
each case, with banks or other institutional lenders or institutional investors providing for revolving credit loans, term loans,
capital market financings, receivables financing (including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables), letters of credit or other borrowings, in each case, as
amended, restated, modified, renewed, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced
(including refinancing with any capital markets transaction or otherwise by means of sales of debt securities to institutional
investors) in whole or in part from time to time.


 


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


 


“Customary Recourse Exceptions”
means, with respect to any Non-Recourse Debt of an Unrestricted Subsidiary, exclusions from the exculpation provisions with respect
to such Non-Recourse Debt for the voluntary bankruptcy of such Unrestricted Subsidiary, fraud, misapplication of cash, environmental
claims, waste, willful destruction and other circumstances customarily excluded by lenders from exculpation provisions or included
in separate indemnification agreements in non-recourse financings.


 


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


 


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


 




    	13 



     


    

 


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


 


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


 


“Dollar-Denominated Production Payments”
means production payment obligations recorded as liabilities in accordance with GAAP, together with all undertakings and obligations
in connection therewith.


 


“Domestic Subsidiary” means
any Restricted Subsidiary of the Company that was formed under the laws of the United States or any state of the United States
or the District of Columbia.


 


“Enforcement Action” means,
with respect to any Priority Lien Debt or any Series of Parity Lien Debt, (a) the taking of any action to enforce any Lien in respect
of the Collateral, including the institution of any foreclosure proceedings, the noticing of any public or private sale or other
disposition under the Bankruptcy Code or any attempt to vacate or obtain relief from a stay or other injunction restricting any
other action described in this definition, (b) the exercise of any right or remedy provided to a secured creditor on account of
a Lien under the Priority Lien Documents or the Parity Lien Documents, as applicable (including, in either case, any delivery of
any notice to seek to obtain payment directly from any account debtor of the Issuers or any Guarantor or the taking of any action
or the exercise of any right or remedy in respect of the setoff or recoupment against, collection or foreclosure on or marshalling
of the Collateral or proceeds of Collateral), under applicable law, at equity, in an Insolvency or Liquidation Proceeding or otherwise,
including the acceptance of Collateral in full or partial satisfaction of a Lien, (c) the sale, assignment, transfer, lease, license,
or other disposition as a secured creditor on account of a Lien of all or any portion of the Collateral, by private or public sale
(judicial or non-judicial) or any other means, (d) the solicitation of bids from third parties to conduct the liquidation of all
or a portion of Collateral as a secured creditor on account of a Lien, (e) the exercise of any other enforcement right relating
to the Collateral (including the exercise of any voting rights relating to any capital stock composing a portion of the Collateral)
whether under the Priority Lien Documents or the Parity Lien Documents, as applicable, under applicable law of any jurisdiction,
in equity, in an Insolvency or Liquidation Proceeding, or otherwise, or (f) the appointment of a receiver, manager or interim receiver
of all or any portion of the Collateral or the commencement of, or the joinder with any creditor in commencing, any Insolvency
or Liquidation Proceeding against the Issuers or any Guarantor or any assets of the Issuers or any Guarantor.


 




    	14 



     


    

 


“Equity Interests” of any
Person means (1) any and all Capital Stock of 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 Capital Stock of 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.


 


“Equity Offering” means a
sale of Equity Interests of the Company (other than Disqualified Stock and other than to a Subsidiary of the Company) made for
cash on a primary basis by the Company after the Issue Date.


 


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


 


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


 


“Excluded Assets” means,
together with certain other excluded assets as set forth in the Security Documents:


 


(1)         any
oil and gas lease for which there are no associated Proved Reserves;


 


(2)         any
lease (other than an oil and gas lease), license, contract or agreement to which the Issuers or any Guarantor is a party or any
of its rights or interests thereunder if and only for so long as the grant of a Lien under the security documents will constitute
or result in a termination under, or a default or breach thereof that would give the other party thereto the right to terminate,
any such lease, license, contract or agreement (other than (a) to the extent that any such term would be rendered ineffective pursuant
to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code of any relevant jurisdiction or any other applicable law
or principles of equity, or (b) to the extent the applicable party has consented to the grant of a Lien on such lease, license,
contract or agreement); provided that such lease, license, contract or agreement will cease to be an Excluded Asset immediately
and automatically, at such time as such consequences will no longer result;


 


(3)         any
assets held by any Unrestricted Subsidiaries;


 


(4)         assets
securing purchase money obligations or Capital Lease Obligations permitted to be incurred under this Indenture, solely to the extent
the documentation relating thereto prohibits such assets from being Collateral and no Lien on those assets secures any other Indebtedness
of the Company or any Restricted Subsidiaries of the Company other than such purchase money obligations or Capital Lease Obligations;


 




    	15 



     


    

 


(5)         any
trucks, service vehicles, automobiles, rolling stock or other registered mobile equipment or equipment covered by certificates
of title or ownership of the Company or any Restricted Subsidiary of the Company;


 


(6)         deposit
accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments; provided that in no event
shall any of the principal operating or collection accounts (including any accounts into which any purchaser remits the proceeds
for the sale of Hydrocarbons) of the Company constitute “Excluded Assets” hereunder;


 


(7)         any
Equity Interests of a Foreign Subsidiary, or any Domestic Subsidiary, that has no material assets other than the Equity Interests
of one or more Foreign Subsidiaries (such Domestic Subsidiary being a “FSHCO”) in excess of 65% of the voting rights
of all outstanding Equity Interests of such Foreign Subsidiary or FSHCO and any Equity Interests issued by any Foreign Subsidiaries
or any FSHCO other than Foreign Subsidiaries and FSHCOs directly owned by an Issuer or any Guarantor;


 


(8)         cash
or securities of the Issuers or any Guarantor pledged to secure performance of tenders, surety or appeal bonds, government contracts,
performance or return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations
of a like nature incurred in the ordinary course of business;


 


(9)         any
intent-to-use trademark or service mark application to the extent, if any, that, and solely during the period, if any, in which,
the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark or service
mark application under applicable federal law; and


 


(10)        receivables
of the Issuers or any Guarantor that are transferred or in respect of which security interests are granted under a Receivables
Facility.


 


“Existing Indebtedness” means
all Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Credit Agreement) in existence on the Issue
Date, until such amounts are repaid.


 


“Existing Unsecured Notes”
means the Issuers’ 7.875% Senior Notes due 2020 that are outstanding on the Issue Date, as may be amended, modified, refinanced,
renewed or replaced.


 


“Fair Market Value” means
the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by the Board of Directors of the Company in the case of amounts of $25.0 million or more
and otherwise by an officer of the Company (unless otherwise provided in this Indenture).


 


“Finance Corp.” means
VNR Finance Corp., and any and all successors thereto.


 




    	16 



     


    

 


“Fixed Charge Coverage Ratio”
means with respect to any specified Person for any four-quarter reference period, the ratio of the Consolidated Cash Flow of such
Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its
Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness
(other than ordinary working capital borrowings) or issues, repurchases or redeems Preferred Stock subsequent to the commencement
of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption,
defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Preferred Stock, and the use of the
proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated
as if the average rate in effect from the beginning of such period to the Calculation Date had been the applicable rate for the
entire period (taking into account any interest Hedging Obligation applicable to such Indebtedness, but if the remaining term of
such interest Hedging Obligation is less than twelve months, then such interest Hedging Obligation shall only be taken into account
for that portion of the period equal to the remaining term thereof). If any Indebtedness that is being given pro forma effect bears
an interest rate at the option of such Person, the interest rate shall be calculated by applying such option rate chosen by such
Person. Interest on Indebtedness that 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 rate, shall be deemed to have been based upon the rate actually chosen, or
if none, then based upon such optional rate chosen as such Person may designate.


 


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


 


(1)         acquisitions
that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers, consolidations or
otherwise (including acquisitions of assets used or useful in the Oil and Gas Business), or any Person or any of its Restricted
Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including all related financing transactions
and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date, or that are to be made on the Calculation Date, will be given pro forma
effect as if they had occurred on the first day of the four-quarter reference period, and the Consolidated Cash Flow for such reference
period will be calculated giving pro forma effect to any expense and cost reductions or synergies that have occurred or are reasonably
expected to occur, in the reasonable judgment the Company’s principal financial or accounting officer (regardless of whether
those cost savings or operating improvements could then be reflected in pro forma financial statements in accordance with Regulation
S-X promulgated under the Securities Act or any other regulation or policy of the Commission related thereto);


 


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


 


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


 




    	17 



     


    

 


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


 


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


 


(6)         interest
income reasonably anticipated by such Person to be received during the applicable four-quarter period from cash or Cash Equivalents
held by such Person or any Restricted Subsidiary of such Person, which cash or Cash Equivalents exist on the Calculation Date or
will exist as a result of the transaction giving rise to the need to calculate the Fixed Charge Coverage Ratio, will be included.


 


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


 


(1)         the
consolidated interest expense (less interest income) of such Person and its Restricted Subsidiaries for such period, whether paid
or accrued (excluding (i) any interest attributable to Dollar-Denominated Production Payments; (ii) write-off of deferred financing
costs; (iii) commissions, discounts, yield and other fees and charges (including interest) incurred in connection with any Receivables
Facility or any other transaction pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer
or grant a security interest in any accounts receivable or related assets of the type specified in the definition of “Receivables
Facility”; and (iv) accretion of interest charges on future plugging and abandonment obligations, future retirement benefits
and other obligations that do not constitute Indebtedness, but including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers’ acceptance financings), and net of the effect of all payments made or received pursuant to Hedging
Obligations in respect of interest rates; plus


 


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


 


(3)         any
interest on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by
a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus


 


(4)         all
dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock of such Person or any series
of Preferred Stock of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests
of such Person (other than Disqualified Stock) or to such Person or a Restricted Subsidiary of such Person,


 




    	18 



     


    

 


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


 


“Foreign Subsidiary” means
any Restricted Subsidiary of the Company that is not a Domestic Subsidiary.


 


“GAAP” means generally accepted
accounting principles in the United States, which are in effect from time to time.


 


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


 


“Global Notes” means each
of the Global Notes deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in
the form of Exhibit A hereto, and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests
in the Global Note” attached thereto, issued in accordance with Sections 2.01, 2.06(b), 2.06(c), 2.06(d)
or 2.06(e) hereof.


 


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


 


“Grantors” means the Issuers,
the Guarantors and any other person (if any) that provides collateral security for any Secured Debt Obligations.


 


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


 


“Guarantors” means any Subsidiary
of the Company that Guarantees the Notes in accordance with the provisions of this Indenture, and their respective successors and
assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.


 


“Hedging Obligations” means,
with respect to any specified Person, the obligations of such Person under any (a) Interest Rate Agreement and (b) Oil and Gas
Hedging Contract.


 


“Holder” means a Person in
whose name a Note is registered.


 


“Hydrocarbon Interests” means
all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases,
or other liquid or gaseous Hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests
and production payment interests, including any reserved or residual interests of whatever nature.


 




    	19 



     


    

 


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


 


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


 


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


 


(1)         in
respect of borrowed money;


 


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


 


(3)         in
respect of bankers’ acceptances;


 


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


 


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


 


(6)         representing
any Hedging Obligations,


 


if and to the extent any of the preceding items
(other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness
of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person
(including, with respect to any Production Payment, any warranties or guarantees of production or payment by such Person with respect
to such Production Payment, but excluding other contractual obligations of such Person with respect to such Production Payment).
Subject to the preceding sentence, neither Dollar-Denominated Production Payments nor Volumetric Production Payments shall be deemed
to be Indebtedness.


 


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


 


(1)         such
Indebtedness is the obligation of a Joint Venture;


 


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


 




    	20 



     


    

 


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


 


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


 


(b)          if
less than the amount determined pursuant to clause (a) immediately above, the actual amount of such Indebtedness that is recourse
to such Person or a Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a writing and is for a determinable
amount and the related interest expense shall be included in Fixed Charges to the extent actually paid by such Person or its Restricted
Subsidiaries.


 


“Indenture” has the meaning
attributed thereto in the first paragraph of this instrument, as amended or supplemented from time to time.


 


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


 


“Initial Notes” means the
first $75,634,000 aggregate principal amount of Notes issued under this Indenture on the Issue Date.


 


“Insolvency or Liquidation Proceeding”
means:


 


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


 


(b)          any
liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to an Issuer or any Guarantor,
in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or


 


(c)          any
other proceeding of any type or nature in which substantially all claims of creditors of an Issuer or any Guarantor are determined
and any payment or distribution is or may be made on account of such claims.


 


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


 


“Intercreditor Agreement”
means the Intercreditor Agreement among the Collateral Trustee, the Priority Lien Collateral Agent, the Issuers, the Guarantors
and the other parties from time to time party thereto, to be entered into on the Issue Date, as it may be amended, restated, supplemented
or otherwise modified from time to time in accordance with this Indenture.


 




    	21 



     


    

 


“Interest Rate Agreement”
means any interest rate swap agreement (whether from fixed to floating or from floating to fixed), interest rate cap agreement,
interest rate collar agreement or other similar agreement or arrangement designed to protect the Company or any of its Restricted
Subsidiaries against fluctuations in interest rates and is not for speculative purposes.


 


“Investments” means, with
respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of
loans (including Guarantees or other obligations), advances or capital contributions (excluding (1) commission, travel and similar
advances to officers and employees made in the ordinary course of business and (2) advances to customers in the ordinary course
of business that are recorded as accounts receivable on the balance sheet of the lender), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities (excluding any interest in an oil or natural gas leasehold to the extent
constituting a security under applicable law), together with all items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company will be deemed to have made an
Investment on the date of any such sale or disposition equal to the Fair Market Value of the Company’s Investments in such
Subsidiary that were not sold or disposed of in an amount determined as provided in the final paragraph of Section 4.07.
The acquisition by the Company or any Restricted Subsidiary of the Company of a Person that holds an Investment in a third Person
will be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person in an amount equal to the
Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the
final paragraph of Section 4.07. Except as otherwise provided in this Indenture, the amount of an Investment will be determined
at the time the Investment is made and without giving effect to subsequent changes in value or write-ups, write-downs or write-offs
with respect to such Investment.


 


“Issue Date” means February
10, 2016.


 


“Joint Venture” means a partnership
or joint venture that is not a Restricted Subsidiary.


 


“Lien” means, with respect
to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement,
any lease in the nature thereof, any option or other agreement to sell or give a security interest in and, except in connection
with any Receivables Facility, any filing of or agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction or Production Payments and Reserve Sales and the like payable out of Oil and Gas Properties
other than a precautionary financing statement respecting a lease not intended as a security agreement.


 


“Limited Liability Company Agreement”
means that certain Fifth Amended and Restated Limited Liability Company Agreement of the Company, dated as of September 15, 2014,
as in effect on the Issue Date.


 




    	22 



     


    

 


“Modified ACNTA” means, as
of any date of determination, an amount equal to the Company’s Adjusted Consolidated Net Tangible Assets calculated as of
a date not more than 30 days prior to the date of determination (the “calculation date”), on the following basis:


 


(a)          in
lieu of commodity pricing of future net revenues based on SEC guidelines, Modified ACNTA Prices shall be used after giving effect
to all commodity derivatives contracts in effect as of the date of determination as determined in good faith by the Company,


 


(b)          such
calculation shall be based on then current estimates of costs determined in good faith by the Company in light of prevailing market
conditions,


 


(c)          any
assets or liabilities relevant to such calculation of Restricted Subsidiaries that are not Guarantors shall be disregarded in such
calculation, and


 


(d)          Consolidated
Net Working Capital will be calculated without including net cash proceeds of the Notes.


 


“Modified ACNTA Prices” means,
as of any date of determination, the forward month prices for the most comparable hydrocarbon commodity applicable to such future
production month for a five year period (or such shorter period if forward month prices are not quoted for a reasonably comparable
hydrocarbon commodity for the full five year period), with such prices held constant thereafter based on the last quoted forward
month price of such period, as such prices are (i) quoted on the NYMEX (or its successor) as of the calculation date (as defined
in the definition of Modified ACNTA) and (ii) adjusted for energy content, quality and basis differentials; provided that
with respect to estimated future production for which prices are defined, within the meaning of SEC guidelines, by contractual
arrangements excluding escalations based upon future conditions, then such contract prices shall be applied to future production
subject to such arrangements.


 


“Moody’s” means Moody’s
Investors Service, Inc., and any successor to the ratings business thereof.


 


“Mortgages” means all mortgages,
deeds of trust and similar documents, instruments and agreements (and all amendments, modifications and supplements thereof) creating,
evidencing, perfecting or otherwise establishing the Liens on Oil and Gas Properties and other related assets to secure payment
of the Notes and the Note Guarantees or any part thereof.


 


“Net Proceeds” means the
aggregate cash proceeds and Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration
received in any Asset Sale but excluding any non-cash consideration deemed to be cash for purposes of Section 4.10), net
of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees,
and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of
the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements,
and amounts required to be applied to the repayment of Indebtedness, other than revolving credit Indebtedness under a Credit Facility,
secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment or indemnification
obligations in respect of the sale price of such asset or assets established in accordance with GAAP.


 




    	23 



     


    

 


“Non-Recourse Debt” means
Indebtedness:


 


(1)         as
to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable as a guarantor or otherwise,
except for Customary Recourse Exceptions; and


 


(2)         as
to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of the Company
or any of its Restricted Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary), except for Customary Recourse
Exceptions.


 


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


 


“Note Documents” means this
Indenture, the Notes, the Note Guarantees, the Collateral Trust Agreement, the Security Documents and the Intercreditor Agreement.


 


“Note Guarantee” means the
Guarantee by each Guarantor of the Issuers’ obligations under this Indenture and the Notes, as provided in Article X
hereof.


 


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


 


“Obligations” means any principal
(including reimbursement obligations and obligations to provide cash collateral with respect to letters of credit whether or not
drawn), interest (including, to the extent legally permitted, all interest accrued thereof after the commencement of any Insolvency
or Liquidation Proceeding at the rate, including any applicable post-default rate even if such interest is not enforceable, allowable
or allowed as a claim in such proceeding), premium (if any), penalties, fees, charges, expenses, indemnifications, reimbursements,
damages, guarantees and other liabilities or amounts payable under the documentation governing any Indebtedness or in respect thereto.


 


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


 


“Officers’ Certificate”
means a certificate signed on behalf of each of the Company and Finance Corp., in the case of the Company by two of its Officers
and in the case of Finance Corp. by two of its Officers, one of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the Company or Finance Corp, as the case may be, that meets the requirements
of Section 12.05 hereof.


 




    	24 



     


    

 


“Oil and Gas Business” means
(i) the acquisition, exploration, development, production, operation and disposition of interests in oil, gas and other Hydrocarbon
properties, (ii) the gathering, marketing, treating, processing (but not refining), storage, selling and transporting of any production
from such interests or properties, (iii) any business relating to exploration for or development, production, treatment, processing
(but not refining), storage, transportation or marketing of oil, gas and other minerals and products produced in association therewith
and (iv) any activity that is, in the Company’s reasonable judgment, ancillary, complementary or incidental to or necessary
or appropriate for the activities described in clauses (i) through (iii) of this definition.


 


“Oil and Gas Hedging Contracts”
means any puts, cap transactions, floor transactions, collar transactions, forward contract, commodity swap agreement, commodity
option agreement or other similar agreement or arrangement in respect of Hydrocarbons to be used, produced, processed or sold by
the Company or any of its Restricted Subsidiary that are customary in the Oil and Gas Business and designed to protect such Person
against fluctuation in Hydrocarbons prices and not for speculative purposes.


 


“Oil and Gas Properties”
means (a) Hydrocarbon Interests, (b) the properties now or hereafter pooled or unitized with Hydrocarbon Interests, (c) all presently
existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including all
units created under orders, regulations and rules of any governmental authority) which may affect all or any portion of the Hydrocarbon
Interests, (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements,
which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from
or attributable to such Hydrocarbon Interests, (e) all Hydrocarbons in and under and which may be produced and saved or attributable
to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests, (f) all tenements, hereditaments, appurtenances and properties in any
manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (g) all properties, rights, titles, interests
and estates described or referred to above, including any and all property, real or personal, now owned or hereafter acquired and
situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon
Interests or property (excluding drilling rigs, automotive equipment, rental equipment or other personal property which may be
on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas
wells, injection wells or other wells, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping
units, field gathering systems, gas processing plants and pipeline systems and any related infrastructure to any thereof, tanks
and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances,
tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together
with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.


 


“Opinion of Counsel” means
an opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements of Section 12.05 hereof.
Such counsel may be an employee of or counsel to the Company, any Subsidiary of the Company, or the Trustee.


 




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“Parity Lien” means a Lien
granted by an Issuer or any Guarantor in favor of the Collateral Trustee pursuant to a Security Document, at any time, upon any
property of any Issuer or any Guarantor to secure Parity Lien Obligations.


 


“Parity Lien Debt” means:


 


(a)         the
Notes issued on the Issue Date and Note Guarantees thereof; and


 


(b)         any
other Indebtedness (other than intercompany Indebtedness owing to the Company or its Subsidiaries) of the Issuers or any Guarantor
(including Additional Notes and Note Guarantees thereof and replacements of Parity Lien Debt with other Parity Lien Debt to the
extent contemplated and permitted by the Intercreditor Agreement) that is secured equally and ratably with the Notes by a Parity
Lien that was permitted to be incurred under clause (1), (3) or (5) (insofar as such Indebtedness permitted to be incurred under
clause (5) refunds, refinances, extends, replaces, renews or defeases Indebtedness incurred under clause (1) or (3) of the definition
of “Permitted Debt”) of the definition of “Permitted Debt” and also permitted to be incurred and so secured
under each applicable Secured Debt Document; provided that, in the case of any Indebtedness referred to in clause (b) of
this definition (except that clauses (i)-(iv) below do not apply with respect to Additional Notes issued under this Indenture):


 


(i)           on
or before the date on which such Indebtedness is incurred by the Issuers or any Guarantor, such Indebtedness is designated by the
Issuers, in an Officers’ Certificate delivered to each Parity Lien Representative and the Collateral Trustee, as “Parity
Lien Debt,” and such Officers’ Certificate also certifies that such Indebtedness is permitted and with respect to any
other requirements set forth in the Intercreditor Agreement;


 


(ii)          a
Parity Lien Representative is designated with respect to such Indebtedness and executes and delivers (A) an Additional Secured
Debt Designation on behalf of itself and all holders of such Indebtedness; (B) a joinder to the Collateral Trust Agreement on behalf
of itself and all holders of such Indebtedness and does not have any senior or junior rights with respect to the application of
proceeds from Collateral other than as provided in the Collateral Trust Agreement and (C) other than in the case of any Additional
Notes, the Parity Lien Representative of such Parity Lien Debt shall have executed a joinder to the Intercreditor Agreement in
the form provided therein;


 


(iii)         all
relevant filings and recordations necessary to ensure that such Indebtedness is secured by the Collateral in accordance with the
applicable Security Documents are authorized, executed (if applicable) and recorded in each appropriate jurisdiction (provided
that this clause (iii) may be satisfied on a post-closing basis if permitted by the Parity Lien Representative); and


 


(iv)         all
requirements set forth in the Collateral Trust Agreement and the other Parity Lien Documents as to the confirmation, grant or perfection
of the Collateral Trustee’s Liens to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction
of such requirements and the other provisions of this clause (iv) will be conclusively established if the Company delivers to the
Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that
such Indebtedness is permitted to be incurred by each Parity Lien Document and secured with a Lien equally and ratably with all
previously existing and future “Parity Lien Debt”).


 




    	26 



     


    

 


“Parity Lien Documents” means,
collectively, the Note Documents and any additional indenture, supplemental indenture, credit agreement or other agreement governing
each other Series of Parity Lien Debt and the Security Documents (other than any Security Documents that do not secure Parity Lien
Obligations).


 


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


 


“Parity Lien Purchaser Representative”
means (a) initially, the Trustee or (b) such other Person that is appointed from time to time by the Parity Lien Representatives
to replace the Trustee (or subsequent Parity Lien Purchaser Representative) pursuant to a written notice to the Priority Lien Collateral
Agent.


 


“Parity Lien Representative”
means:


 


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


 


(b)         in
the case of any other Series of Parity Lien Debt, the trustee, agent or representative of the holders of such Series of Parity
Lien Debt who (a) is appointed as a Parity Lien Representative (for purposes related to the administration of the Security Documents)
pursuant to the indenture, credit agreement or other agreement governing such Series of Parity Lien Debt, together with its successors
in such capacity, and (b) has become a party to the Collateral Trust Agreement as a “Parity Lien Representative” by
executing the Collateral Trust Agreement on the Issue Date or, at any time after the Issue Date, a joinder in the form required
under the Collateral Trust Agreement.


 


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


 


“Permitted Acquisition Indebtedness”
means Indebtedness or Disqualified Stock of the Company or any of its Restricted Subsidiaries to the extent such Indebtedness or
Disqualified Stock was Indebtedness or Disqualified Stock of any other Person existing at the time (a) such Person became a Restricted
Subsidiary of the Company or (b) such Person was merged or consolidated with or into the Company or any of its Restricted Subsidiaries;
provided that on the date such Person became a Restricted Subsidiary or the date such Person was merged or consolidated
with or into the Company or any of its Restricted Subsidiaries, as applicable, any of:


 


(1)         immediately
after giving effect to such transaction and any related financing transaction on a pro forma basis as if the same had occurred
at the beginning of the applicable four-quarter period, the Company or such Person (if the Company is not the survivor in the transaction)
would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.09(a) hereof;


 




    	27 



     


    

 


(2)         immediately
after giving effect to such transaction and any related financing transaction on a pro forma basis as if the same had occurred
at the beginning of the applicable four-quarter period, the Fixed Charge Coverage Ratio of the Company or such Person (if the Company
is not the survivor in the transaction) is equal to or greater than the Fixed Charge Coverage Ratio of the Company immediately
prior to such transaction; or


 


(3)         immediately
after giving effect to such transaction on a pro forma basis, the Consolidated Net Worth of the Company would be greater than the
Consolidated Net Worth of the Company immediately prior to such transaction.


 


“Permitted Business Investments”
means Investments made in the ordinary course of, and of a nature that is or shall have become customary in, the Oil and Gas Business
as a means of actively exploiting, exploring for, acquiring, developing, processing, gathering, marketing or transporting oil and
natural gas through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory
requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of Oil and Gas Business
jointly with third parties, consisting of the following or other similar investments and/or expenditures, (i) ownership interests
in oil, natural gas, other Hydrocarbon properties or any interest therein or gathering, transportation, processing, storage or
related systems, (ii) Investments in the form of or pursuant to operating agreements, processing agreements, farm-in agreements,
farm-out agreements, developments agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint
bidding agreements, service contracts, subscription agreements, stock purchase agreements and other similar agreements with third
parties, excluding, however, Investments in any corporation, partnership or limited liability company, and (iii) direct or indirect
ownership interests in drilling rigs, fracturing units and other related equipment.


 


“Permitted Collateral Liens”
means Liens in clauses (3), (4), (5), (6) (except to the extent such Liens apply to any Oil and Gas Property), (7), (10), (13),
(15), (16), (21) and (25) (in respect of the refinancing of any other Permitted Collateral Lien) of the definition of “Permitted
Liens” that, by operation of law, have priority over the Parity Liens.


 


“Permitted Investments” means:


 


(1)         any
Investment in the Company (including, without limitation, through the purchase of any Notes) or in a Restricted Subsidiary of the
Company;


 


(2)         any
Investment in Cash Equivalents;


 


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


 


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


 




    	28 



     


    

 


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


 


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


 


(5)         any
acquisition of assets or Capital Stock solely in exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company;


 


(6)         any
Investments received in compromise or resolution of (a) obligations of trade creditors or customers that were incurred in the ordinary
course of business of the Company or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (b) litigation, arbitration or other disputes;


 


(7)         Investments
represented by Hedging Obligations;


 


(8)         Investments
in any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease,
utility and workers’ compensation, performance and other deposits made in the ordinary course of business by the Company
or any of its Restricted Subsidiaries;


 


(9)         loans
or advances to officers, directors or employees made in the ordinary course of business of the Company or any Restricted Subsidiary
of the Company;


 


(10)       repurchases
of the Notes;


 


(11)       any
Guarantee of Indebtedness permitted to be incurred by Section 4.09 hereof other than a Guarantee of Indebtedness of an Affiliate
of the Company that is not a Restricted Subsidiary of the Company;


 


(12)       any
Investment existing on, or made pursuant to binding commitments existing on, the Issue Date and any Investment consisting of an
extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the Issue
Date; provided that the amount of any such Investment may be increased (a) as required by the terms of such Investment as
in existence on the Issue Date or (b) as otherwise permitted under this Indenture;


 


(13)       Investments
acquired after the Issue Date as a result of the acquisition by the Company or any Restricted Subsidiary of the Company of another
Person, including by way of a merger, amalgamation or consolidation with or into the Company or any Restricted Subsidiary of the
Company in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments
were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of
such acquisition, merger, amalgamation or consolidation;


 




    	29 



     


    

 


(14)       Permitted
Business Investments;


 


(15)       Investments
received as a result of a foreclosure by, or other transfer of title to, the Company or any of its Restricted Subsidiaries with
respect to any secured Investment in default;


 


(16)       the
acquisition by a Receivables Subsidiary in connection with a Receivables Facility of Equity Interests of a trust or other Person
established by such Receivables Subsidiary to effect such Receivables Facility; and any other Investment by the Company or a Subsidiary
of the Company in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with
a Receivables Facility, provided, that such other Investment is in the form of a note or other instrument that the Receivables
Subsidiary or other Person is required to repay as soon as practicable from available cash collections less amounts required to
be established as reserves pursuant to contractual agreements with entities that are not Affiliates of the Company entered into
as part of a Receivables Facility; and


 


(17)       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 (17)
that are at the time outstanding that do not exceed the greater of (a) $50.0 million and (b) 5.0% of Modified ACNTA; provided,
however, that if any Investment pursuant to this clause (17) is made in any Person that is not a Restricted Subsidiary of
the Company at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Company after such
date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made
pursuant to this clause (17) for so long as such Person continues to be a Restricted Subsidiary of the Company.


 


“Permitted Liens” means:


 


(1)         Liens
securing Priority Lien Obligations and Parity Lien Obligations;


 


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


 


(3)         Liens
on property of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company or is merged with or into
or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such Person becoming a Restricted Subsidiary of the Company or such merger or consolidation and do
not extend to any assets other than those of the Person that becomes a Restricted Subsidiary of the Company or is merged with or
into or consolidated with the Company or any Restricted Subsidiary of the Company;


 


(4)         Liens
on property (including Capital Stock) existing at the time of acquisition of the property by the Company or any Subsidiary of the
Company; provided that such Liens were in existence prior to such acquisition, and not incurred in contemplation of, such
acquisition;


 


(5)         Liens
to secure the performance of statutory obligations, insurance, surety or appeal bonds, workers’ compensation obligations,
bid, plugging and abandonment and performance bonds or other obligations of a like nature incurred in the ordinary course of business
(including Liens to secure letters of credit issued to assure payment of such obligations);


 




    	30 



     


    

 


(6)         Liens
on any asset or property acquired, constructed or improved by the Company or any of its Restricted Subsidiaries; provided
that (a) such Liens are in favor of the seller of such asset or property, in favor of the Person or Persons developing, constructing,
repairing or improving such asset or property, or in favor of the Person or Persons that provided the funding for the acquisition,
development, construction, repair or improvement cost, as the case may be, of such asset or property, (b) such Liens are created
within 360 days after the acquisition, development, construction, repair or improvement, (c) the aggregate principal amount of
the Indebtedness secured by such Liens is otherwise permitted to be incurred under this Indenture and does not exceed the greater
of (i) the cost of the asset or property so acquired, constructed or improved plus related financing costs and (ii) the fair market
value of the asset or property so acquired, constructed or improved, measured at the date of such acquisition, or the date of completion
of such construction or improvement, and (d) such Liens are limited to the asset or property so acquired, constructed or improved
(including the proceeds thereof, accessions thereto, upgrades thereof and improvements thereto);


 


(7)         Liens
existing on the Issue Date (other than Priority Liens);


 


(8)         [Reserved];


 


(9)         Liens
on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by the Company or any Restricted
Subsidiary of the Company to the extent securing Non-Recourse Debt or other Indebtedness of such Unrestricted Subsidiary or Joint
Venture;


 


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


 


(11)        Liens
reserved in oil and natural gas mineral leases for bonus or rental payments and for compliance with the terms of such leases;


 


(12)        Liens
to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Indenture; provided, however,
that


 


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


 


(b)          the
Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount,
or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such
Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such
renewal, refunding, refinancing, replacement, defeasance or discharge;


 




    	31 



     


    

 


(13)       Liens
on insurance policies and proceeds thereof, or other deposits, to secure insurance premium financings;


 


(14)       filing
of Uniform Commercial Code financing statements as a precautionary measure in connection with operating leases;


 


(15)       bankers’
Liens, rights of setoff, Liens arising out of judgments or awards not constituting an Event of Default and notices of lis pendens
and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves
have been made;


 


(16)       Liens
on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness;


 


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


 


(18)       grants
of software and other technology licenses in the ordinary course of business;


 


(19)       Liens
arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the
ordinary course of business;


 


(20)       Liens
in respect of Production Payments and Reserve Sales; provided that such Liens are limited to the property that is subject
to such Production Payments and Reserve Sales;


 


(21)       Liens
arising under oil and natural gas leases or subleases, assignments, farm-out agreements, farm-in agreements, division orders, contracts
for the sale, purchase, exchange, transportation, gathering or processing of Hydrocarbons, unitizations and pooling designations,
declarations, orders and agreements, development agreements, joint venture agreements, partnership agreements, operating agreements,
royalties, working interests, net profits interests, joint interest billing arrangements, participation agreements, production
sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, licenses, sublicenses
and other agreements which are customary in the Oil and Gas Business; provided, however, in all instances that such
Liens are limited to the assets that are the subject of the relevant agreement, program, order or contract;


 


(22)       Liens
to secure performance of Hedging Obligations and in respect of Bank Product Obligations of the Company or any of its Restricted
Subsidiaries, in each case entered into in the ordinary course of business and not for speculative purposes;


 


(23)       Liens
incurred in the ordinary course of business of the Company or any Guarantor with respect to Obligations not to exceed in
aggregate principal amount the greater of (i) $25.0 million and (ii) 1.0% of the Company’s Modified ACNTA at any one
time outstanding;


 




    	32 



     


    

 


(24)       Liens
on accounts receivable and related assets incurred in connection with a Receivables Facility; and


 


(25)       any
Lien renewing, extending, refinancing or refunding a Lien permitted by clauses (1) through (24) above; provided that (a)
the principal amount of the Indebtedness secured by such Lien is not increased except by an amount equal to a reasonable premium
or other reasonable amount paid, and fees and expenses reasonably incurred, in connection therewith and by an amount equal to any
existing commitments unutilized thereunder and (b) no assets encumbered by any such Lien other than the assets permitted to be
encumbered immediately prior to such renewal, extension, refinance or refund are encumbered thereby (other than improvements thereon,
accessions thereto and proceeds thereof).


 


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


 


(1)         the
principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all
accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);


 


(2)         such
Permitted Refinancing Indebtedness has a final maturity date that is (a) later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged or (b) more than 90 days after the final maturity date of the Notes;


 


(3)         if
the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the
Notes or the Note Guarantees, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes or the Note
Guarantees, as applicable, on terms at least as favorable to the Holders of the Notes as those contained in the documentation governing
the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and


 


(4)         such
Indebtedness is not incurred (other than by way of a Guarantee) by a Restricted Subsidiary of the Company (other than Finance Corp.)
if the Company is the issuer or other primary obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased
or discharged.


 


Notwithstanding the preceding, any Indebtedness
incurred under the Credit Agreement pursuant to Section 4.09 shall be subject only to the refinancing provision in the definition
of Credit Agreement and not pursuant to the requirements set forth in this definition of Permitted Refinancing Indebtedness.


 




    	33 



     


    

 


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


 


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


 


“Present Value” means, as
of any date of determination, the discounted net present value, on a pre-income tax basis, of projected future cash flows from
the production of the Company’s and the Guarantors’ Proved Reserves: (1) calculated in accordance with the SEC guidelines
but using Modified ACNTA Prices as of such date of determination; (2) discounted using an annual discount rate of 10%; (3) as set
forth in a Reserve Report evaluating the Company’s and the Guarantors’ Proved Reserves as of the immediately preceding
fiscal quarter end or fiscal year end, as applicable, which, in the case of the fiscal year end Reserve Report only, shall be prepared
or audited by independent petroleum engineers; (4) adjusted to give effect to the Oil and Gas Hedging Contracts permitted by this
Indenture as in effect on the date of such determination; and (5) in all cases, adjusted to give pro forma effect to all dispositions
and acquisitions completed since the date of the applicable Reserve Report.


 


“Priority Lien” means a Lien
granted by the Company or any Guarantor in favor of the Priority Lien Collateral Agent, at any time, upon any Property of the Company
or any Guarantor to secure Priority Lien Obligations (including Liens on such collateral under the security documents associated
with any Refinancing Credit Facility).


 


“Priority Lien Cap” means,
as of any date, (a) the principal amount of Indebtedness (including any interest paid-in-kind) that may be incurred under clause
(1) of the definition of “Permitted Debt” as of such date, plus (b) the amount of all Hedging Obligations, to the extent
such Hedging Obligations are secured by the Priority Liens, plus (c) the amount of all Bank Product Obligations to the extent such
Bank Product Obligations are secured by the Priority Liens, plus (d) the amount of accrued and unpaid interest (excluding any interest
paid-in-kind) and outstanding fees, to the extent such Obligations are secured by the Priority Liens. For purposes of this definition,
all letters of credit will be valued at the face amount thereof, whether or not drawn.


 


“Priority Lien Collateral Agent”
means the Credit Agreement Agent (or other Person designated by the Credit Agreement Agent), or if the Credit Agreement ceases
to exist, the collateral trustee or other representative of lenders or holders of Priority Lien Obligations designated pursuant
to the terms of the Priority Lien Documents and the Intercreditor Agreement.


 


“Priority Lien Debt” means
Indebtedness of the Issuers and the Guarantors under the Credit Agreement (including letters of credit (with outstanding letters
of credit being deemed to have a principal amount equal to the stated amount thereof) and reimbursement obligations with respect
thereto) or any Refinancing Credit Facility, in each case, that is subject to the Intercreditor Agreement and permitted to be incurred
under clause (1) of the definition of “Permitted Debt” and secured under each applicable Secured Debt Document; provided,
in the case of Indebtedness under any Refinancing Credit Facility, that:


 




    	34 



     


    

 


(a)          on
or before the date on which such Indebtedness is incurred under such Refinancing Credit Facility, such Indebtedness is designated
by an Issuer, in an Officers’ Certificate delivered to the Priority Lien Collateral Agent and the Collateral Trustee, as
“Priority Lien Debt” for the purposes of the Secured Debt Documents; provided that if such Indebtedness is designated
as “Priority Lien Debt,” it cannot also be designated as Parity Lien Debt (or any combination of the two);


 


(b)          the
Collateral Trustee or other representative with respect to such Indebtedness, the Priority Lien Collateral Agent, the Collateral
Trustee, each Issuer and each applicable Guarantor have duly executed and delivered a joinder to the Intercreditor Agreement or
a new Intercreditor Agreement substantially similar to the Intercreditor Agreement, as in effect on the Issue Date, and in a form
reasonably acceptable to each of the parties thereto;


 


(c)          the
aggregate outstanding principal amount of the Priority Lien Obligations, after giving effect to such Refinancing Credit Facility,
shall not exceed the Priority Lien Cap;


 


(d)          all
other requirements set forth in the Intercreditor Agreement as to the confirmation, grant or perfection of the Priority Lien Collateral
Agent Liens to secure such Indebtedness or Obligations in respect thereof are satisfied; and


 


(e)          such
Indebtedness (other than any DIP Financing that is permitted by the Intercreditor Agreement (as defined thereunder)) is pari
passu in right of payment, it being understood that there may be different tranches of Priority Lien Debt with different maturities
and amortization profiles, but the principal amount of Indebtedness under all such tranches must in all other respects be pari
passu in right of payment. Any such Indebtedness (other than any such DIP Financing) that is not consistent with the foregoing
requirement for pari passu treatment in right of payment with the revolving credit loans under the Priority Lien Documents
shall not constitute Priority Lien Debt.


 


“Priority Lien Documents”
means the Credit Agreement and any Refinancing Credit Facility pursuant to which any Priority Lien Debt is incurred and the documents
pursuant to which Priority Liens are granted.


 


“Priority Lien Obligations”
means the Priority Lien Debt and all other Obligations in respect of Priority Lien Debt and Hedging Obligations and Bank Product
Obligations, in each case, that are permitted (or not prohibited) to be incurred and secured by a Priority Lien under the terms
of each applicable Priority Lien Document.


 


“Private Placement Legend”
means the legend set forth in Section 2.06(f)(i) hereof to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.


 




    	35 



     


    

 


“Production Payments” means
Dollar-Denominated Production Payments and Volumetric Production Payments, collectively.


 


“Production Payments and Reserve Sales”
means the grant or transfer by the Company or any of its Restricted Subsidiaries to any Person of a royalty, overriding royalty,
net profits interest, Production Payment, partnership or other interest in Oil and Gas Properties, reserves or the right to receive
all or a portion of the production or the proceeds from the sale of production attributable to such properties where the holder
of such interest has recourse solely to such production or proceeds of production, subject to the obligation of the grantor or
transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner
or other customary standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or
other matters customary in the Oil and Gas Business, including any such grants or transfers pursuant to incentive compensation
programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists or other providers of
technical services to the Company or any of its Restricted Subsidiaries.


 


“Property” means any interest
in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash,
securities, accounts and contract rights.


 


“Proved Reserves” has the
meaning assigned to such term under Rule 4-10(22) of Regulation S-X.


 


“Proved Reserves Coverage Ratio”
means, as of any date of determination, the ratio of (i) the Present Value of the Company’s and the Guarantors’ Proved
Reserves to (ii) the aggregate outstanding principal amount of Secured Debt as of the date of determination.


 


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


 


“Receivables Facility” means
one or more receivables financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time
to time, (a) the Obligations of which are non-recourse (except for Securitization Undertakings made in connection with such facilities)
to the Company or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Company or any
of its Restricted Subsidiaries sells its accounts receivable to either (i) a Person that is not a Restricted Subsidiary or (ii)
a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary, in each case,
with the same or different arrangements, agents, lenders, borrowers or issuer and, in each case, as amended, restated, amended
and restated, supplemented, waived, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified in whole
or in part from time to time and (b) each of which meets the following conditions: (i) the Board of Directors of the Company shall
have determined in good faith that such receivable financing facility (including financing terms, covenants, termination events
and other provisions) is in the aggregate economically fair and reasonable to the Company and the applicable Restricted Subsidiary
or Receivables Subsidiary and (ii) all sales and/or contributions of assets to the applicable Person or Receivables Subsidiary
are made at Fair Market Value (as determined in good faith by the Company).


 




    	36 



     


    

 


“Receivables Fees” means
distributions or payments made directly or by means of discounts with respect to any accounts receivable or participation interest
therein issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with,
any Receivables Facility.


 


“Receivables Subsidiary”
means any Subsidiary of the Company (i) that is formed for the purpose of, and that engages in no business or other activities
other than pursuant to one or more Receivables Facilities and other activities reasonably related thereto and (ii) is designated
as a Receivables Subsidiary by the Board of Directors of the Company, evidenced to the Trustee by filing with the Trustee a certified
copy of the resolutions of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the conditions set forth in the foregoing clause (i).


 


“Refinancing Credit Facility”
means any Credit Facility that refunds, refinances or replaces the Credit Agreement or any other Refinancing Credit Facility, in
each case, in whole and with all commitments thereunder terminated, or, to the extent permitted by the terms of the Credit Agreement
or such Refinancing Credit Facility so refunded, refinanced or replaced, in part.


 


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


 


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


 


“Reporting Default” means
a Default described in Section 6.01(d).


 


“Required Parity Lien Debtholders”
means, at any time, the holders of a majority in aggregate principal amount of all Parity Lien Debt then outstanding, calculated
in accordance with Section 7.2 of the Collateral Trust Agreement. For purposes of this definition, Parity Lien Debt registered
in the name of, or beneficially owned by, the Company or any Affiliate of the Company will be deemed not to be outstanding.


 


“Reserve Report” means a
report setting forth the Proved Reserves attributable to certain Oil and Gas Properties of the Company and the Guarantors, together
with a projection of the rate of production and future net income, taxes, operating expenses, present value of Proved Reserves
(discounted at 10%) and capital expenditures with respect thereto as of such date, based upon the pricing assumptions consistent
with SEC reporting at the time as well as Modified ACNTA Prices as of the date of such report, in each case, in substantially the
same form of Reserve Report required as of the Issue Date be delivered under the Credit Agreement.


 


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


 




    	37 



     


    

 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“S&P” means Standard
& Poor’s Ratings Services, a division of McGraw Hill Financials, Inc., and any successor to the ratings business thereof.


 


“Secured Debt” means Priority
Lien Debt and Parity Lien Debt.


 


“Secured Debt Documents”
means the Priority Lien Documents and the Parity Lien Documents.


 


“Secured Debt Obligations”
means Parity Lien Obligations and Priority Lien Obligations.


 


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


 


“Securitization Undertakings”
means representations, warranties, covenants, repurchase obligations, indemnities and guarantees of performance entered into by
the Company or any Subsidiary of the Company which the Company has determined in good faith to be required by a seller or servicer
(or parent of such seller or servicer) in a Receivables Facility.


 


“Security Documents” means
the Collateral Trust Agreement, each joinder agreement required by the Collateral Trust Agreement, this Indenture (insofar as the
same grants a Lien on Collateral) and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust,
collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by the Company
or any Guarantor creating (or purporting to create) a Parity Lien upon Collateral in favor of the Collateral Trustee, for the benefit
of the Parity Lien Secured Parties, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from
time to time, in accordance with its terms and the provisions of the Collateral Trust Agreement.


 




    	38 



     


    

 


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


 


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


 


“Start Date” means April
4, 2012.


 


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


 


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


 


(1)         any
corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50%
of the total voting power of its Voting Stock is at the time owned or controlled, directly or indirectly, by that Person or one
or more of the other Subsidiaries of that Person (or a combination thereof); and


 


(2)         any
partnership or limited liability company of which (a) more than 50% of the capital accounts, distribution rights, total equity
and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership,
general, special or limited partnership interests or otherwise, and (b) such Person or any Subsidiary of such Person is a controlling
general partner or otherwise controls such entity.


 


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


 


“Treasury Management Arrangement”
means any agreement or other arrangement governing the provision of treasury or cash management services, including deposit accounts,
overdraft, credit or debit card, funds transfer (including electronic funds transfer), automated clearinghouse, zero balance accounts,
returned check concentration, controlled disbursement, lockbox, interstate depository network services, account reconciliation
and reporting and trade finance services and other cash management services.


 




    	39 



     


    

 


“Treasury Rate” means, as
of any redemption date, the yield to maturity as of 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) that has become publicly
available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the period from the redemption date to February 15, 2019;
provided, however, that if the period from the redemption date to February 15, 2019, is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used. The
Company will (a) calculate the Treasury Rate on the second Business Day preceding the applicable redemption date and (b) prior
to such redemption date file with the Trustee an Officers’ Certificate setting forth the Applicable Premium and the Treasury
Rate and showing the calculation of each in reasonable detail.


 


“Trustee” means U.S. Bank
National Association, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.


 


“Unrestricted Definitive Note”
means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.


 


“Unrestricted Global Note”
means a Global Note that does not bear and is not required to bear the Private Placement Legend.


 


“Unrestricted Subsidiary”
means any Subsidiary of the Company (excluding Finance Corp. but including any newly acquired or newly formed Subsidiary or a Person
becoming a Subsidiary through merger or consolidation or Investment therein) that is designated by the Board of Directors of the
Company as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:


 


(1)         has
no Indebtedness other than Non-Recourse Debt owing to any Person other than the Company or any of its Restricted Subsidiaries;


 


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


 


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


 


(4)         has
not Guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries, except to the extent such Guarantee would be released upon such designation.


 


All Subsidiaries of an Unrestricted Subsidiary
shall also be Unrestricted Subsidiaries.


 


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


 




    	40 



     


    

 


“Volumetric Production Payments”
means production payment obligations recorded as deferred revenue in accordance with GAAP, together with all undertakings and obligations
in connection therewith.


 


“Voting Stock” of any specified
Person as of any date means the Capital Stock of such Person entitling the holders thereof (whether at all times or only so long
as no senior class of Capital Stock 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”
means, when applied to any Indebtedness at any date, the number of years obtained by dividing:


 


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


 


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


 


Section
1.02         Other Definitions.


 


	
        

        Term
	Defined in Section
	 	 
	“Affiliate Transaction”	4.11
	“Alternate Offer”	4.15
	“Asset Sale Offer”	4.10
	“Authentication Order”	2.02
	“Change of Control Offer”	4.15
	“Change of Control Payment”	4.15
	“Change of Control Payment Date”	4.15
	“Covenant Defeasance”	8.03
	“DTC”	2.03
	“Event of Default”	6.01
	“Excess Proceeds”	4.10
	“Incremental Funds”	4.07
	“incur”	4.09
	“Legal Defeasance”	8.02
	“Offer Amount”	3.09
	“Offer Period”	3.09
	“Paying Agent”	2.03
	“Payment Default”	6.01
	“Permitted Debt”	4.09
	“Purchase Date”	3.09
	“Registrar”	2.03
	“Restricted Payments”	4.07
	“Surviving Entity”	5.01
	“Trailing Four Quarters”	4.07
	 	 


 






    	41 



     


    




 


Section
1.03         [Reserved].


 


Section
1.04         Rules of Construction.


 


Unless the context otherwise requires:


 


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


 


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


 


(c)         “or”
is not exclusive;


 


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


 


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


 


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


 


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


 


Article
II.

THE NOTES


 


Section
2.01         Form and Dating.


 


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


 


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


 




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


 


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


 


Section
2.02         Execution and Authentication.


 


At least one Officer must sign the Notes for
each Issuer by manual, facsimile or electronically transmitted signature.


 


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


 


A Note will not be valid until authenticated
by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this
Indenture.


 


The Trustee will, upon receipt of a written
order of the Issuers signed by an Officer of each Issuer (an “Authentication Order”), authenticate Notes for
original issue that may be validly issued under this Indenture, including any Additional Notes. The aggregate principal amount
of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Issuers
pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.


 


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


 


Section
2.03         Registrar and Paying
Agent.


 


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


 




    	43 



     


    

 


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


 


The Issuers initially appoint the Trustee to
act as the Registrar and Paying Agent (at its office in New York, New York indicated in the definition of Corporate Trust Office
of the Trustee in Section 1.01 hereof) and to act as Custodian with respect to the Global Notes.


 


Section
2.04         Paying Agent to Hold Money in Trust.


 


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


 


Section
2.05         Holder Lists.


 


The Trustee will preserve in as current a form
as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee is
not the Registrar, the Issuers will furnish to the Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require
of the names and addresses of the Holders.


 


Section
2.06         Transfer and Exchange.


 


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


 


(1)          the
Issuers deliver to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary
or that it is no longer a clearing agency registered under the Exchange Act and,
in either case, a successor Depositary is not appointed by the Company
within 90 days after the date of such notice from the Depositary;


 




    	44 



     


    

 


(2)          the
Issuers, at their option but subject to DTC’s
requirements, determine that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and deliver a written notice to such effect to the Trustee;
or


 


(3)          there
has occurred and is continuing an Event of Default
with respect to the Notes, and the Depositary notifies
the Trustee of its decision to exchange the Global Notes
for Definitive Notes.


 


Upon the occurrence of either of the preceding
events in (1) or (2) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global
Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every
Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section
2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.


 


(b)        Transfer
and Exchange of Beneficial Interests in the Global Notes. The transfer
and exchange of beneficial interests in the Global Notes will be effected through the Depositary,
in accordance with the provisions of this Indenture and the Applicable
Procedures. Beneficial interests in the Restricted Global Notes will be subject to
restrictions on transfer comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global
Notes also will require compliance with either subparagraph (1)
or (2) below, as applicable, as well as one or more of the other following subparagraphs,
as applicable:


 


(1)         Transfer
of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted
Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private
Placement Legend; provided, however, that prior to the expiration of
the Restricted Period, transfers of beneficial interests in the Regulation
S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an initial purchaser
of Notes). Beneficial interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(1).


 


(2)         All
Other Transfers and Exchanges of Beneficial Interests in Global
Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1)
above, the transferor of such beneficial interest must deliver to the Registrar either:





 




    	45 



     


    

  


(A)         both:



 


(i)          a
written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global Note in an amount equal
to the beneficial interest to be transferred or exchanged; and


 


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


 


(B)         both:


 


(i)          a
written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global Note in an amount equal
to the beneficial interest to be transferred or exchanged; and a written order from a Participant
or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the beneficial interest
to be transferred or exchanged; and


 


(ii)         instructions
given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive
Note shall be registered to effect such transfer or exchange referred to in clause
(1) above.


 


Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(g)
hereof.


 


(3)         Transfer
of Beneficial Interests to Another Restricted Global Note. A beneficial
interest in any Restricted Global Note may be transferred
to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2)
above and the Registrar receives the following:


 


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


 


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


 




    	46 



     


    

 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




    	47 



     


    

 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Issuers shall
execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder
of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall
bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.


 




    	48 



     


    

 


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


 


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


 


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


 


and, in each such case set forth in
this Section 2.06(c)(2), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.


 


(3)         Beneficial
Interests in Unrestricted Global Notes to Unrestricted Definitive
Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive
Note or to transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate
principal amount of the applicable Unrestricted Global Note to be reduced accordingly
pursuant to Section 2.06(g) hereof, and the Issuers will execute and the Trustee
will authenticate and deliver to the Person designated in the instructions an Unrestricted
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3)
will be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest requests through instructions
to the Registrar from or through the Depositary
and the Participant or Indirect Participant. The Trustee
will deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3)
will not bear the Private Placement Legend.





 




    	49 



     


    

  


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



 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




    	50 



     


    

 


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


 


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


 


and, in each such case set forth in
this Section 2.06(d)(2), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.


 


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


 


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


 


If any such exchange or transfer from
a Definitive Note to a beneficial interest is effected pursuant to Sections 2.06(d)(2) or (3) above at a time when
an Unrestricted Global Note has not yet been issued, the Issuers will issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of Definitive Notes so transferred.


 


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


 




    	51 



     


    

 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


and, in each such case set forth in
this Section 2.06(e)(2), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.


 


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


 




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(f)          Legends.
In addition to the legend appearing on the face of the form of the Notes in Exhibit A
hereto relating to original issue discount, the following legend will appear on the face
of all Global Notes and Definitive Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions of this Indenture.


 


(i)          Private
Placement Legend.


 


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


 


“THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT (A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL
BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT
TO EACH SUCH ACCOUNT, OR (B) IT IS NOT A “U.S. PERSON” (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT)
AND (2) AGREES FOR THE BENEFIT OF VANGUARD NATURAL RESOURCES, LLC AND VNR FINANCE CORP. THAT IT WILL NOT OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO VANGUARD NATURAL RESOURCES, LLC OR VNR FINANCE CORP., (B) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 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 NOT A QUALIFIED INSTITUTIONAL BUYER AND THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF SECURITIES OF $250,000, OR (F) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR (2)(D) ABOVE,
A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (F) ABOVE, VANGUARD NATURAL RESOURCES, LLC AND VNR FINANCE CORP. RESERVE
THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER
TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.”


 




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


 


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


 


“THIS GLOBAL NOTE IS HELD
BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN
PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE ISSUERS.


 




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UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE
ISSUERS OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.”


 


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


 


“THIS
NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT UNDER SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE “CODE”). YOU MAY CONTACT THE COMPANY’S TREASURER BY MAIL AT 5847 SAN FELIPE, SUITE 3000, HOUSTON, TEXAS
77057 OR BY TELEPHONE AT (832) 327-2255, WHO WILL PROVIDE YOU WITH ANY REQUIRED INFORMATION REGARDING THE ORIGINAL ISSUE DISCOUNT.”


 


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


 


(h)         General
Provisions Relating to Transfers and Exchanges.


 


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


 


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


 




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(iii)        The
Registrar will not be required to register the transfer of or
exchange of any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in part.


 


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


 


(v)         Neither
the Registrar nor the Issuers will be required:


 


(A)         to
issue, to register the transfer of or to exchange any Notes
during a period beginning at the opening of business 15 days before the day of any selection of Notes
for redemption under Section 3.02 hereof
and ending at the close of business on the day of selection;


 


(B)         to
register the transfer of or to exchange any Note selected
for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part; or


 


(C)         to
register the transfer of or to exchange a Note between
a record date and the next succeeding interest payment date.


 


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


 


(vii)       The
Trustee will authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02
hereof.


 


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


 


Section
2.07         Replacement Notes.


 


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


 




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


 


Section
2.08         Outstanding Notes.


 


The Notes outstanding at any time are all the
Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in
the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section
2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because
the Issuers or an Affiliate of the Issuers holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall
not be deemed to be outstanding for purposes of Section 3.07(a) hereof.


 


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


 


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


 


If the Paying Agent (other than the Issuers,
a Subsidiary or an Affiliate of any thereof) holds, by 10 a.m., New York City time, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding
and will cease to accrue interest.


 


Section
2.09         Treasury Notes.


 


In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers or any Guarantor, or by
any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers or any
Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be
protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.


 


Section
2.10         Temporary Notes.


 


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


 




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Holders of temporary Notes will be entitled
to all of the benefits of this Indenture.


 


Section
2.11         Cancellation.


 


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


 


Section
2.12         Defaulted Interest.


 


If the Issuers default in a payment of interest
on the Notes, they will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and
in Section 4.01 hereof. The Issuers will notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment. The Issuers will fix or cause to be fixed each such special record date
and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the Issuers (or, upon the written request of the Issuers,
the Trustee in the name and at the expense of the Issuers) will mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest to be paid.


 


Article
III.

REDEMPTION AND PREPAYMENT


 


Section
3.01         Notices to Trustee.


 


If the Issuers elect to redeem Notes pursuant
to the optional redemption provisions of Section 3.07 hereof, they must furnish to the Trustee, at least five Business Days
prior to the giving of notice of a redemption, an Officers’ Certificate setting forth:


 


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


 


(b)         the
redemption date;


 


(c)         the
principal amount of Notes to be redeemed; and


 


(d)         the
redemption price (if then determined and otherwise the method of determination).


 




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Section
3.02         Selection of Notes to Be
Redeemed.


 


If less than all of the Notes are to be redeemed
at any time, the Trustee will select Notes for redemption on a pro rata basis (or, in the case of Notes issued in global form pursuant
to Article II hereof, by such method as DTC or its nominee or successor may require or, where such nominee or successor
is the Trustee, a method that most nearly approximates pro rata selection as the Trustee deems fair and appropriate) unless otherwise
required by law or applicable stock exchange or depositary requirements.


 


In the event of partial redemption by lot, the
particular Notes to be redeemed will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior
to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.


 


The Trustee will promptly notify the Issuers
in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes and portions of Notes selected will be in amounts of $1,000 or whole multiples of $1,000 in excess
thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder
shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.


 


Section
3.03         Notice of Redemption.


 


At least 30 days but not more than 60 days before
a redemption date, the Issuers will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption
date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant
to Article VIII or XI hereof.


 


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


 


(a)         the
redemption date;


 


(b)         the
redemption price (if then determined and otherwise the method of determination);


 


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


 


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


 


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


 




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


 


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


 


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


 


At the Issuers’ request, the Trustee will
give the notice of redemption in the Issuers’ names and at the Issuers’ expense; provided, however, that
the Officers’ Certificate delivered to the Trustee pursuant to Section 3.01 hereof requests that the Trustee give
such notice and sets forth the information to be stated in such notice as provided in the preceding paragraph.


 


Section
3.04         Effect of Notice of Redemption.


 


Once notice of redemption is mailed in accordance
with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable (subject to the provisions of the
next succeeding sentence) on the redemption date at the redemption price. A notice of redemption may not be conditional, except
that any redemption pursuant to Section 3.07(a) may, at the Company’s discretion, be subject to completion of the
related Equity Offering.


 


Section
3.05         Deposit of Redemption or Purchase
Price.


 


No later than 10:00 a.m., New York City time,
on the redemption or purchase date, the Issuers will deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption or purchase price of, and accrued interest, if any, on all Notes to be redeemed or purchased on that date. The Trustee
or the Paying Agent will promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers
in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest, if any, on all Notes to be
redeemed or purchased.


 


If the Issuers comply with the provisions of
the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions
of Notes called for redemption or accepted for purchase. If a Note is redeemed or purchased on or after an interest record date
but on or prior to the related interest payment date, then any accrued and unpaid interest, if any, shall be paid to the Person
in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or tendered
for purchase is not so paid upon surrender for redemption or purchase because of the failure of the Issuers to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes.


 




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Section
3.06         Notes Redeemed or
Purchased in Part.



 


Upon surrender of a Note that is redeemed or
purchased in part, the Issuers will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder
at the expense of the Issuers a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.


 


Section
3.07         Optional Redemption.


 


(a)         At
any time prior to February 15, 2019, the Issuers may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture, with an amount of cash not greater than the net cash
proceeds of an Equity Offering by the Company, upon
notice as provided in this Indenture, at a redemption
price equal to 107.000% of the principal amount of the Notes
redeemed, plus accrued and unpaid interest, if any, to the date of redemption (subject
to the rights of Holders on the relevant record date to receive interest on the relevant interest
payment date), provided that:


 


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


 


(2)         the
redemption occurs within 180 days of the date of the closing of such Equity Offering.


 


(b)         At
any time prior to February 15, 2019, the Issuers may on any one or
more occasions redeem all or a part of the Notes,
upon notice as provided in this Indenture, at a redemption
price equal to the sum of:


 


(1)         100%
of the principal amount thereof, plus


 


(2)         the
Applicable Premium as of the redemption date,


 


plus accrued and unpaid interest, if any, to
the redemption date (subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest
payment date).


 


(c)         Except
pursuant to Section 3.07(a), (b) or (e),
the Notes will not be redeemable at the Issuers’
option prior to February 15, 2019.


 




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(d)         On
and after February 15, 2019, the Issuers may on any one or
more occasions redeem all or a part of the Notes,
upon notice as provided in this Indenture, at the
redemption prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest, if any, on the Notes redeemed, to the applicable redemption
date, subject to the rights of Holders on the relevant record date to receive interest on the relevant
interest payment date, if redeemed during the twelve-month period beginning on February 15 of the years indicated below:


 


	Year	 	Percentage	 
	2019	 	 	105.250	%
	2020	 	 	103.500	%
	2021	 	 	101.750	%
	2022 and thereafter	 	 	100.000	%



 


(e)         The
Issuers may redeem all (but not a portion of) the Notes
when permitted by, and pursuant to the conditions in, Section 4.15(f) hereof.


 


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


 


Section
3.08         Mandatory Redemption.


 


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


 


Section
3.09         Offer to Purchase by Application of Excess Proceeds.


 


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


 


The Asset Sale Offer shall be made to all Holders
and, if required by the terms of other Parity Lien Debt, to all holders of such other Parity Lien Debt. The Asset Sale Offer will
remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to
the extent that a longer period is required by applicable law (the “Offer Period”). No later than three Business
Days after the termination of the Offer Period (the “Purchase Date”), the Company will apply all Excess Proceeds
(the “Offer Amount”) to the purchase of Notes and such other Parity Lien Debt (on a pro rata basis based on
the principal amount of Notes and such other Parity Lien Debt surrendered, if applicable) or, if less than the Offer Amount has
been tendered, all Notes and other Parity Lien Debt tendered in response to the Asset Sale Offer. Payment for any Notes so purchased
will be made in the same manner as interest payments are made.


 


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


 




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Upon the commencement of an Asset Sale Offer,
the Company will send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice
will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer.
The notice, which will govern the terms of the Asset Sale Offer, will state:


 


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


 


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


 


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


 


(d)         that,
unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest
on and after the Purchase Date;


 


(e)         that
Holders electing to have a Note purchased pursuant
to an Asset Sale Offer may elect to have Notes purchased
in denominations of $1,000 or an integral multiple of $1,000
in excess thereof;


 


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


 


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


 


(h)         that,
if the aggregate principal amount of Notes surrendered
by Holders thereof exceeds the Offer Amount allocated
to the purchase of Notes in the Asset Sale Offer,
the Trustee will select the Notes to be purchased
on a pro rata basis (except that any Notes represented by a Global Note shall be selected
by such method as DTC or its nominee or successor
may require or, where such nominee or successor is
the Trustee, a method that most nearly approximates pro rata selection as the Trustee
deems fair and appropriate) based on the principal amount of Notes surrendered (with
such adjustments as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or an integral multiple of
$1,000 in excess thereof, will be purchased); and


 


(i)          that
Holders whose Notes were purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).


 




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On or before the Purchase Date, the Company
will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Notes or portions thereof tendered
pursuant to the Asset Sale Offer and required to be purchased pursuant to this Section 3.09 and Section 4.10 hereof,
or if Notes in an aggregate principal amount less than the Offer Amount allocated to the purchase of Notes in the Asset Sale Offer
have been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together
with an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the depositary for the Asset Sale Offer or the Paying Agent, as the case
may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Issuers
will promptly issue a new Note, and the Trustee, upon written request from the Company, will authenticate and mail or deliver (or
cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of
the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Asset Sale Offer on the Purchase Date.


 


Article
IV.

COVENANTS


 


Section
4.01         Payment of Notes.


 


The Issuers will pay or cause to be paid the
principal of, premium on, if any, and interest on, the Notes on the dates and in the manner provided in the Notes. Principal, premium,
if any, and interest, will be considered paid on the date due if the Paying Agent, if other than the Issuers or a Subsidiary of
the Company, holds as of 10 a.m., New York City time, on the due date money deposited by the Issuers in immediately available funds
and designated for and sufficient to pay all principal, premium, if any, and interest, if any, then due.


 


The Issuers will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at a rate that is 1% higher than the then applicable
interest rate on the Notes to the extent lawful; they will pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest, if any (without regard to any applicable grace period), at the same rate
to the extent lawful.


 


Section
4.02         Maintenance of Office or Agency.


 


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


 




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


 


Section
4.03         Reports.


 


(a)         Whether
or not required by the rules and regulations of the Commission,
so long as any Notes are outstanding, the Company
will furnish to the Holders of the Notes or cause
the Trustee to furnish to the Holders of the Notes
(or file with the SEC for public availability),
within the time periods specified in the SEC’s rules and regulations applicable to
an accelerated filer:


 


(1)         all
quarterly and annual reports that would be required to be filed with the Commission on Forms
10-Q and 10-K if the Company were required to file such reports, and in any event including
a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” with respect to the
annual report only, a report on the Company’s consolidated financial statements by
the Company’s certified independent accountants, and the Present
Value of the Company’s and the Guarantors’
Proved Reserves determined by the Company for the purposes of Section 4.07(a)(I)(a);
and


 


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


 


The availability of the foregoing reports on
the SEC’s EDGAR filing system will be deemed to satisfy the foregoing delivery requirements. All such reports will be prepared
in all material respects in accordance with all of the rules and regulations applicable to such reports. If, notwithstanding the
foregoing, the SEC will not accept the Company’s filings for any reason, the Company will post the reports referred to in
the preceding paragraphs on its website within the time periods applicable to an accelerated filer that would apply if the Company
were required to file those reports with the SEC.


 


(b)         For
so long as any Notes remain outstanding and are “restricted
securities” under Rule 144 under the Securities Act,
if at any time the Company is not required to file with the SEC
the reports required by Section 4.03(a), it will
furnish to Beneficial Owners of Notes and to prospective investors, upon request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities
Act. The Company will also prepare or cause
to be prepared a Reserve Report as of each December 31 and each June 30, which, in the case of each Reserve
Report as of December 31, will be prepared or audited
by independent reserve engineers.


 


(c)         If
the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information required
by Section 4.03(a) will include, to the extent
material, a reasonably detailed presentation, either on the face of the financial statements or
in the footnotes thereto, and in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” of the financial condition and results of operations of the Company and
its Restricted Subsidiaries separate from the financial condition and results of operations
of the Unrestricted Subsidiaries of the Company.


 




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(d)         Any
and all Defaults or Events of Default arising from
a failure to furnish or file in a timely manner a report or
certification required by this Section 4.03
shall be deemed cured (and the Company shall be deemed to be in compliance with this
Section 4.03) upon furnishing or
filing such report or certification as contemplated by this Section 4.03
(but without regard to the date on which such report or certification is so furnished
or filed); provided that such cure shall not
otherwise affect the rights of the Holders under Article VI
hereof if the principal, premium, if any, and interest have been accelerated in accordance with the terms of this Indenture
and such acceleration has not been rescinded or cancelled prior to such cure.


 


Section
4.04         Compliance Certificate.


 


(a)         The
Issuers shall deliver to the Trustee, within 90 days
after the end of each fiscal year, beginning with the fiscal year ending December 31, 2016, an Officers’
Certificate stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the signing Officers
with a view to determining whether the Issuers have kept, observed, performed and
fulfilled their obligations under this Indenture,
and further stating, as to each such Officer signing such certificate, that to the best
of his or her knowledge the Issuers have kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and are not
in default in the performance or observance of any
of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default has occurred, describing
all such Defaults or Events of Default of which he
or she may have knowledge and what action the Issuers are
taking or propose to take with respect thereto).


 


(b)         So
long as any of the Notes are outstanding, the Issuers
will deliver to the Trustee, forthwith upon any Officer
of the Company or Finance Corp. becoming aware of any Default
or Event of Default, a written statement specifying such Default
or Event of Default and what action the Issuers are
taking or propose to take with respect thereto.


 


Section
4.05         Taxes.


 


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


 


Section
4.06         Stay, Extension and Usury Laws.


 


Each of the Issuers and each of the Guarantors
covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and each of the Issuers and each of the Guarantors (to the
extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will
not, by resort to any such law, 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 has been enacted.


 




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Section
4.07         Restricted Payments.


 


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


 


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


 


(2)          repurchase,
redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving the Company)
any Equity Interests of the Company or any direct or indirect parent of the Company;


 


(3)          make
any payment on or with respect to, or repurchase,
redeem, defease or otherwise acquire or retire for
value the Existing Unsecured Notes or any Indebtedness of
the Issuers or any Guarantor that is contractually
subordinated to the Notes or to any Note Guarantee (in
each case, excluding (a) any intercompany Indebtedness between or
among the Company and any of its Restricted Subsidiaries,
(b) the repurchase or other acquisition or retirement for value of any such Indebtedness
in anticipation of satisfying a sinking fund or other payment obligation due within
90 days after the date of such repurchase or other acquisition or retirement for value and
(c) a payment of interest or principal at the Stated Maturity
thereof); or


 


(4)          make
any Restricted Investment (all such payments and other actions set forth in these clauses
4.07(a)(1) through (4) being collectively referred to as “Restricted
Payments”),


 


unless, at the time of and after giving effect
to such Restricted Payment, no Default (except a Reporting Default) or Event of Default has occurred and is continuing or would
occur as a consequence of such Restricted Payment and either:


 


(I)          if
the Fixed Charge Coverage Ratio for the Company’s
most recently ended four full fiscal quarters for which internal financial statements are available
at the time of such Restricted Payment (the “Trailing Four Quarters”)
is not less than 2.25 to 1.0, such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and
its Restricted Subsidiaries (excluding Restricted Payments
permitted by clauses (2) through (12) of Section 4.07(b))
with respect to the fiscal quarter for which such Restricted Payment is made, is less than
the sum, without duplication, of:


 




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(a)         to
the extent that at the time of making a Restricted Payment, the Proved
Reserves Coverage Ratio as of such date is not less than 1.0 to 1.0, Available Cash with
respect to the Company’s preceding fiscal quarter; plus


 


(b)         100%
of the aggregate net proceeds, and the Fair Market Value
of any Capital Stock of Persons engaged primarily
in the Oil and Gas Business or any other assets that are used or
useful in the Oil and Gas Business, in each case received by the Company
since the Start Date as a contribution to its common equity capital or
from the issue or sale of Equity Interests of
the Company (other than Disqualified Stock) or
from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable
debt securities that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Company);
plus


 


(c)         to
the extent that any Restricted Investment that was made after the Start
Date is sold for cash or Cash Equivalents or otherwise liquidated or
repaid for cash or Cash Equivalents, the return of capital with respect to such Restricted
Investment (less the cost of disposition, if any); plus


 


(d)         the
net reduction in Restricted Investments resulting from dividends, repayments of loans or
advances, or other transfers of assets in each case to the Company
or any of its Restricted Subsidiaries from any Person
(including, without limitation, Unrestricted Subsidiaries) or
from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries, to the extent such amounts have not been included in Available Cash for any period commencing on or
after the Start Date (items (b), (c)
and (d) being referred to as “Incremental
Funds”); minus


 


(e)         the
aggregate amount of Incremental Funds previously expended pursuant to this clause (I)
and clause (II) below; or


 


(II)         if
the Fixed Charge Coverage Ratio for the Trailing Four Quarters
is less than 2.25 to 1.0, such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and
its Restricted Subsidiaries (excluding Restricted Payments
permitted by clauses (2) through (12) of Section 4.07(b))
with respect to the fiscal quarter for which such Restricted Payment is made (such Restricted
Payments for purposes of this clause (II) meaning only distributions on the Company’s
common units), is less than the sum, without duplication, of:


 


(a)         $125.0
million, less the aggregate amount of all prior Restricted Payments made by the Company
and its Restricted Subsidiaries pursuant to this clause (II)(a)
since the Issue Date; plus


 


(b)         Incremental
Funds to the extent not previously expended pursuant to this clause (II) or the immediately
preceding clause (I) of this paragraph.


 




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


 


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


 


(2)         the
making of any Restricted Payment in exchange for, or out
of or with the net cash proceeds received by the Company of the substantially concurrent
sale (other than to a Subsidiary of the Company)
of, Equity Interests of the Company (other than Disqualified
Stock) or from the substantially concurrent contribution of common equity capital
to the Company; provided that the amount of
any such net cash proceeds that are utilized for any such Restricted Payment will not be
considered to be net proceeds of Equity Interests for
purposes of Section 4.07(a)(I)(b) and will
not be considered to be net cash proceeds from an Equity Offering for purposes of
Section 3.07 hereof;


 


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


 


(4)         the
repurchase, redemption, defeasance or other acquisition or retirement for value of any (a)
Existing Unsecured Notes solely with the proceeds of, or
in exchange for, Parity Lien Debt and (b) unsecured Indebtedness
of the Company or any of its Restricted Subsidiaries
(including the Existing Unsecured Notes) or any
Indebtedness of the Issuers or any Guarantor
that is contractually subordinated to the Notes or to any Note
Guarantee, in each case, solely with the net cash proceeds from a substantially concurrent incurrence of Permitted
Refinancing Indebtedness;


 


(5)         so
long as no Default (other than a Reporting Default) or Event
of Default has occurred and is continuing or would be caused thereby, the repurchase,
redemption or other acquisition or retirement for value of any Equity
Interests of the Company or any Restricted Subsidiary
of the Company held by any current or former
officer, director or employee of the Company
or any of its Restricted Subsidiaries pursuant to any equity subscription agreement,
equity option agreement, unitholders’ agreement or similar agreement; provided
that the aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests may not exceed $5.0 million in any
calendar year (with any portion of such $5.0 million amount that is unused in any calendar
year to be carried forward to successive calendar years and added to such amount) plus, to the extent not previously applied or
included, (a) the cash proceeds received by the Company or any of its Restricted
Subsidiaries from sales of Equity Interests of the Company
to employees or directors of the Company or its
Affiliates that occur after the Issue Date (to the
extent the cash proceeds from the sale of such Equity Interests have not otherwise been
applied to the payment of Restricted Payments by virtue of Sections 4.07(a)(I)(b)
or (II)(b)) and (b) the cash proceeds of key man life insurance policies received by the Company
or any of its Restricted Subsidiaries after the Issue Date;


 




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(6)         the
repurchase of Equity Interests deemed to occur upon the exercise of units or
other equity options to the extent such Equity Interests represent a portion of the
exercise price of those unit or other equity options and any repurchase or
other acquisition of Equity Interests made in lieu of withholding taxes in connection
with any exercise or exchange of equity options, warrants, incentives or
other rights to acquire Equity Interests;


 


(7)         the
repurchase, redemption or other acquisition or retirement for value of Equity
Interests of the Company or any Restricted Subsidiary
of the Company representing fractional units of such Equity
Interests in connection with a merger or consolidation involving the Company
or such Restricted Subsidiary or any other transaction permitted by this Indenture;


 


(8)         any
payments in connection with a consolidation, merger or transfer of assets in connection
with a transaction that is not prohibited by this Indenture not to exceed $5.0
million in the aggregate after the Issue Date;


 


(9)         so
long as no Default or Event of Default has occurred
and is continuing or would be caused thereby, the declaration and payment of regularly scheduled
or accrued dividends to holders of any class or series
of Disqualified Stock of the Company or any Preferred
Stock of any Restricted Subsidiary of the Company
issued on or after the Issue Date in accordance
with Section 4.09 hereof;


 


(10)        payments
of cash, dividends, distributions, advances or other Restricted
Payments by the Company or any of its Restricted
Subsidiaries to allow the payment of cash in lieu of the issuance of fractional units upon (i) the exercise of options or
warrants or (ii) the conversion or exchange
of Capital Stock of any such Person;


 


(11)        so
long as no Default (other than a Reporting Default) or Event
of Default has occurred and is continuing or would be caused thereby, other Restricted
Payments in an aggregate amount not to exceed $5.0 million since the Issue Date;
and


 


(12)        purchases
of receivables in connection with a Receivables Facility and distributions or
payments of Receivables Fees.


 


The amount of all Restricted Payments (other
than cash) will be the Fair Market Value, on the date of the Restricted Payment, of the Restricted Investment proposed to be made
or the asset(s) or securities proposed to be transferred or issued by the Company or any of its Restricted Subsidiaries, as the
case may be, pursuant to the Restricted Payment, except that the Fair Market Value of any non-cash dividend paid within 60 days
after the date of declaration will be determined as of such date of declaration. The Fair Market Value of any Restricted Investment,
assets or securities that are required to be valued by this Section 4.07 will be determined in accordance with the definition
of that term. For purposes of determining compliance with this Section 4.07, (x) in the event that a Restricted Payment
meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (12)
of this Section 4.07(b), or is permitted pursuant to Section 4.07(a), the Company will be permitted to classify (or
later classify or reclassify in whole or in part in its sole discretion) such Restricted Payment (or portion thereof) on the date
made or later reclassify such Restricted Payment (or portion thereof) in any manner that complies with this Section 4.07;
and (y) in the event a Restricted Payment is made pursuant to clause (I) or (II) of Section 4.07(a), the Company will be
permitted to classify whether all or any portion thereof is being (and in the absence of such classification shall be deemed to
have classified the minimum amount possible as having been) made with Incremental Funds.


 




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Section
4.08         Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.


 


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


 


(1)         pay
dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries,
or pay any Indebtedness owed to the Company
or any of its Restricted Subsidiaries; provided
that the priority that any series of Preferred Stock of a Restricted
Subsidiary has in receiving dividends or liquidating distributions before dividends
or liquidating distributions are paid in respect of common stock of such Restricted
Subsidiary shall not constitute a restriction on the ability to make dividends or distributions
on Capital Stock for purposes of this Section 4.08;


 


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


 


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


 


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


 


(1)         agreements
governing Existing Indebtedness and the Credit Agreement
as in effect on the Issue Date and any amendments, restatements, modifications, renewals,
supplements, refundings, replacements or refinancings of those agreements; provided
that the amendments, restatements, modifications, renewals, supplements, refundings, replacements or
refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions
than those contained in those agreements on the Issue Date;


 


(2)         the
Note Documents;


 


(3)         agreements
governing other Indebtedness permitted to be incurred under the provisions of Section
4.09 hereof and any amendments, restatements,
modifications, renewals, supplements, refundings, replacements or refinancings of those
agreements; provided that the restrictions therein are not materially more restrictive,
taken as a whole, than those contained in this Indenture, the Notes
and the Note Guarantees or the Credit Agreement as
in effect on the Issue Date;


 




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(4)         applicable
law, rule, regulation, order, approval, license, permit or similar restriction;


 


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


 


(6)         customary
non-assignment provisions in Hydrocarbon purchase and sale or
exchange agreements or similar operational agreements or
in licenses, easements or leases, in each case, entered into in the ordinary course
of business;


 


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


 


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


 


(9)         Permitted
Refinancing Indebtedness; provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive,
taken as a whole, than those contained in the agreements governing the Indebtedness being
refinanced;


 


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


 


(11)        provisions
limiting the disposition or distribution of assets or property
in joint venture agreements, asset sale agreements,
sale-leaseback agreements, stock sale agreements and other similar agreements (including agreements entered into in connection
with a Restricted Investment) entered into with the approval of the Company’s
Board of Directors, which limitation is applicable only to the assets or
property that are the subject of such agreements;


 


(12)        any
agreement or instrument relating to any property or assets
acquired after the Issue Date, so long as such encumbrance or restriction relates only to
the property or assets so acquired and is not and was not created in anticipation of such
acquisition;


 




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(13)        encumbrances
or restrictions on cash, Cash Equivalents or other
deposits or net worth imposed by customers or lessors
under contracts or leases entered into in the ordinary course of business;


 


(14)        the
issuance of Preferred Stock by a Restricted Subsidiary of
the Company or the payment of dividends thereon in accordance with the terms thereof; provided
that issuance of such Preferred Stock is permitted pursuant to Section 4.09
and the terms of such Preferred Stock do not expressly restrict the ability of a
Restricted Subsidiary of the Company to pay dividends
or make any other distributions on its Equity Interests
(other than requirements to pay dividends or liquidation preferences on such Preferred
Stock prior to paying any dividends or making any other distributions on such other
Equity Interests);


 


(15)        in
the case of any Foreign Subsidiary, any encumbrance or restriction
contained in the terms of any Indebtedness or any agreement pursuant to which such Indebtedness
was incurred if either (a) the encumbrance or restriction applies only in the event
of a payment default or a default with respect to
a financial covenant in such Indebtedness or agreement or
(b) the Company determines that any such encumbrance of restriction will
not materially affect the Company’s ability to make principal or
interest payments on the Notes, as determined in good faith by the Board
of Directors of the Company, whose determination shall be conclusive;


 


(16)        restrictions
created in connection with any Receivables Facility that in the good faith determination
of the Company are necessary or advisable to effect
such Receivables Facility; provided that such
restrictions apply only to such Receivables Subsidiary; or


 


(17)        any
Permitted Investment.


 


Section
4.09         Incurrence of Indebtedness and
Issuance of Preferred Stock.


 


(a)         The
Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly,
create, incur, issue, assume, Guarantee or otherwise
become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, “incur”) any Indebtedness
(including Acquired Debt), and the Company will not issue any Disqualified
Stock and will not permit any of its Restricted Subsidiaries
to issue any Preferred Stock; provided,
however, that the Issuers may incur Indebtedness
(including Acquired Debt) or issue Disqualified
Stock, and the Guarantors may incur Indebtedness
(including Acquired Debt) or issue Preferred
Stock, if the Fixed Charge Coverage Ratio for the Company’s
most recently ended four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or such Preferred
Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the Disqualified Stock or the
Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter
period.


 




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(b)         Section
4.09(a) will not prohibit the incurrence of any
of the following items of Indebtedness or issuances of Disqualified
Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):


 


(1)         the
incurrence by the Company and any of its Restricted Subsidiaries
of additional Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time outstanding under this
clause (1) (with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) not to exceed the greatest of (i) $1.8 billion, (ii) the Borrowing
Base in effect at the time of incurrence and (iii) $950.0 million plus 35.0% of the
Company’s Modified ACNTA determined on the
date of such incurrence;


 


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


 


(3)         the
incurrence by the Issuers and the Guarantors of Indebtedness
represented by (a) the Notes and the related Note Guarantees
to be issued on the Issue Date and (b) Additional
Notes and related Note Guarantees or other Parity
Lien Debt, if the Proved Reserves Coverage Ratio would have been at least 1.25 to
1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom);


 


(4)         the
incurrence by the Company or any of its Restricted Subsidiaries
of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations,
in each case, incurred for the purpose of financing all or any part of the purchase price
or cost of design, construction, installation or improvement
of property, plant or equipment used in the business
of the Company or any of its Restricted Subsidiaries,
in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred
to renew, refund, refinance, replace, defease or discharge any Indebtedness
incurred pursuant to this clause (4), not to exceed $25.0
million at any time outstanding;


 


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


 


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


 


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


 




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(b)         (i)
any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary
of the Company and (ii) any sale or other
transfer of any such Indebtedness to a Person that
is not either the Company or a Restricted Subsidiary of
the Company,


 


will be deemed, in each case, to constitute
an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by
this clause (6);


 


(7)         the
issuance by any of the Company’s Restricted Subsidiaries
to the Company or to any of its Restricted Subsidiaries
of any Preferred Stock; provided, however,
that:


 


(a)         any
subsequent issuance or transfer of Equity Interests that
results in any such Preferred Stock being held by a Person
other than the Company or a Restricted Subsidiary
of the Company; and


 


(b)         any
sale or other transfer of any such Preferred Stock to
a Person that is not either the Company or a Restricted
Subsidiary of the Company,


 


will
be deemed, in each case, to constitute an issuance of such Preferred Stock by such
Restricted Subsidiary that was not permitted by this clause (7);


 


(8)          the
incurrence by the Company or any of its Restricted Subsidiaries
of Hedging Obligations and Bank Product Obligations,
in each case, in the ordinary course of business and not for speculative purposes;


 


(9)          the
Guarantee by the Company or any of the Guarantors
of Indebtedness of the Company or a Restricted
Subsidiary of the Company to the extent that the guaranteed Indebtedness
was permitted to be incurred by another provision of this Section 4.09; provided
that if the Indebtedness being guaranteed is subordinated to or
pari passu with the Notes, then the Guarantee
must be subordinated or pari passu, as applicable, to the same extent as the
Indebtedness guaranteed;


 


(10)        the
incurrence by the Company or any of the Guarantors of
Indebtedness in respect of self-insurance obligations or
bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided
by the Company or a Restricted Subsidiary in
the ordinary course of business and any Guarantees or letters of credit functioning as or
supporting any of the foregoing bonds or obligations and workers’ compensation
claims in the ordinary course of business;


 


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


 




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(12)        the
incurrence by the Company or any of its Restricted Subsidiaries
of in-kind obligations relating to net oil or natural
gas balancing positions arising in the ordinary course of business;


 


(13)        any
obligation arising from agreements of the Company or any Restricted
Subsidiary of the Company providing for indemnification, adjustment of purchase price,
earn outs, or similar obligations, in each case,
incurred or assumed in connection with the disposition or
acquisition of any business, assets or Capital Stock of a Restricted
Subsidiary in a transaction permitted by this Indenture, provided
that such obligation is not reflected on the face of the balance sheet of the Company or
any Restricted Subsidiary;


 


(14)        the
incurrence by the Company or any of its Restricted Subsidiaries
of liability in respect of Indebtedness of any Unrestricted
Subsidiary of the Company or any Joint Venture but
only to the extent that such liability is the result of the Company’s or
any such Restricted Subsidiary’s being a general partner or
member of, or owner of an Equity Interest in,
such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness,
provided that after giving effect to any such incurrence,
the aggregate principal amount of all Indebtedness incurred under this clause (14)
and then outstanding does not exceed $25.0 million;


 


(15)        the
incurrence by the Company or its Restricted Subsidiaries
of Permitted Acquisition Indebtedness;


 


(16)        the
incurrence by the Company or any of its Restricted Subsidiaries
of additional Indebtedness or the issuance by the Company
of any Disqualified Stock in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge
any Indebtedness incurred or Disqualified Stock issued
pursuant to this clause (16), not to exceed the greater of (i) $50.0
million and (ii) 5.0% of the Company’s Modified
ACNTA determined on the date of such incurrence or issuance; and


 


(17)        (a)
Indebtedness incurred by a Receivables Subsidiary in
a Receivables Facility that is without recourse to the Company
or any Restricted Subsidiary other than the Receivables
Subsidiary (except for Securitization Undertakings) and (b) to the extent constituting
Indebtedness, obligations of the Company
or a Restricted Subsidiary as seller or servicer
under a Receivables Facility and any guarantee by
the Company of such Indebtedness.


 


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


 




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For purposes of determining compliance with
this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (1) through (17) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company
will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide
or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness
under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially
be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted
Debt and in all such cases may not be reclassified.


 


The accrual of interest or Preferred Stock dividends,
the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien in
the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change
in accounting principles, and the payment of dividends on Preferred Stock or Disqualified Stock in the form of additional securities
of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance
of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof is included
in Fixed Charges of the Company as accrued to the extent required by the definition of such term.


 


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


 


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


 


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


 


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


 


(a)         the
Fair Market Value of such assets at the date of determination; and


 


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


 


Section
4.10         Asset Sales.


 


(a)          The
Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:


 


(1)         the
Company (or a Restricted
Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at
least equal to the Fair Market Value (measured as of the date of the definitive agreement
with respect to such Asset Sale) of the assets or Equity
Interests issued or sold or otherwise disposed
of; and


 




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(2)         at
least 75% of the aggregate consideration received in the Asset Sale by the Company
or a Restricted Subsidiary and all other Asset Sales
since the Issue Date is in the form of cash or Cash
Equivalents. For purposes of this provision, each of the following will be deemed
to be cash:


 


(i)          any
liabilities, as shown on the Company’s most recent consolidated balance sheet, of
the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to the Notes or any
Note Guarantee) that are assumed by the transferee of any such assets pursuant to a customary
novation or indemnity agreement that releases the Company
or such Restricted Subsidiary from or indemnifies
against further liability;


 


(ii)         with
respect to any Asset Sale of oil and gas properties by
the Company or any of its Restricted Subsidiaries,
the costs and expenses related to the exploration, development, completion or production
of such properties and activities related thereto which the transferee (or an Affiliate
thereof) agrees to pay; and


 


(iii)        any
securities, notes or other obligations received by
the Company or any Restricted Subsidiary from such
transferee that are, within 90 days of the Asset Sale, converted by the Company
or such Restricted Subsidiary into cash, to the extent of the cash received in that
conversion.


 


(b)          Within
360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company (or any Restricted
Subsidiary) may apply such Net Proceeds at its option to any combination of the following:


 


(1)         to
redeem the Notes as provided under Section 3.07
or to permanently repay, redeem, repurchase or reduce any Priority
Lien Debt and other outstanding Priority Lien Obligations or any Parity
Lien Debt other than the Notes; provided that,
if the Company or any Restricted Subsidiary shall
so repay, redeem or reduce any Parity Lien Debt in
addition to the Notes, the Company or such Restricted
Subsidiary will redeem or equally and ratably repurchase (or
offer to repurchase) the Notes as provided either,
at the Company’s option, pursuant to Section 3.07,
through open-market purchases (to the extent such purchases are at a purchase price at or
above 100% of the principal amount of such Notes purchased, plus
accrued but unpaid interest, if any) or by making an offer (in accordance with the
procedures set forth below for an Asset Sale Offer (as defined below)) to all Holders
to purchase their Notes at 100% of the principal
amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes
that would otherwise be prepaid to the date of such repurchases;


 


(2)         invest
in or acquire Additional Assets; or


 


(3)         to
make capital expenditures in respect of the Company’s or
any Restricted Subsidiaries’ Oil and Gas Business.


 




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(c)         The
requirements of clause (2) or (3) of Section 4.10(b)
shall be deemed to be satisfied if a bona fide binding contract committing to make the investment, acquisition or
expenditure referred to therein is entered into by the Company (or
any Restricted Subsidiary) with a Person other
than an Affiliate of the Company within the time
period specified in such preceding paragraph and such Net Proceeds are subsequently applied
in accordance with such contract within six months following the date such agreement is entered into.


 


(d)         Pending
the final application of any Net Proceeds, the Company (or
any Restricted Subsidiary) may invest the Net Proceeds
in any manner that is not prohibited by this Indenture.


 


(e)         Any
Net Proceeds from Asset Sales that are not applied
or invested as provided in Section 4.10(b)
will constitute “Excess Proceeds.” When the aggregate amount
of Excess Proceeds exceeds $20.0 million, within five days thereof, the Company
will make an offer to all Holders and, if required by the terms of other Parity
Lien Debt, to all holders of such other Parity Lien Debt to purchase, prepay or
redeem, on a pro rata basis, the maximum principal amount of Notes and such other
Parity Lien Debt (plus all accrued interest and the amount of all fees and expenses, including
premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out
of the Excess Proceeds (an “Asset Sale Offer”). The offer price in any
Asset Sale Offer will be equal to 100% of the principal
amount, plus accrued and unpaid interest, if any, to the date of purchase, prepayment
or redemption, subject to the rights of Holders on the relevant
record date to receive interest due on the relevant interest payment date, and will be
payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company or any Restricted Subsidiary may use
those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If
the aggregate principal amount of Notes and other Parity
Lien Debt, if applicable, tendered in such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee will select the Notes and
such other Parity Lien Debt to be purchased on a pro rata basis (except that any Notes
represented by a Note in global form will be
selected by such method as DTC or its nominee or successor
may require or, where such nominee or successor is
the Trustee, a method that most nearly approximates pro rata selection as the Trustee
deems fair and appropriate), based on the principal amounts tendered (with such adjustments as may be deemed appropriate
by the Company so that only Notes in denominations
of $1,000, or an integral multiple of $1,000 in excess thereof,
will be purchased). Upon completion of each Asset Sale Offer,
the amount of Excess Proceeds will be reset at zero.


 


(f)          The
Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in
connection with each repurchase of Notes and other Parity
Lien Debt, if applicable, pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with Section 3.09
or this Section 4.10, the Company will comply
with the applicable securities laws and regulations and will not be deemed to have breached
its obligations under Section 3.09
or this Section 4.10 by virtue of such
compliance.


 


Section
4.11         Transactions with Affiliates.


 


(a)          The
Company will not, and will not permit any of its
Restricted Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets
from, or enter into or make or
amend any transaction, contract, agreement, understanding, loan, advance or Guarantee with,
or for the benefit of, any Affiliate of the Company
(each, an “Affiliate Transaction”), unless:


 




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(1)         the
Affiliate Transaction is on terms that are no less favorable to the Company
or the relevant Restricted Subsidiary than those that could have been obtained in
a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person or, if in the good faith judgment of the Company’s
Board of Directors, no comparable transaction is available with which to compare such Affiliate
Transaction, such Affiliate Transaction is otherwise fair to the Company
or the relevant Restricted Subsidiary from a financial point of view; and


 


(2)         the
Company delivers to the Trustee:


 


(a)         with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $20.0 million, an Officers’
Certificate certifying that such Affiliate Transaction or series of related Affiliate
Transactions complies with this Section 4.11; and


 


(b)         with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $40.0 million, a resolution
of the Board of Directors of the Company set forth
in an Officers’ Certificate certifying that such Affiliate
Transaction or series of related Affiliated Transactions complies with this Section
4.11 and that such Affiliate
Transaction or series of related Affiliate Transactions has been approved by either
the Conflicts Committee of the Board of Directors of the Company
(so long as the members of the Conflicts Committee approving the Affiliate Transaction or
series of related Affiliate Transactions are disinterested) or
a majority of the disinterested members of the Board of Directors of the Company,
if any.


 


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


 


(1)         any
employment agreement, employee benefit plan, officer or director indemnification agreement
or any similar arrangement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business and payments
pursuant thereto;


 


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


 


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


 


(4)         payment
of reasonable and customary fees and reimbursements of expenses (pursuant to indemnity arrangements or
otherwise) of officers, directors, employees or consultants of the Company
or any of its Restricted Subsidiaries;


 


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


 




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(6)         any
Permitted Investments or Restricted Payments that are permitted by Section 4.07;


 


(7)         transactions
between the Company or any of its Restricted Subsidiaries
and any Person that would not otherwise constitute an Affiliate
Transaction except for the fact that one director of such other Person is also a
director of the Company or such Restricted Subsidiary,
as applicable; provided that such director abstains from voting as a director of
the Company or such Restricted Subsidiary, as applicable,
on any matter involving such other Person;


 


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


 


(9)         (A)
guarantees by the Company or any of its Restricted Subsidiaries
of performance of obligations of the Company’s
Unrestricted Subsidiaries in the ordinary course of business, except for guarantees of Indebtedness
in respect of borrowed money, and (B) pledges by the Company or any Restricted
Subsidiary of the Company of Equity Interests in
Unrestricted Subsidiaries for the benefit of lenders or
other creditors of the Company’s Unrestricted
Subsidiaries;


 


(10)        any
Affiliate Transaction with a Person in its capacity
as a holder of Indebtedness or Capital Stock of the
Company or any Restricted Subsidiary of the Company
if such Person is treated no more favorably than the other holders of Indebtedness
or Capital Stock of the Company or such Restricted
Subsidiary;


 


(11)        transactions
with Unrestricted Subsidiaries, customers, clients, suppliers or
purchasers or sellers of goods or services,
or lessors or lessees of property,
in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture
which are, in the aggregate (taking into account all the costs and benefits associated with such transactions), not materially
less favorable to the Company and its Restricted Subsidiaries
than those that would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated person, in
the good faith determination of the Company’s Board
of Directors or any officer of the Company involved
in or otherwise familiar with such transaction, or are
on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;


 


(12)        in
the case of contracts for exploring for, producing, marketing, storing or otherwise handling
Hydrocarbons, or activities or
services reasonably related or ancillary thereto, or
other operational contracts, any such contracts entered into in the ordinary course of business and otherwise in compliance
with the terms of this Indenture (a) which are fair to the Company
and its Restricted Subsidiaries, in the reasonable determination of the Board
of Directors of the Company or the senior management thereof, or
are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party; and


 




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(13)        sales
of accounts receivable, or participations therein, or related
assets effected in connection with any Receivable Facility or any related transaction effected
in order to consummate a financing contemplated by a Receivables Facility.


 


Section
4.12         Liens.


 


The Company will not, and will not permit any
of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of
any kind (other than Permitted Liens) securing Indebtedness upon any of their property or assets, now owned or hereafter acquired.


 


Section
4.13         Business Activities.


 


Finance Corp. may not incur Indebtedness unless
(1) the Company is a co-issuer or guarantor of such Indebtedness or (2) the net proceeds of such Indebtedness are loaned to the
Company or its other Restricted Subsidiaries, used to acquire outstanding debt securities issued by the Company or used to repay
Indebtedness of the Company or its other Restricted Subsidiaries as permitted under Section 4.09. Finance Corp. may not
engage in any business not related directly or indirectly to obtaining money or arranging financing for the Company or its Restricted
Subsidiaries.


 


Section
4.14         Organizational Existence.


 


Subject to Article V and Section 10.04
hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect:


 


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


 


(b)          the
rights (charter and statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company
shall not be required to preserve any such right, license or franchise, or
the corporate, partnership or other existence of any of its Restricted
Subsidiaries, if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole.


 


Section
4.15         Offer to Repurchase Upon Change
of Control.


 


(a)          If
a Change of Control occurs, each Holder will have
the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000
in excess thereof) of that Holder’s Notes pursuant to a cash tender offer (“Change
of Control Offer”) on the terms set forth in this Section 4.15.
In the Change of Control Offer, the Company will offer
a payment in cash (“Change of Control Payment”) equal to 101% of
the aggregate principal amount of Notes repurchased, plus
accrued and unpaid interest, if any, on the Notes repurchased to the date of purchase
(the “Change of Control Purchase Date”), subject to the rights of Holders
of Notes on the relevant record date to receive interest due on the relevant interest payment date.


 




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Within 30 days following any Change of Control,
the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Notes properly tendered prior to the expiration date specified in the notice, which date will be no
earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by this
Section 4.15 and described in such notice. The Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with this Section 4.15, the Company will comply with the applicable securities laws and regulations
and will not be deemed to have breached its obligations under this Section 4.15 by virtue of such compliance.


 


(b)          Promptly
following the expiration of the Change of Control Offer, the Company
will, to the extent lawful, accept for payment all Notes or portions of Notes
properly tendered pursuant to the Change of Control Offer. Promptly after such acceptance,
the Company will, on the Change of Control Purchase Date:


 


(1)         deposit
with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions of Notes
accepted for payment; and


 


(2)         deliver
or cause to be delivered to the trustee the Notes
properly accepted together with an Officers’ Certificate stating the aggregate principal
amount of Notes or portions of Notes being
purchased by the Company.


 


The Paying Agent will promptly mail (but in
any case not later than five days after the Change of Control Payment Date) to each Holder of Notes properly tendered the Change
of Control Payment for such Notes (or, if all the Notes are then in global form, it will make such payment through the facilities
of DTC), and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note
equal in principal amount to any unpurchased portion of the Notes surrendered, if any. The Company will publicly announce the results
of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.


 


(c)          The
provisions described above that require the Company to make a Change
of Control Offer following a Change of Control will be applicable whether or
not any other provisions of this Indenture are applicable.


 


(d)          Notwithstanding
anything to the contrary in this Section 4.15, the Company
will not be required to make a Change of Control Offer upon a Change
of Control if (1) a third party makes the Change of Control Offer in the manner,
at the time and otherwise in compliance with the requirements set forth in this Section 4.15
applicable to a Change of Control Offer made by the Company
and purchases all Notes properly tendered and not withdrawn under the Change
of Control Offer, (2) notice of redemption of all outstanding Notes has been given
pursuant to Section 3.03, unless and until there is a default
in payment of the applicable redemption price or (3) in connection with or
in contemplation of any Change of Control, the Company
has made an offer to purchase (an “Alternate Offer”) any and all
Notes validly tendered at a cash price equal to or higher
than the Change of Control Payment and has purchased all Notes
properly tendered in accordance with the terms of such Alternate Offer.


 




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


 


(f)          In
the event that the Holders of not less than 90% in aggregate
principal amount of the outstanding Notes accept a Change of Control Offer and the
Company (or any third party making such Change
of Control Offer in lieu of the Company as described above) purchases all of the
Notes held by such Holders, the Issuers
will have the right, upon not less than 30 nor more than 60 days prior notice, given not more than 30 days following the
purchase pursuant to the Change of Control Offer described above, to redeem all of the Notes
that remain outstanding following such purchase at a redemption price equal to the
Change of Control Payment plus, to the extent not included in the Change
of Control Payment, accrued and unpaid interest, if any, on the Notes that remain
outstanding, to the date of redemption (subject to the rights of Holders of
record on the relevant record date to receive interest due on an interest payment date that is on or
prior to the redemption date).


 


Section
4.16         Additional Note Guarantees.


 


If, after the Issue Date, any Restricted Subsidiary
of the Company that is not already a Guarantor Guarantees any Indebtedness of either of the Issuers or any Guarantor incurred under
any Credit Facility, or any Domestic Subsidiary (other than a Receivables Subsidiary), if not then a Guarantor, incurs any Indebtedness
under any Credit Facility, then in either case that Subsidiary will become a Guarantor by executing a supplemental indenture substantially
in the form of Exhibit F hereto and delivering it to the Trustee within 20 business days of the date on which it Guaranteed
or incurred such Indebtedness, as the case may be. Notwithstanding the preceding, any Note Guarantee of a Restricted Subsidiary
that was incurred pursuant to this paragraph shall provide by its terms that it shall be automatically and unconditionally released
at such time as such Guarantor ceases both (a) to Guarantee any other Indebtedness of either of the Issuers and any Indebtedness
of any other Guarantor (except as a result of payment under any such other Guarantee) and (b) to be an obligor with respect to
any Indebtedness under any Credit Facility.


 


Section
4.17         Designation of Restricted and Unrestricted
Subsidiaries.


 


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


 




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Any designation of a Subsidiary of the Company
as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a Board Resolution giving effect to such
designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was
permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements
as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if
such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, the Company will be in default
of such covenant.


 


The Board of Directors of the Company may at
any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided that such designation
will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of
such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section
4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the applicable reference
period; and (2) no Default or Event of Default would be in existence following such designation.


 


Section
4.18         Covenant Termination.


 


Notwithstanding any provision of this Indenture
or of the Notes to the contrary, if at any time following the Issue Date (a) the Notes are rated Baa3 or better by Moody’s
and BBB- or better by S&P (or, if either such entity ceases to rate the Notes for reasons outside of the control of the Company,
the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization”
within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company as a replacement agency), (b) no Default or
Event of Default shall have occurred and is continuing under this Indenture and (c) the Issuers have delivered to the Trustee an
Officers’ Certificate certifying to such events, Sections 3.09, 4.07, 4.08, 4.09, 4.10,
4.11, 4.17 and 5.01(a)(4) of this Indenture will terminate and no Default or Event of Default shall result
from any failure to comply with any of the provisions of such Sections.


 


Article
V.

SUCCESSORS


 


Section
5.01         Merger, Consolidation or Sale
of Assets.


 


(a)          Neither
of the Issuers may, directly or indirectly: (1) consolidate
or merge with or into another Person
(whether or not such Issuer is the survivor),
or (2) sell, assign, transfer, convey, lease or otherwise
dispose of all or substantially all of its properties or
assets, in one or more related transactions, to another Person,
unless:


 




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(1)         either:
(A) such Issuer is the surviving Person; or
(B) the Person formed by or surviving any
such consolidation or merger (if other than such Issuer)
or to which such sale, assignment, transfer, conveyance, lease or
other disposition has been made (the “Surviving Entity”) is a
Person organized or existing under the laws of the United States, any state of the United
States or the District of Columbia; provided,
however, that Finance Corp. may not consolidate or merge with or
into any Person other than a corporation satisfying such requirement so long as the
Company is not a corporation;


 


(2)         the
Surviving Entity assumes all the obligations of such
Issuer under the Notes and this Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;


 


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


 


(4)         in
the case of a transaction involving the Company and not Finance Corp., either (A) immediately after
giving effect to such transaction and any related financing transaction on a pro forma basis as if the same had occurred
at the beginning of the applicable four-quarter period, either (1) the Company or the Surviving
Entity would be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) or
(2) the Fixed Charge Coverage Ratio of the Company
or the Person formed by or surviving any such
consolidation or merger (if other than the Company),
or to which such sale, assignment, transfer, conveyance, lease or
other disposition has been made, is equal to or greater than the Fixed
Charge Coverage Ratio of the Company immediately prior to such transaction or
(B) immediately after giving effect to such transaction on a pro forma basis, the
Consolidated Net Worth of the Company would be greater
than the Consolidated Net Worth of the Company immediately
prior to such transaction;


 


(5)         the
Surviving Entity shall take such action (or agree
to take such action) as may be reasonably necessary to cause any property or assets that
constitute Collateral owned by or transferred to
the Surviving Entity to be subject to the Parity Liens in
the manner and to the extent required under the Note Documents and shall deliver an opinion
of counsel as to the enforceability of any amendments, supplements or other instruments
with respect to the Note Documents to be executed, delivered, filed and recorded, as applicable,
and such other matters as the Trustee or Collateral Trustee, as applicable, may reasonably
request; and


 


(6)         such
Issuer has delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation, merger
or disposition and such supplemental indenture, if
any, comply with this Indenture.


 


(b)          Notwithstanding
the restrictions described in Section 5.01(a)(4), any Restricted
Subsidiary (other than Finance Corp.) may consolidate with, merge into or dispose
of all or part of its properties or assets to the
Company, and the Company will not be required to
comply with Section 5.01(a)(5) in connection
with any such consolidation, merger or disposition


 




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(c)          Notwithstanding
Section 5.01(a), the Company may reorganize
as any other form of entity in accordance with the following procedures provided that:


 


(1)         the
reorganization involves the conversion (by merger, sale, contribution or exchange of assets
or otherwise) of the Company into a form of entity
other than a limited liability company formed under Delaware law;


 


(2)         the
entity so formed by or resulting from such reorganization is an entity organized or
existing under the laws of the United States, any state thereof or the District of
Columbia;


 


(3)         the
entity so formed by or resulting from such reorganization assumes all the obligations
of the Company under the Notes and this Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;


 


(4)         immediately
after such reorganization no Default (other than a Reporting
Default) or Event of Default exists; and


 


(5)         such
reorganization is not materially adverse to the Holders or Beneficial Owners of the Notes
(for purposes of this clause (5) a reorganization will
not be considered materially adverse to the Holders or Beneficial Owners of the Notes
solely because the successor or survivor of such reorganization (A) is subject to
federal or state income taxation as an entity or (B)
is considered to be an “includible corporation” of an affiliated group of corporations within the meaning of Section
1504(b) of the Code or any similar state or local
law).


 


(d)          For
purposes of this Section 5.01, 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 of the Company,
the Capital Stock of which constitutes all or substantially
all of the properties or assets of the Company, shall
be deemed to be the transfer of all or substantially all of the properties or
assets of the Company.


 


Section
5.02         Successor Issuer Substituted.


 


Upon any consolidation or merger, or any sale,
assignment, transfer, conveyance, lease or other disposition of all or substantially all of the properties or assets of an Issuer
in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the Surviving Entity
shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer,
lease, conveyance or other disposition, the provisions of this Indenture referring to an “Issuer” shall refer instead
to the successor Person and not to the predecessor Issuer), and may exercise every right and power of such Issuer under this Indenture
with the same effect as if such successor Person had been named as the predecessor Issuer herein; provided, however,
that the predecessor Issuer shall not be relieved from the obligation to pay the principal of, or premium or interest, if any,
on, the Notes in the case of a lease of all or substantially all of such Issuer’s properties or assets in a transaction that
is subject to, and that complies with the provisions of, Section 5.01 hereof.


 




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Article
VI.

DEFAULTS AND REMEDIES


 


Section
6.01         Events of Default.


 


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


 


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


 


(b)          default
in the payment when due (at Stated Maturity, upon redemption or
otherwise) of the principal of, or premium, if any, on, the Notes;


 


(c)          failure
by the Issuers to comply with the provisions of Section 3.09,
4.10, 4.15 or 5.01 hereof;


 


(d)          failure
by the Company for 120 days after notice to the Company
by the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes then outstanding to comply with Section
4.03;


 


(e)          failure
by the Issuers for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding to comply with any of their other agreements in this Indenture;


 


(f)          default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness
for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company
or any of its Restricted Subsidiaries), whether such Indebtedness
or Guarantee now exists, or is created after the Issue Date, if that default:


 


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


 


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


 


and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $15.0 million or more; provided,
however, if, prior to any acceleration of the Notes, (i)
any such Payment Default is cured or waived,
(ii) any such acceleration is rescinded, or (iii) such Indebtedness
is repaid during the 60 day period commencing upon the end of any applicable grace period for such Payment
Default or the occurrence of such acceleration, as the case may be, any Default or Event
of Default (but not any acceleration of the Notes)
caused by such Payment Default or acceleration shall be automatically rescinded, so long
as such rescission does not conflict with any judgment, decree or applicable law;


 




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(g)          failure
by the Company or any of its Restricted Subsidiaries to
pay final judgments entered by a court or courts of competent jurisdiction aggregating in
excess of $15.0 million (to the extent not covered by insurance by a reputable and creditworthy
insurer as to which the insurer has not disclaimed coverage), which judgments are not paid, discharged or
stayed, for a period of 60 days;


 


(h)          the
Company, Finance Corp. or any of the Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary pursuant to or
within the meaning of Bankruptcy Law:


 


(1)         commences
a voluntary case,


 


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


 


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


 


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


 


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


 


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


 


(1)         is
for relief against the Company, Finance Corp. or any of the Company’s Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute
a Significant Subsidiary in an involuntary case;


 


(2)         appoints
a custodian of the Company, Finance Corp. or any of the
Company’s Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company
that, taken together, would constitute a Significant Subsidiary or for all or substantially
all of the property of the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary
or any group of Restricted Subsidiaries of the Company
that, taken together, would constitute a Significant Subsidiary; or


 


(3)         orders
the liquidation of the Company, Finance Corp. or any of the Company’s Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute
a Significant Subsidiary,


 


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


 


(j)          except
as permitted by this Indenture, any Note Guarantee is
held in any judicial proceeding to be unenforceable or invalid or
ceases for any reason to be in full force and effect, or any Guarantor,
or any Person acting on behalf of any Guarantor,
denies or disaffirms its obligations under its Note
Guarantee, except, in each case, by reason of the release of such Note Guarantee in
accordance with this Indenture; and


 




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(k)          the
occurrence of the following:


 


(1)         except
as permitted by the Note Documents, any Note Document establishing
the Parity Liens ceases for any reason to be fully enforceable; provided
that it will not be an Event of Default
under this Section 6.01(k)(1) if the
sole result of the failure of one or more Note Documents
to be fully enforceable is that any Parity Lien purported to be granted under such
Note Document on Collateral, individually or
in the aggregate, having a Fair Market Value of not more than $15.0
million, ceases to be an enforceable and perfected Parity Lien; provided,
further, that if such failure is susceptible to cure, no Event of Default
shall arise with respect thereto until 45 days after any Officer of the Company
or any of its Restricted Subsidiaries becomes aware of such failure, which failure
has not been cured during such time period;


 


(2)         except
as permitted by the Note Documents, any Parity Lien purported
to be granted under any Note Document on Collateral,
individually or in the aggregate, having a Fair Market Value
in excess of $15.0 million, ceases to be an enforceable and perfected second priority
Lien, subject to the Intercreditor Agreement and Permitted
Collateral Liens; provided that if such failure is susceptible to cure, no
Event of Default shall arise with respect thereto
until 45 days after any Officer of the Company or any
Restricted Subsidiary becomes aware of such failure, which failure has not been cured during
such time period; and


 


(3)         the
Company or any other Grantor, or
any Person acting on behalf of any of them, denies or
disaffirms, in writing, any obligation of the Company or any other Grantor
set forth in or arising under any Note Document establishing
Parity Liens (other than the obligations under any
Note Document of any Guarantor that has been released
of its obligations under such Note Document in accordance
with the terms thereof).


 


Section
6.02         Acceleration.


 


In the case of an Event of Default specified
in clause (h) or (i) of Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary of the Company that
is a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event
of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding
Notes may declare all the Notes to be due and payable immediately.


 


Upon any such declaration, the Notes shall become
due and payable immediately.


 


The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Company and the Trustee may, on behalf of all of the Holders of all
the Notes, rescind an acceleration and its consequences hereunder, if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal of, or premium or interest, if any, on the Notes that has
become due solely because of the acceleration) have been cured or waived.


 




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Section
6.03         Other Remedies.


 


If an Event of Default occurs and is continuing,
the Trustee may pursue any available remedy to collect the payment of principal of, or premium or interest, if any, on, the Notes
or to enforce the performance of any provision of the Notes or this Indenture.


 


The Trustee may maintain a proceeding even if
it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any
Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute
a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.


 


Section
6.04         Waiver of Past Defaults.


 


The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes, waive
any existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the
payment of principal of, or premium or interest, if any, on, the Notes (including in connection with an offer to purchase). Upon
any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent
thereon.


 


Section
6.05         Control by Majority.


 


Holders of a majority in aggregate principal
amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders
or that may involve the Trustee in personal liability.


 


Section
6.06         Limitation on Suits.


 


No Holder of a Note may pursue any remedy with
respect to this Indenture or the Notes unless:


 


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


 


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


 


(c)          such
Holder or Holders offer and, if requested, provide to the Trustee
security or indemnity reasonably satisfactory to the Trustee
against any loss, liability or expense;


 




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(d)          the
Trustee does not comply with such request within 60 days after receipt of the request and
the offer of security or indemnity; and


 


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


 


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


 


Section
6.07         Rights of Holders of Notes
to Receive Payment.


 


Notwithstanding any other provision of this
Indenture, the right of any Holder of a Note to receive payment of principal of, or premium or interest, if any, on, the Note,
on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent
of such Holder.


 


Section
6.08         Collection Suit by Trustee.


 


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


 


Section
6.09         Trustee May File Proofs of Claim.


 


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


 




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Section
6.10         Priorities.


 


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


 


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


 


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


 


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


 


The Trustee may fix a record date and payment
date for any payment to Holders of the Notes pursuant to this Section 6.10.


 


Section
6.11         Undertaking for Costs.


 


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


 


Article
VII.

TRUSTEE


 


Section
7.01         Duties of Trustee.


 


(a)          If
an Event of Default has occurred and is continuing,
the Trustee will exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in its exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.


 


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


 


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


 




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(ii)         in
the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee will examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not confirm or investigate
the mathematical calculations or other facts stated therein).


 


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


 


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


 


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


 


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


 


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


 


(e)          No
provision of this Indenture will require the Trustee to
expend or risk its own funds or incur any liability.
The Trustee will be under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such
Holder has offered to the Trustee security and indemnity
reasonably satisfactory to it against any loss, liability or expense.


 


(f)          The
Trustee will not be liable for interest on any money received by it except as the Trustee
may agree in writing with the Issuers. Money held in trust by the Trustee
need not be segregated from other funds except to the extent required by law.


 


Section
7.02         Rights of Trustee.


 


(a)          The
Trustee may conclusively rely, and will be protected in acting or refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in any such resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document.


 




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(b)          Before
the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both, in each
case that conforms to Section 12.05. The Trustee will not be liable for any action it takes
or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.


 


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


 


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


 


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


 


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


 


(g)          The
Trustee shall not be deemed to have notice of a Default
or an Event of Default except (i) a Default under
Section 6.01(a) or (b) so long as the Trustee is the Paying Agent with respect to the Notes, or (ii) any Default or Event of Default
of which the Trustee shall have received written notification or a Responsible Officer of the Trustee
who is charged with administration of this Indenture has actual knowledge of such Default
or Event of Default but such actual knowledge shall not include receipt of information obtained
in any report or other documents furnished under Section 4.03 of this Indenture, which reports and documents the Trustee shall
have no duty to examine.


 


(h)          No
provision of this Indenture will require the Trustee to expend or risk its own funds or otherwise incur any financial liability
in the performance of its duties hereunder, or in the exercise of its rights or powers, unless it is offered reasonable security
or indemnity against any loss, liability or expense.


 


Section
7.03         Individual Rights of Trustee.


 


The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the Issuers or any Affiliate of the Issuers with the same
rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as defined
in the TIA) after a Default has occurred and is continuing it must eliminate such conflict within 90 days or resign. Any Agent
may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.


 




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Section
7.04         Trustee’s Disclaimer.


 


The Trustee will not be responsible for and
makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’
use of the proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction under any provision of
this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the
Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.


 


Section
7.05         Notice of Defaults.


 


If a Default or Event of Default occurs and
is continuing and if it is known to the Trustee, the Trustee will mail to Holders of the Notes a notice of the Default or Event
of Default within 90 days after it occurs, unless the Default has been cured. Except in the case of a Default or Event of Default
in payment of principal of, or premium or interest, if any, on, any Note, the Trustee may withhold the notice if and so long as
a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders
of the Notes.


 


Section
7.06         Reports by Trustee to Holders
of the Notes.


 


(a)          Within
60 days after each May 1 beginning with May 1, 2016, and for so long as Notes remain outstanding,
the Trustee will mail to the Holders of the Notes
a brief report dated as of such reporting date that complies with TIA §313(a)
(but if no event described in TIA §313(a) has occurred within the twelve months preceding
the reporting date, no report need be transmitted). The Trustee also will
comply with TIA §313(b)(2). The Trustee will
also transmit by mail all reports as required by TIA §313(c).


 


(b)          A
copy of each report at the time of its mailing to the Holders will be mailed by the Trustee
to the Issuers and filed by the Trustee with
the SEC and each stock exchange, if any, upon which the Notes
are listed. The Issuers will promptly notify the Trustee
when the Notes are listed on any stock exchange.


 


Section
7.07         Compensation and Indemnity.


 


(a)          The
Issuers will pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services hereunder. The
Trustee’s compensation will not be limited
by any law on compensation of a trustee of an express trust. The Issuers
will reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for its services.
Such expenses will include the reasonable compensation, disbursements and expenses of the
Trustee’s agents and counsel.


 


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


 




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


 


(d)          To
secure the Issuers’ and the Guarantors’
payment obligations in this Section 7.07,
the Trustee will have a Lien prior to the Notes
on all money or property held or collected
by the Trustee, except that held in trust to pay principal
of, or premium or interest, if any, on, particular Notes. Such Lien
will survive the satisfaction and discharge of this Indenture.


 


(e)          When
the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(h)
or (i) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under any Bankruptcy
Law.


 


Section
7.08         Replacement of Trustee.


 


(a)          A
resignation or removal of the Trustee and appointment
of a successor Trustee will become effective only upon the successor Trustee’s
acceptance of appointment as provided in this Section 7.08.


 


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


 


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


 


(ii)         the
Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any Bankruptcy
Law;


 


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


 


(iv)        the
Trustee becomes incapable of acting.


 


(c)          If
the Trustee resigns or is removed or
if a vacancy exists in the office of Trustee for any reason, the Issuers
will promptly appoint a successor Trustee. Within one year after the successor Trustee
takes office, the Holders of a majority in aggregate principal amount of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Issuers.


 




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


 


(e)          If
the Trustee, after written request by any Holder who
has been a Holder for at least six months, fails to comply with Section 7.10
hereof, such Holder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.


 


(f)          A
successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee
and to the Issuers. Thereupon, the resignation or
removal of the retiring Trustee will become effective, and the successor Trustee
will have all the rights, powers and duties of the Trustee under this Indenture.
The successor Trustee will mail a notice of its succession to Holders.
The retiring Trustee will promptly transfer all property
held by it as Trustee to the successor Trustee;
provided all sums owing to the Trustee hereunder
have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Issuers’ obligations under Section 7.07
hereof will continue for the benefit of the retiring Trustee.


 


Section
7.09         Successor Trustee by Merger,
etc.


 


If the Trustee consolidates, merges or converts
into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association,
the successor corporation or national banking association without any further act will be the successor Trustee.


 


Section
7.10         Eligibility; Disqualification.


 


There will at all times be a Trustee hereunder
that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that
is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published
annual report of condition.


 


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


 


Section
7.11         Preferential Collection of Claims Against Issuers.


 


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


 


Section
7.12         Trustee in Other Capacities.


 


References to the Trustee in Sections 7.01,
7.02, 7.03, 7.04, 7.07 and 7.08 shall be understood to include the Trustee when acting in other capacities under the Note Documents,
including, without limitation, as Collateral Trustee and Paying Agent. Without limiting the foregoing, and for the avoidance of
doubt, such Sections shall be read to apply to the Collateral Trustee and the Security Documents, mutatis mutandis, in addition
to this Indenture. The privileges, rights, indemnities and exculpatory provisions contained in this Indenture shall apply to the
Trustee, wherever it is acting in any capacity under the Note Documents.


 




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Article
VIII.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE


 


Section
8.01         Option to Effect Legal Defeasance or
Covenant Defeasance.


 


The Issuers may at any time, at the option of
their respective Boards of Directors evidenced by a resolution set forth in an Officers’ Certificate, elect to have either
Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below
in this Article VIII.


 


Section
8.02         Legal Defeasance and Discharge.


 


Upon the Issuers’ exercise under Section
8.01 hereof of the option applicable to this Section 8.02, the Issuers and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations
with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied
(hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuers and the Guarantors
will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees),
which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (a) and (b) below, and to have satisfied all their other obligations under such
Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged
hereunder:


 


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


 


(b)          the
Issuers’ obligations with respect to such Notes
under Article II and Section 4.02
hereof;


 


(c)          the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers’
and the Guarantors’ obligations in connection
therewith; and


 


(d)          this
Article VIII.


 


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


 




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Section
8.03         Covenant Defeasance.


 


Upon the Issuers’ exercise under Section
8.01 hereof of the option applicable to this Section 8.03, the Issuers and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their respective obligations under
the covenants contained in Sections 3.09, 4.03, 4.05, 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.14 (as it relates to any Restricted Subsidiary of the Company), 4.15, 4.16,
and 4.17 hereof and clause (4) of Section 5.01(a) hereof with respect to the outstanding Notes on and after the date
the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and
the Notes will 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 will continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes to
the extent permitted by GAAP). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note
Guarantees, the Issuers and the Guarantors may omit to comply with and will 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 will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Issuers’
exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof, Section 6.01(c), (d), (e), (f), (g)
and (j) hereof will not constitute Events of Default.


 


Section
8.04         Conditions to Legal or Covenant
Defeasance.


 


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


 


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


 


(b)          in
the case of an election under Section 8.02 hereof,
the Issuers must deliver to the Trustee an Opinion
of Counsel reasonably acceptable to the Trustee confirming that:


 


(i)          the
Issuers have received from, or there has been published
by, the Internal Revenue Service a ruling; or


 




    	 	100	 



     


    

 


(ii)         since
the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel will confirm that, the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes as
a result of such Legal Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;


 


(c)          in
the case of an election under Section 8.03 hereof,
the Issuers must deliver to the Trustee an Opinion
of Counsel reasonably acceptable to the Trustee confirming that the Holders
of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not occurred;


 


(d)          no
Default or Event of Default has occurred and is continuing
on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other
Indebtedness), and the granting of Liens to secure
such borrowings);


 


(e)          such
Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under,
any material agreement or instrument (other than this Indenture
and the agreements governing any other Indebtedness being defeased, discharged or
replaced) to which the Company or any of its Subsidiaries
is a party or by which the Company or any
of its Subsidiaries is bound;


 


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


 


(g)          the
Issuers must deliver to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.


 


Section
8.05         Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.


 


Subject to Section 8.06 hereof, all money
and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof
in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent)
as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, or
premium or interest, if any, but such money need not be segregated from other funds except to the extent required by law.


 


The Issuers will pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant
to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the outstanding Notes.


 




    	 	101	 



     


    

 


Notwithstanding anything in this Article
VIII to the contrary, the Trustee will deliver or pay to the Issuers from time to time upon the request of the Issuers any
money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which
may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.


 


Section
8.06         Repayment to Issuers.


 


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


 


Section
8.07         Reinstatement.


 


If the Trustee or Paying Agent is unable to
apply any U.S. dollars or non-callable Government Securities in accordance with Sections 8.02 or 8.03 hereof, as
the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Issuers’ and the Guarantors’ obligations under this Indenture and the Notes
and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Sections 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Sections 8.02
or 8.03 hereof, as the case may be; provided, however, that, if the Issuers make any payment of principal
of, or premium or interest, if any, on, any Note following the reinstatement of its obligations, the Issuers will be subrogated
to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.


 




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Article
IX.

AMENDMENT, SUPPLEMENT AND WAIVER


 


Section
9.01         Without Consent of Holders of
Notes.


 


Notwithstanding Section 9.02 of this Indenture,
without the consent of any Holder of Notes, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture,
the Notes and the Note Guarantees:


 


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


 


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


 


(c)          to
provide for the assumption of the Issuers’ or a
Guarantor’s obligations to Holders
of the Notes and Note Guarantees in the case
of a merger or consolidation or sale of all or
substantially all of the Issuers’ or such
Guarantor’s properties or assets, as applicable;


 


(d)          to
make any change that would provide any additional rights or benefits to the Holders
of the Notes or that does not adversely affect the legal rights under this Indenture
of any Holder;


 


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


 


(f)          to
conform the text of the Note Documents to any provision of the “Description of Notes”
section of the Issuers’ Offering Memorandum dated January 8, 2016, relating to the
initial offering of the Notes in connection with an exchange offer for the Existing Unsecured Notes;


 


(g)          to
conform the text of the Note Documents or any other such documents (in recordable form)
as may be necessary or advisable to preserve and confirm the relative priorities of the
Priority Lien Documents and the Parity Lien Documents as
such priorities are contemplated by and set forth in the Intercreditor Agreement;


 


(h)           to
provide for the issuance of Additional Notes in accordance with the limitations set forth
in this Indenture as of the Issue Date;


 


(i)           to
add any additional Guarantor or to evidence the release of any Guarantor
from its Note Guarantee, in each case as provided
in this Indenture;


 


(j)           to
evidence or provide for the acceptance of appointment under this Indenture
of a successor Trustee;


 


(k)          to
make, complete or confirm any grant of Collateral permitted
or required by any of the Note Documents;


 




    	 	103	 



     


    

 


(l)           to
release, discharge, terminate or subordinate Liens on
Collateral in accordance with the Note Documents and
to confirm and evidence any such release, discharge, termination or subordination; or


 


(m)          with
respect to the Note Documents, as provided in the
Intercreditor Agreement and the Collateral Trust Agreement.


 


Upon the request of the Company, and upon receipt
by the Trustee of the documents described in Section 9.06 hereof, the Trustee will join with the Issuers and the Guarantors
in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Section 9.01 and
to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated
to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or
otherwise.


 


Section
9.02         With Consent of Holders of
Notes.


 


Except as provided below in this Section
9.02, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture (including, without limitation, Sections
3.09, 4.10 and 4.15 hereof) and the other Note Documents with the consent of the Holders of a majority in aggregate
principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class
(including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, or premium or interest, if any, on, the Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes or the
Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding
Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), in each case in addition to any required
consent of holders of other Parity Lien Obligations required with respect to any amendment or waiver under any Note Document. Section
2.08 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02.
However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):


 


(a)          reduce
the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;


 


(b)          reduce
the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption or
repurchase of the Notes (other than provisions under Section 3.09,
4.10 or 4.15);


 


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


 


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


 




    	 	104	 



     


    

 


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


 


(f)          make
any change in the provisions of this Indenture relating to waivers of past Defaults
or the rights of Holders of the Notes to receive
payments of principal of, or premium or interest, if any, on, the Notes
(other than as permitted in clause (g) below);


 


(g)          waive
a redemption or repurchase payment with respect to any Note
(other than a payment required by Section 3.09, 4.10 or
4.15);


 


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


 


(i)          make
any change in the preceding amendment, supplement and waiver provisions;


 


(j)          make
any change to the ranking or modify the ranking of the Notes
or Note Guarantees that would adversely affect the Holders; or


 


(k)          make
any change to the consent of Holders of Notes required to release the Liens
for the benefit of the Holders on all, substantially all or any part of the Collateral,
other than in accordance with the Note Documents.         


 


In addition, any amendment to, or waiver of,
the provisions of this Indenture or any Security Document that has the effect of releasing all or substantially all of the Collateral
from the Liens securing the Notes (other than in accordance with the Note Documents) will require the consent of the Holders of
at least 66-2/3% in aggregate principal amount of the Notes then outstanding. Further, the Security Documents may be amended automatically
without the consent of Holders of Notes, the Trustee or the Collateral Trustee in connection with any amendments to corresponding
security documents creating Priority Liens. The Trustee and the Collateral Trustee shall be entitled to rely upon an Officers’
Certificate and/or an Opinion of Counsel certifying that such Parity Lien Obligations or Priority Lien Obligations, as the case
may be, were issued or borrowed in compliance with the Credit Agreement, this Indenture, the Intercreditor Agreement and the Security
Documents.


 


Upon the request of the Issuers accompanied
by a resolution of their respective Boards of Directors authorizing the execution of any such amended or supplemental indenture,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of the Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee will join with the Issuers
and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but will not be obligated to, enter into such amended or supplemental indenture.


 




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The consent of the Holders
is not necessary under this Section 9.02 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, supplement or waiver under this Indenture
requiring the approval of the Holders becomes effective, the Company
will mail to the Holders a notice briefly describing the amendment, supplement or
waiver. However, the failure to give such notice, or any defect in the notice, will
not impair or affect the validity of the amendment, supplement or
waiver.


 


Section
9.03         [Reserved.]


 


Section
9.04         Revocation and Effect of Consents.


 


Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note
if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.


 


Section
9.05         Notation on or Exchange of
Notes.


 


The Trustee may place an appropriate notation
about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuers in exchange for all Notes may issue
and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or
waiver.


 


Failure to make the appropriate notation or
issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.


 


Section
9.06         Trustee to Sign Amendments, etc.


 


The Trustee will sign any amended or supplemental
indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. In executing any amended or supplemental indenture, the Trustee will be entitled to receive
and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.


 


Article
X.

NOTE GUARANTEES


 


Section
10.01         Guarantee.


 


(a)          Subject
to this Article X, each of the Guarantors hereby,
jointly and severally, unconditionally Guarantees to each Holder
of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the
obligations of the Issuers hereunder or
thereunder, that:


 




    	 	106	 



     


    

 


(i)          the
principal of, or premium or interest, if any, on, the Notes will be promptly paid
in full when due, whether at stated maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of, or premium or interest, if any, on,
the Notes, if lawful, and all other obligations of
the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the terms hereof and thereof; and


 


(ii)         in
case of any extension of time of payment or renewal of any Notes
or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity,
by acceleration or otherwise.


 


Failing payment when due of any amount so Guaranteed
or any performance so Guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a Guarantee of payment and not a Guarantee of collection.


 


(b)          The
Guarantors hereby agree that their obligations hereunder
are unconditional, irrespective of the validity, regularity or enforceability of the Notes
or this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the Issuers,
any action to enforce the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Issuers,
any right to require a proceeding first against the Issuers, protest, notice and all demands
whatsoever and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and
this Indenture.


 


(c)          If
any Holder or the Trustee is required by any court
or otherwise to return to the Issuers, the Guarantors
or any custodian, trustee, liquidator or
other similar official acting in relation to either the Issuers or the Guarantors,
any amount paid by any of them to the Trustee or such Holder,
this Note Guarantee, to the extent theretofore discharged, will
be reinstated in full force and effect.


 


(d)          Each
Guarantor agrees that it will not be entitled to
any right of subrogation in relation to the Holders in respect of any obligations
Guaranteed hereby until payment in full of all obligations Guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors,
on the one hand, and the Holders and the Trustee,
on the other hand, (i) the maturity of the obligations Guaranteed hereby may be accelerated
as provided in Article VI
hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
Guaranteed hereby, and (ii) in the event of any declaration of acceleration of such obligations
as provided in Article VI
hereof, such obligations (whether or not due
and payable) will forthwith become due and payable by the Guarantors
for the purpose of this Note Guarantee. The Guarantors
will have the right to seek contribution from any non-paying Guarantor so long as
the exercise of such right does not impair the rights of the Holders under the Note
Guarantee.


 




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Section
10.02         Limitation on Guarantor Liability.


 


Each Guarantor and, by its acceptance of Notes,
each Holder hereby confirm that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute
a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention,
the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to
the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article
X, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.


 


Section
10.03         Execution and Delivery of Note
Guarantee.


 


To evidence its Note Guarantee set forth in
Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached
as Exhibit E hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee
and that this Indenture, or a supplement thereto, will be executed on behalf of such Guarantor by one of its Officers.


 


Each Guarantor hereby agrees that its Note Guarantee
set forth in Section 10.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note
a notation of such Note Guarantee.


 


If an Officer whose signature is on the notation
of its Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which such notation of its
Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.


 


The delivery of any Note by the Trustee, after
the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf
of the Guarantors.


 


In the event that the Company or any of its
Restricted Subsidiaries creates or acquires any Restricted Subsidiary after the Issue Date, if required by Section 4.16
hereof, the Company will cause such Restricted Subsidiary to comply with the provisions of Section 4.16 hereof and this
Article X, to the extent applicable.


 


Section
10.04         Guarantors May Consolidate,
etc., on Certain Terms.


 


No Guarantor may sell or otherwise dispose of,
in one or more related transactions, all or substantially all of its properties or assets to, or consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless:


 




    	 	108	 



     


    

 


(a)          immediately
after giving effect to such transaction or series of transactions, no Default or Event of
Default exists;


 


(b)          either:


 


(i)          the
Person acquiring the properties or assets in any
such sale or other disposition or the Person
formed by or surviving any such consolidation or
merger (if other than the Guarantor) unconditionally assumes all the obligations
of that Guarantor under its Note Guarantee and
this Indenture pursuant to a supplemental indenture in
form reasonably satisfactory to the Trustee; or


 


(ii)         such
transaction or series of transactions does not violate Section 4.10
hereof; and


 


(c)          if
the Person formed by or surviving any such consolidation or
merger, if applicable, is a Restricted Subsidiary of the Company,
then such Person shall take such action (or agree
to take such action) as may be necessary to cause any property or assets that constitute
Collateral owned by or transferred to such Person
to be subject to the Parity Liens in the manner and to the extent required under
the Note Documents and shall deliver an opinion of counsel
as to the enforceability of any amendments, supplements or other instruments with
respect to the Note Documents to be executed, delivered, filed and recorded, as applicable,
and such other matters as the Trustee or Collateral Trustee, as applicable, may reasonably
request.


 


In case of any such consolidation, merger, sale
or other disposition and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Note Guarantee of the Guarantor and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person will succeed to and
be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon
may cause to be signed any or all of the notations of Note Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Issuers and delivered to the Trustee. All the Note Guarantees so issued will in all
respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution
hereof.


 


Section
10.05         Releases.


 


The Note Guarantee of a Guarantor shall be released:


 


(a)          
in connection with any sale or other disposition of all or
substantially all of the properties or assets of that Guarantor,
by way of merger, consolidation or otherwise, to a Person
that is not (either before or after giving effect to such transaction) the Company
or a Restricted Subsidiary of the Company,
if the sale or other disposition does not violate Section 4.10
hereof;


 




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(b)          in
connection with any sale or other disposition of Capital
Stock of that Guarantor to a Person that is
not (either before or after giving effect to such transaction) the Company
or a Restricted Subsidiary of the Company,
if the sale or other disposition does not violate Section 4.10
hereof and such Guarantor ceases to be a Restricted
Subsidiary of the Company as a result of the sale or
other disposition;


 


(c)          upon
designation of any Restricted Subsidiary that is a Guarantor
as an Unrestricted Subsidiary in accordance with the terms of this Indenture;


 


(d)          upon
Legal Defeasance or Covenant Defeasance in accordance with Article VIII
hereof or satisfaction and discharge of this Indenture
in accordance with Article XI hereof;


 


(e)          upon
the liquidation or dissolution of such Guarantor provided
no Default or Event of Default has occurred
that is continuing;


 


(f)          at
such time as such Guarantor ceases both (a) to Guarantee
any other Indebtedness of either of the Issuers and
any Indebtedness of any other Guarantor (except as
a result of payment under any such other Guarantee) and (b) to be an obligor
with respect to any Indebtedness under any Credit
Facility; or


 


(g)          upon
such Guarantor consolidating with, merging into or transferring
all of its properties or assets to either of the Issuers
or another Guarantor, and as a result of, or in
connection with, such transaction such Guarantor dissolving or
otherwise ceasing to exist.


 


Any Guarantor not released from its obligations
under its Note Guarantee as provided in this Section 10.05 will remain liable for the full amount of principal of, or premium
or interest, if any, on, the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article
X.


 


Article
XI.

SATISFACTION AND DISCHARGE


 


Section
11.01         Satisfaction and Discharge.


 


This Indenture will be discharged and will cease
to be of further effect as to all Notes issued hereunder (except as to surviving rights of registration of transfer or exchange
of the Notes and as otherwise specified in this Article XI), when:


 


(a)          either:


 


(1)         all
Notes that have been authenticated, except lost, stolen or
destroyed Notes that have been replaced or paid
and Notes for whose payment money has been deposited in trust and thereafter repaid to the
Issuers, have been delivered to the Trustee for cancellation;
or


 




    	 	110	 



     


    

 


(2)         all
Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the mailing of a notice of redemption or
otherwise or will become due and payable within one year and either an Issuer
or any Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or
a combination thereof, in such amounts as will be sufficient, without consideration
of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes
not delivered to the Trustee for cancellation for principal, or
premium, if any, or interest, if any, to the date of Stated
Maturity or redemption;


 


(b)          in
respect of subclause (2) of clause (a) of this Section
11.01, no Event of Default
has occurred and is continuing on the date of the deposit (other than an Event
of Default resulting from the borrowing of funds to be applied to such deposit and
any similar deposit relating to other Indebtedness and, in each case, the granting of Liens
to secure such borrowings) and the deposit will not result in a breach or
violation of, or constitute a default under,
any other instrument to which either Issuer or any Guarantor
is a party or by which either Issuer or any
Guarantor is bound (other than with respect to the borrowing of funds to be applied concurrently
to make the deposit required to effect such satisfaction and discharge and any similar concurrent deposit relating to other Indebtedness,
and in each case the granting of Liens to secure such borrowings);


 


(c)          the
Issuers have paid or caused to be paid all other
sums payable by the Issuers under this Indenture;
and


 


(d)          the
Issuers have delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of the Notes at Stated
Maturity or on the redemption date, as the case may be.


 


In addition, the Issuers must deliver an Officers’
Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been
satisfied.


 


Notwithstanding the satisfaction and discharge
of this Indenture, if funds have been deposited with the Trustee pursuant to subclause (2) of clause (a) of this Section 11.01,
the provisions of Section 11.02 and Section 8.06 hereof will survive. In addition, nothing in this Section 11.01
will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and
discharge of this Indenture.


 


Section
11.02         Application of Trust Money.


 


Subject to the provisions of Section 8.06
hereof, all funds deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it,
in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal,
or premium, if any, or interest, if any, for whose payment such money has been deposited with the Trustee; but such funds need
not be segregated from other funds except to the extent required by law.


 


If the Trustee or Paying Agent is unable to
apply any money or Government Securities in accordance with Section 11.01 hereof by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application,
the Issuers’ and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Issuers have made any payment
of principal of, or premium or interest, if any, on, any Notes because of the reinstatement of their obligations, the Issuers shall
be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by
the Trustee or Paying Agent.


 




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Article
XII.

MISCELLANEOUS


 


Section
12.01         [Reserved.]


 


Section
12.02         Notices.


 


Any notice or communication by the Issuers,
any Guarantor or the Trustee to the others is duly given if in writing in the English language and delivered in Person or by first
class mail (registered or certified, return receipt requested), electronic image scan, facsimile transmission or overnight air
courier guaranteeing next day delivery, to the others’ address:


 


If to any of the Issuers and the Guarantors:


 


Vanguard Natural Resources LLC


5847 San Felipe, Suite 3000


Houston, TX 77057


Facsimile No.: (832) 327-2260


Attention: Chief Financial Officer


 


with a copy (which shall not constitute notice)
to:


 


Paul Hastings LLP


600 Travis Street, Fifty-Eighth Floor


Houston, TX 77002


Facsimile No.: (713) 353-2574


Attention: Lindsay R. Sparks and Douglas V.
Getten


 


If to the Trustee:


 


U.S. Bank National Association


5555 San Felipe Street, Suite 1150


Houston, TX 77056


Facsimile No.: (713) 235-9213


Attention: Corporate Trust Services


 


with a copy (which shall not constitute notice)
to:


 


Thompson & Knight LLP


333 Clay Street, Suite 3300


Houston, TX 77002


Facsimile No.: (832) 397-8012


Attention: Cassandra G. Mott


 




    	 	112	 



     


    

 


The Issuers, any Guarantor or the Trustee, by
notice to the others, may designate additional or different addresses for subsequent notices or communications.


 


All notices and communications (other than those
sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by electronic image
scan or facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.


 


Any notice or communication to a Holder will
be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next
day delivery to its address shown on the Register kept by the Registrar. Failure to mail a notice or communication to a Holder
or any defect in it will not affect its sufficiency with respect to other Holders.


 


If a notice or communication is mailed in the
manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.


 


If the Issuers mail a notice or communication
to Holders, they will mail a copy to the Trustee and each Agent at the same time.


 


Section
12.03         [Reserved.]


 


Section
12.04         Certificate and Opinion as to Conditions Precedent.


 


Upon any request or application by the Issuers
to the Trustee to take any action under this Indenture, the Issuers shall furnish to the Trustee:


 


(a)          an
Officers’ Certificate in form and substance reasonably satisfactory to the Trustee
(which must include the statements set forth in Section 12.05 hereof) stating
that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied; and


 


(b)          an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which must include the statements set forth in Section 12.05 hereof) stating
that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.


 


Section
12.05         Statements Required in Certificate or
Opinion.


 


Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture must include:


 


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


 




    	 	113	 



     


    

 


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


 


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


 


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


 


Section
12.06         Rules by Trustee and Agents.


 


The Trustee may make reasonable rules for action
by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its
functions.


 


Section
12.07         No Personal Liability of Directors, Officers,
Employees and Unitholders.


 


No past, present or future director, officer,
partner, employee, incorporator, manager, unitholder or other owner of Capital Stock of the Issuers or any Guarantor, as such,
will have any liability for any obligations of the Issuers or the Guarantors under the Note Documents or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for issuance of the Notes.


 


Section
12.08         No Governing Law.


 


THE LAW OF THE STATE OF NEW YORK WILL GOVERN
AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.


 


Section
12.09         No Adverse Interpretation of Other Agreements.


 


This Indenture may not be used to interpret
any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.


 


Section
12.10         No Successors.


 


All agreements of the Issuers in this Indenture
and the Notes will bind their respective successors. All agreements of the Trustee in this Indenture will bind its successors.
All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05
hereof.


 


Section
12.11         Severability.


 


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


 




    	 	114	 



     


    

 


Section
12.12         Counterpart Originals.


 


The parties may sign any number of copies of
this Indenture, and each party hereto may sign any number of separate copies of this Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile
or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used
in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed
to be their original signatures for all purposes.


 


Section
12.13         Table of Contents, Headings, etc.


 


The Table of Contents, Cross-Reference Table
and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.


 


Section
12.14         Payment Date Other Than a Business
Day.


 


If any payment with respect to any principal
of, or premium or interest, if any, on any Note (including any payment to be made on any date fixed for redemption or purchase
of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the
next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period.


 


Section
12.15         Evidence of Action by Holders.


 


Whenever in this Indenture it is provided that
the Holders of a specified percentage in aggregate principal amount of the Notes may take action (including the making of any demand
or request, the giving of any direction, notice, consent or waiver or the taking of any other action) the fact that at the time
of taking any such action the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or
any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, (b) by the
record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with procedures approved
by the Trustee, (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders or (d)
in the case of Notes evidenced by a Global Note, by any electronic transmission or other message, whether or not in written format,
that complies with the Depositary’s applicable procedures.


 


Article
XIII.

COLLATERAL AND SECURITY


 


Section
13.01         Security Interest.


 


(a)          The
due and punctual payment of the Obligations on the Notes
and the Obligations of the Guarantors under
the Guarantees, when and as the same shall be due and payable, whether on an interest payment
date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on
the overdue principal of, premium on, if any, and interest, if any (to the extent permitted by law), on the Notes, the Guarantees
and performance of all other obligations of the Issuers and the Guarantors to the Holders or the Trustee and/or the Collateral
Trustee under the Note Documents, according to the terms hereunder or thereunder, are secured, as provided in the Security Documents.
The Issuers and each of the Guarantors consent and
agree to be bound by the terms of the Security Documents to which they are parties, as the
same may be in effect from time to time, and agree to perform their obligations thereunder
in accordance therewith. The Issuers and the Guarantors
hereby agree that the Collateral Trustee shall hold the Collateral
(directly or through co-trustees or agents)
on behalf of and for the benefit of all of the Holders and the other holders of Parity
Lien Obligations.


 




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(b)          Each
Holder, by its acceptance of the Notes and of the
Guarantees, consents and agrees to the terms of the Intercreditor
Agreement and the Security Documents (including, without limitation, the provisions
providing for the subordination of Liens, the foreclosure and release of Collateral and
amendments to the Security Documents) as the same may be in effect or may be amended from
time to time in accordance with their terms and authorizes and appoints U.S. Bank National Association as the Trustee and as the
Collateral Trustee. Each Holder and the Trustee hereby authorize and appoint U.S. Bank National Association as Collateral Trustee
and each Holder and Trustee direct the Collateral Trustee to enter into the Security Documents (including any amendments thereto
contemplated by Section 7.1 of the Collateral Trust Agreement and any security
documents to secure additional Parity Lien Debt in accordance with Section 3.8 of
the Collateral Trust Agreement) and to perform its obligations
and exercise its rights thereunder in accordance therewith, subject to the terms and conditions thereof, including, without
limitation, the limitations on duties of the Collateral Trustee provided in Section 5.12
of the Collateral Trust Agreement. The Trustee, the
Collateral Trustee and each Holder, by accepting
the Notes and the Guarantees of the Guarantors,
acknowledges that, as more fully set forth in the Security Documents, the Collateral
as now or hereafter constituted shall be held for the benefit of all the holders
of Parity Lien Obligations, subject to the Intercreditor
Agreement, the Collateral Trustee and the Trustee,
and the Lien of this Indenture and the Security
Documents is subject to and qualified and limited in all respects by the Intercreditor Agreement,
the Security Documents and actions that may be taken thereunder.


 


Section
13.02         Post-Issue Date Collateral Requirements.


 


(a)          Within
30 days of the Issue Date, the Company shall, or
shall cause the applicable Guarantor to, (i) execute and deliver to the Collateral
Trustee, as mortgagee or beneficiary, as applicable, such Mortgages
or other Security Documents, and any supplements or
amendments related thereto, together with satisfactory evidence of the completion (or satisfactory
arrangements for the completion) of all recordings and filings of such Mortgages or other
Security Documents in the proper recorders’ offices or
appropriate public records (and payment of any taxes or fees in connection therewith)
as may be necessary to create a valid, perfected second-priority Lien (subject to the Intercreditor
Agreement and to Permitted Collateral Liens), on or against the Collateral
that include not less than 80% of the Present Value of Proved Reserves held by the Company and the Restricted Subsidiaries, as
evaluated in Reserve Reports prepared by the Company or which the Company causes to be prepared as of each December 31 and June
30 and (ii) on the date that each such Mortgage is so filed or
recorded, cause its counsel for the jurisdiction in which the relevant Oil and Gas Properties
are located to execute and deliver to the Collateral Trustee a favorable Opinion
of Counsel with respect thereto in form and substance reasonably satisfactory to the Collateral
Trustee.


 




    	 	116	 



     


    

 


(b)          Any
Security Documents entered into after the Issue Date shall
be substantially in the form of the corresponding security document securing the Priority Liens,
or to the extent there is no such corresponding security document, the corresponding security
documents securing the Priority Lien Obligations in place on the Issue
Date, in each case, with such changes as are reasonably necessary to reflect the terms of the Intercreditor
Agreement and with such deletions or modifications of representations, warranties
and covenants as are customary with respect to security documents establishing Liens
securing publicly traded debt securities, all as certified to the Collateral Trustee pursuant
to an Officers’ Certificate and Opinion of Counsel.


 


Section
13.03         Further Assurances; Liens on
Additional Property.


 


(a)          The
Issuers and each of the Guarantors shall do or cause to be done all acts and things that
may be required, or that the Collateral Trustee from time to time may reasonably request, to assure and confirm that the Collateral
Trustee holds, for the benefit of the holders of Parity Lien Obligations, duly created and
enforceable and perfected second priority Liens upon the Collateral
(subject to the Intercreditor Agreement and Permitted Collateral Liens) (including
any acquired Property or other Property required
by any Parity Lien Document to become, Collateral after
the Issue Date), in each case, as contemplated by, and with the Lien
priority required under, the Parity Lien Documents, and in connection with any merger,
consolidation or sale of assets of any Issuer or any
Guarantor, the property and assets of the Person
which is consolidated or merged with or into
any Issuers or any Guarantor, to the extent that
they are property or assets of the types which would constitute Collateral
under the Security Documents, shall be treated as after-acquired property
and such Issuer or such Guarantor shall take
such action as may be reasonably necessary to cause such property and assets to be made
subject to the Parity Liens, in the manner and to the extent required under the Parity
Lien Documents; provided, however, that this clause (a) shall not require delivery of any Mortgage unless,
and then only to the extent, required under clause (c) or (d) of this Section 13.03.


 


(b)          Upon
the request of the Collateral Trustee at any time and from time to time, the Issuers
and each of the Guarantors shall promptly execute, acknowledge and deliver such Security
Documents, instruments, certificates, financing statements, notices and other documents, and take such other actions as
shall be required, or that the Collateral Trustee may
reasonably request, to create, perfect, protect, assure or enforce the Liens
and benefits intended to be conferred, in each case as contemplated by the Parity Lien Documents
for the benefit of the holders of Parity Lien Obligations; provided
that no such Security Document, instrument or other
document shall be materially more burdensome upon the Issuers and the Guarantors
than the Parity Lien Documents executed and delivered (or
required to be executed and delivered promptly after the Issue Date, including pursuant to Section 13.2) by the Issuers
and the Guarantors in connection with the issuance of the Notes
on or about the Issue Date (it being understood
that the Collateral Trustee shall have no liability whatsoever to determine whether such
a document is materially burdensome and shall no liability whatever with respect to this determination).


 




    	 	117	 



     


    

 


(c)          The
Company will deliver to the Trustee and the Collateral Trustee semi-annually on or before April
1 and October 1 in each calendar year, beginning April 1, 2016, an Officers’ Certificate
certifying that, as of the date of such certificate, that the Collateral includes
a valid and perfected Parity Lien securing the Parity Lien
Obligations on Oil and Gas Properties that include not less than 80% of the Present
Value of Proved Reserves held by the Company and the Restricted
Subsidiaries, as evaluated in Reserve Reports prepared by the Company
or which the Company causes to be prepared as of each December 31 and June 30 (the
“minimum mortgage requirement”). In the event that such requirement is
not satisfied, then the Company shall, or shall cause
the applicable Restricted Subsidiary to, within sixty (60) days of delivery of such certificate,
execute and deliver to the Collateral Trustee: (i) such executed Mortgages
or amendments or supplements to prior Mortgages naming
the Collateral Trustee, as mortgagee or beneficiary,
as may be necessary to cause the minimum mortgage requirement to be satisfied, (ii) satisfactory
evidence of the completion of all recordings and filings of such Mortgages, amendments or
supplements in the proper recorders’ offices or appropriate public records
(and payment of any taxes or fees in connection therewith) and (iii) local counsel opinion
or opinions (each, subject to customary assumptions and qualifications) to the effect that
the Collateral Trustee has a valid and perfected Lien with
respect to the Oil and Gas Properties that are subject to the applicable Mortgage;
provided that (x) to the extent Mortgages have
previously been recorded in the public records of the state applicable to such additional Mortgages
or amendments or supplements to prior Mortgages and
(y) the applicable local counsel opinion or opinions had previously been delivered in connection
with the filing of such mortgages, no such opinion shall be required unless a corresponding
opinion will be delivered to the Priority Lien Collateral
Agent.


 


(d)          The
Issuers will deliver to the Trustee copies of all
Security Documents delivered to the Collateral Trustee.


 


Section
13.04         Intercreditor Agreement.


 


This Article XIII and the provisions
of each other Security Document are subject to the terms, conditions and benefits set forth in the Intercreditor Agreement. Each
Issuer and each Guarantor consents to, and agrees to be bound by, the terms of the Intercreditor Agreement, as the same may be
in effect from time to time, and to perform its obligations thereunder in accordance with the terms thereof. Each Holder, by its
acceptance of the Notes, (a) consents to the subordination of Liens provided for in the Intercreditor Agreement, (b) agrees that
it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement and (c) authorizes and
instructs the Collateral Trustee on behalf of each Holder to enter into the Intercreditor Agreement as Second Lien Collateral Agent
(as defined in the Intercreditor Agreement) on behalf of such Holders as Second Lien Secured Parties (as defined in the Intercreditor
Agreement). In addition, each Holder authorizes and instructs the Collateral Trustee to enter into any amendments or joinders to
the Intercreditor Agreement in accordance with its terms with the consent of the parties thereto or otherwise in accordance with
its terms, without the consent of any Holder or the Trustee, to add additional Indebtedness as Priority Lien Debt or Parity Lien
Debt and add other parties (or any authorized agent or trustee therefor) holding such Indebtedness thereto and to establish that
the Lien on any Collateral securing such Indebtedness shall rank equally with the Liens on such Collateral securing the other Priority
Lien Debt or Parity Lien Debt, as applicable, then outstanding, to the extent permitted by the Secured Debt Documents. The Trustee
and the Collateral Trustee shall be entitled to rely upon an Officers’ Certificate and/or an Opinion of Counsel certifying
that any such amendment is authorized under the Note Documents. The foregoing provisions are intended as an inducement to the lenders
under the Credit Agreement to extend credit to the Company and certain of its Subsidiaries, and such lenders are intended third
party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.


 




    	 	118	 



     


    

 


Section
13.05         Collateral Trust Agreement.


 


This Article XIII and the provisions
of each other Security Document are subject to the terms, conditions and benefits set forth in the Collateral Trust Agreement.
Each Issuer and each Guarantor consents to, and agrees to be bound by, the terms of the Collateral Trust Agreement, as the same
may be in effect from time to time, and to perform its obligations thereunder in accordance with the terms therewith. Each Holder,
by its acceptance of the Notes, (a) agrees that it will be bound by, and will take no actions contrary to, the provisions of the
Collateral Trust Agreement and (b) authorizes and instructs the Collateral Trustee on behalf of the Holders of the Notes and each
other holder of Parity Lien Obligations to enter into the Collateral Trust Agreement as Collateral Trustee on behalf of such holders
of Parity Lien Obligations. In addition, each Holder authorizes and instructs the Collateral Trustee to enter into any amendments
or joinders to the Collateral Trust Agreement in accordance with its terms with the consent of the parties thereto or otherwise
in accordance with its terms, without the consent of any Holder or the Trustee, to add additional Indebtedness as Priority Lien
Debt or Parity Lien Debt and add other parties (or any authorized agent or trustee therefor) holding such Indebtedness thereto
and to establish that the Lien on any Collateral securing such Indebtedness shall rank equally with the Liens on such Collateral
securing the other Priority Lien Debt or Parity Lien Debt, as applicable, then outstanding, to the extent permitted by the Secured
Debt Documents. The Trustee and the Collateral Trustee shall be entitled to rely upon an Officers’ Certificate and/or an
Opinion of Counsel certifying that any such amendment is authorized under the Note Documents.


 


Section
13.06         Release of Liens in Respect of Notes.


 


The Collateral Trustee’s Parity Liens
upon the Collateral will no longer secure the Notes outstanding under this Indenture or any other Obligations under the Note Documents,
and the right of the Holders of the Notes to the benefits and proceeds of the Collateral Trustee’s Parity Liens on the Collateral
will terminate and be discharged:


 


(a)          upon
satisfaction and discharge of this Indenture in accordance with Article XI
hereof;


 


(b)          upon
a Legal Defeasance or Covenant Defeasance of the Notes in
accordance with Article VIII hereof;


 


(c)          upon
payment in full in cash and discharge of all Notes outstanding under this Indenture
and all other Obligations that are outstanding,
due and payable under this Indenture and the other Note
Documents at the time the Notes are paid in full in cash and discharged (other than
contingent indemnity obligations for which no claims has been made);


 


(d)          as
to any Collateral of the Issuers or a Guarantor
that is sold, transferred or otherwise disposed of by the Company
or any Guarantor to a Person that is not (either
before or after such sale, transfer or disposition)
the Company or any of its Restricted Subsidiaries in
a transaction or other circumstance that complies with Section 4.10
hereof (other than the obligation to apply proceeds of such Asset Sale as provided
in Section 3.09 hereof) and is permitted
by all of the other Note Documents, at the time of such sale, transfer or
other disposition or to the extent of the interest sold, transferred or
otherwise disposed of; provided that the Collateral
Trustee’s Liens upon the Collateral will not
be released if the sale or disposition is subject to Section 5.01
hereof;


 




    	 	119	 



     


    

 


(e)          in
whole or in part, with the consent of the Holders of
the requisite percentage of Notes in accordance with Article IX
hereof;


 


(f)          with
respect to the assets of any Guarantor, at the time that such Guarantor
is released from its Note Guarantee in accordance with Section 10.05;


 


(g)          if
and to the extent required by clauses (a)(2) or (3) of Section 4.01 of the Intercreditor
Agreement;


 


(h)          if
and to the extent any Collateral becomes an Excluded Asset; or


 


(i)          as
ordered pursuant to applicable law under a final and nonappealable order or judgment of a court of competent jurisdiction.


 


In addition, the Collateral Trustee’s
Liens on the Collateral will be released upon the terms and subject to the conditions set forth in Section 4.1 of the Collateral
Trust Agreement.


 


Section
13.07         Collateral Trustee.


 


(a)          The
Collateral Trustee will hold (directly or through
co-trustees or agents) and, subject to the terms of the Intercreditor
Agreement, will be entitled to enforce all Liens
on the Collateral created by the Security Documents.


 


(b)          Except
as provided in the Collateral Trust Agreement or as
directed by an Act of Parity Lien Debtholders in accordance with the Collateral
Trust Agreement, the Collateral Trustee will not be obligated:


 


(i)          to
act upon directions purported to be delivered to it by any Person;


 


(ii)         to
take any Enforcement Action; or


 


(iii)        to
take any other action whatsoever with regard to any or all of the Security
Documents, the Liens created thereby or the
Collateral.


 


(c)          The
Issuers will deliver to each Parity Lien Representative
copies of all Security Documents delivered to the Collateral
Trustee.


 


Section
13.08         Insurance.


 


(a)          The
Issuers and the Guarantors shall:


 


(i)          maintain
insurance at all times by financially sound and reputable insurers, to such extent and against such risks (and with such deductibles,
retentions and exclusions), including fire and other risks insured against, as is customary with companies in the same or
similar businesses operating in the same or similar locations; and


 




    	 	120	 



     


    

 


(ii)         maintain
such other insurance as may be required by law.


 


(b)          Upon
the reasonable request of the Collateral Trustee, the Issuers
and the Guarantors will furnish to the Collateral
Trustee information as to their property and liability insurance carriers.


 


[Signatures on following
pages]


 




    	 	121	 



     


    

 


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


 


Dated as of February 10, 2016


 


	 	ISSUERS:
	 	 	 
	 	 	VANGUARD NATURAL RESOURCES, LLC
	 	 	 	 
	 	 	By:	/s/ Scott W. Smith
	 	 	 	Name: Scott W. Smith
	 	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	 	VNR FINANCE CORP.
	 	 	 	 
	 	 	By:	/s/ Scott W. Smith
	 	 	 	Name: Scott W. Smith
	 	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	GUARANTORS:
	 	 	 
	 	 	VANGUARD NATURAL GAS, LLC
	 	 	 	 
	 	 	 	By:	VANGUARD NATURAL RESOURCES, LLC, its sole manager
	 	 	 	 
	 	 	By:	/s/ Scott W. Smith
	 	 	 	Name: Scott W. Smith
	 	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	 	VANGUARD OPERATING, LLC
	 	 	 	 
	 	 	 	By:	VANGUARD NATURAL GAS, LLC, its sole member
	 	 	 	 
	 	 	 	By:	VANGUARD NATURAL RESOURCES, LLC, its sole manager
	 	 	 	 
	 	 	By:	/s/ Scott W. Smith
	 	 	 	 
	 	 	 	Name: Scott W. Smith
	 	 	 	Title: President and Chief Executive Officer


 




     


     


    

 


	 	ENCORE CLEAR FORK PIPELINE, LLC
	 	 	 
	 	 	By:	VANGUARD OPERATING, LLC, its sole manager
	 	 	 	 
	 	 	By:	VANGUARD NATURAL GAS, LLC, its sole member
	 	 	 	 
	 	 	By:	VANGUARD NATURAL RESOURCES, LLC, its sole manager
	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	VNR HOLDINGS, LLC
	 	 	 	 
	 	 	By:	VANGUARD NATURAL GAS, LLC, its sole member
	 	 	 	 
	 	 	By:	VANGUARD NATURAL RESOURCES, LLC, its sole manager
	 	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer
	 	 
	 	EAGLE ROCK ENERGY ACQUISITION CO., INC.
	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer
	 	 
	 	EAGLE ROCK ENERGY ACQUISITION CO. II, INC.
	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer


 




     


     


    

 


	 	EAGLE ROCK UPSTREAM DEVELOPMENT COMPANY, INC.
	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer
	 	 
	 	EAGLE ROCK UPSTREAM DEVELOPMENT COMPANY II, INC.
	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	EAGLE ROCK ACQUISITION PARTNERSHIP, L.P.
	 	 	 
	 	 	By:	Eagle Rock Upstream Development Company, Inc., its general partner
	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer
	 	 	 
	 	EAGLE ROCK ACQUISITION PARTNERSHIP II, L.P.
	 	 	 
	 	 	By: Eagle Rock Upstream Development Company II, Inc., its general partner
	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer
	 	 
	 	ESCAMBIA OPERATING CO. LLC
	 	 	 
	 	By:	/s/ Scott W. Smith
	 	 	Name: Scott W. Smith
	 	 	Title: President and Chief Executive Officer


 




     


     


    

 


	 	ESCAMBIA ASSET CO. LLC
	 	 	 	 
	 	 	By:	/s/ Scott W. Smith
	 	 	 	Name: Scott W. Smith
	 	 	 	Title: President and Chief Executive Officer


 




     


     


    

 


	 	TRUSTEE AND COLLATERAL TRUSTEE:
	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION
	 	 	 	 	 
	 	 	 	By:	/s/ Mauri J. Cowen
	 	 	 	Name: Mauri J. Cowen
	 	 	 	Title: Vice President


 




     


     


    

 


EXHIBIT A


 


FORM OF NOTE


 


[Face of Note]


 


CUSIP __________


ISIN __________


7.0% Senior Secured Second Lien Notes due
2023


 


No. ___ $____________


 


VANGUARD NATURAL RESOURCES,
LLC


VNR FINANCE CORP.


 


promise to pay, jointly and severally, to __________________ or
registered assigns, the principal sum of _______________________ DOLLARS of the United States of America [or such greater or lesser
amount as may be indicated on the attached Schedule of Exchanges of Interests in the Global Note] on February 15, 2023.


 


Interest Payment Dates: February 15 and August 15


 


Record Dates: February 1 and August 1


 


Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.


Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit of the Indenture
or be valid or obligatory for any purpose.


 


Dated: _______________, 20___


 


	 	VANGUARD NATURAL RESOURCES, LLC
	 	 	 
	 	By: 	 
	 	 	Name:
	 	 	Title:
	 	 
	 	VNR FINANCE CORP.
	 	 	 
	 	By: 	 
	 	 	Name:
	 	 	Title:


 




    	 	A-1	 



     


    

 


This is one of the Notes referred to in the
within-mentioned Indenture:


 


U.S. BANK NATIONAL ASSOCIATION, as Trustee


 


	By:	 	 
	 	Authorized Signatory	 


 




    	 	A-2	 



     


    

 


[Back of Note]


 


7.0% Senior Secured Second
Lien Note due 2023


 


[Insert the Global Note
Legend, if applicable pursuant to the provisions of the Indenture]


 


Capitalized terms used herein have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.


 


(1)         INTEREST.
Vanguard Natural Resources, LLC, a Delaware limited liability company (the “Company”), and VNR Finance Corp.,
a Delaware corporation (“Finance Corp.” and together with the Company, the “Issuers”), jointly
and severally promise to pay or cause to be paid interest on the principal amount of this Note at 7.0% per annum from February
10, 2016 until maturity. The Issuers will pay interest semi-annually in arrears on February 15 and August 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”).
Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from
the date of issuance; provided that, if there is no existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be August 15, 2016.
The Issuers will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal
and premium, if any, from time to time on demand at a rate that is 1% per annum higher than the then applicable interest rate on
the Notes to the extent lawful; they will pay interest (including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest, if any (without regard to any applicable grace period), from time to time on demand at
the same rate to the extent lawful.


 


Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months.


 


(2)         METHOD
OF PAYMENT. The Issuers will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders
of Notes at the close of business on the February 1 and August 1 next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. The Notes will be payable as to principal, premium, if any, and interest, if any, at the office
or agency of the Issuers maintained for such purpose within the City and State of New York, or, at the option of the Issuers, payment
of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided
that payment by wire transfer of immediately available funds will be required with respect to principal of, or premium or interest,
if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company
or the Paying Agent. Such payment will be in such coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.


 




    	 	A-3	 



     


    

 


(3)           PAYING
AGENT AND REGISTRAR. Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change the Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar.


 


(4)           INDENTURE.
The Issuers issued the Notes under an Indenture dated as of February 10, 2016 among the Issuers, the Guarantors and the Trustee
(the “Indenture”). The terms of the Notes include those stated in the Indenture. The Notes are subject to all
such terms and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts
with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are unsecured
obligations of the Issuers. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.


 


(5)           OPTIONAL
REDEMPTION.


 


(a)          At
any time prior to February 15, 2019, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount
of Notes issued under the Indenture, with an amount of cash not greater than the net cash proceeds of an Equity Offering by the
Company, upon notice as provided in the Indenture, at a redemption price equal to 107.000% of the principal amount of the Notes
redeemed, plus accrued and unpaid interest, if any, to the date of redemption (subject to the rights of Holders on the relevant
record date to receive interest on the relevant Interest Payment Date), provided that:


 


(i)          at
least 65% of the aggregate principal amount of Notes originally issued under the Indenture (excluding Notes held by the Company
and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and


 


(ii)         the
redemption occurs within 180 days of the date of the closing of such Equity Offering.


 


(b)          At
any time prior to February 15, 2019, the Issuers may on any one or more occasions redeem all or a part of the Notes, upon notice
as provided in the Indenture, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus the Applicable
Premium as of, and accrued and unpaid interest to, the date of redemption, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant Interest Payment Date.


 


(c)          The
Issuers may redeem all (but not a portion of) the Notes when permitted by, and pursuant to the conditions in, Section 4.15(f) of
the Indenture.


 


(d)          Except
pursuant to the preceding paragraphs, the Notes will not be redeemable at the Issuers’ option prior to February 15, 2019.


 




    	 	A-4	 



     


    

 


(e)          On
and after February 15, 2019, the Issuers may on any one or more occasions redeem all or a part of the Notes, upon notice as provided
in the Indenture, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid
interest, if any, on the Notes redeemed, to the applicable redemption date, subject to the rights of Holders on the relevant record
date to receive interest on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on February
15 of the years indicated below:


 


	Year	 	Percentage	 
	2019	 	 	105.250	%
	2020	 	 	103.500	%
	2021	 	 	101.750	%
	2022 and thereafter	 	 	100.000	%



 


(6)           MANDATORY
REDEMPTION. The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes.


 


(7)           REPURCHASE
AT THE OPTION OF HOLDER.


 


(a)          If
there is a Change of Control, the Company will be required to make an offer (a “Change of Control Offer”) to
each Holder to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000 in excess thereof) of each Holder’s
Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if
any, thereon to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the
relevant Interest Payment Date (the “Change of Control Payment”). Within 30 days following any Change of Control,
the Company will mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by
the Indenture.


 


(b)          If
the Company or a Restricted Subsidiary of the Company consummates any Asset Sales, within five days of each date on which the aggregate
amount of Excess Proceeds exceeds $20.0 million, the Company will make an Asset Sale Offer to all Holders of Notes and all holders
of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with
respect to offers to purchase, prepay or redeem with the proceeds of sales of assets to purchase, prepay or redeem, on a pro rata
basis, the maximum principal amount of Notes and such other pari passu Indebtedness (plus all accrued interest on the Indebtedness
and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased, prepaid or
redeemed out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount, plus
accrued and unpaid interest, if any, to the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes
on the relevant record date to receive interest due on the relevant Interest Payment Date, and will be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Company or any Restricted Subsidiary may use those Excess
Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes tendered in such
Asset Sale Offer exceeds the amount of Excess Proceeds allocated to the purchase of Notes, the Trustee will select the Notes to
be purchased on a pro rata basis (except as provided in Section 4.10 of the Indenture), based on the amounts tendered. Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero. Holders of Definitive Notes that are the subject
of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.


 




    	 	A-5	 



     


    

 


(8)         NOTICE
OF REDEMPTION. At least 30 days but not more than 60 days before a redemption date, the Issuers will mail or cause to be mailed,
by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance
of the Notes or a satisfaction and discharge of the Indenture pursuant to Article VIII or XI thereof. Notes and portions of Notes
selected will be in amounts of $1,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder
are to be redeemed, the entire outstanding amount of Notes held by such Holder shall be redeemed.


 


(9)         DENOMINATIONS,
TRANSFER, EXCHANGE. The Notes are in registered form in denominations of $1,000 and integral multiples of $1,000 in excess
thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuers may
require a Holder to pay any taxes or similar governmental charge permitted by the Indenture. The Issuers need not exchange or register
the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed
in part. Also, the Issuers need not exchange or register the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed or during the period between a record date and the next succeeding Interest Payment Date.


 


(10)        PERSONS
DEEMED OWNERS. The registered Holder of a Note may be treated as the owner of it for all purposes. Only registered Holders
have rights under the Indenture.


 


(11)        AMENDMENT,
SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Notes or the Note Guarantees may be amended or supplemented
with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional
Notes, if any, voting as a single class, and any existing Default or Event of Default or compliance with any provision of the Indenture
or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of
the then outstanding Notes including Additional Notes, if any, voting as a single class. Without the consent of any Holder of Notes,
the Indenture, the Notes or the Note Guarantees may be amended or supplemented: to cure any ambiguity, defect or inconsistency;
to provide for uncertificated Notes in addition to or in place of certificated Notes; to provide for the assumption of the Issuers’
or a Guarantor’s obligations to Holders of the Notes and Note Guarantees by a successor to an Issuer or such Guarantor pursuant
to the Indenture; to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does
not adversely affect the legal rights under the Indenture of any Holder; to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the TIA; to conform the text of the Indenture, the Notes or the Note
Guarantees to any provision of the “Description of Notes” section of the Issuers’ Offering Memorandum dated January
8, 2016, relating to the initial offering of the Notes; to provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture; to secure the Notes or the Note Guarantees pursuant to the requirement of Section 4.12
of the Indenture; to add any additional Guarantor or to evidence the release of any Guarantor from its Note Guarantee, in each
case as provided in the Indenture; or to evidence or provide for the acceptance of appointment under the Indenture of a successor
Trustee.


 




    	 	A-6	 



     


    

 


(12)        DEFAULTS
AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on, the Notes; (ii) default
in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium on, if any, the Notes,
(iii) failure by the Issuers to comply with the provisions of Section 3.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by
the Company for 120 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount
of the Notes then outstanding to comply with Section 4.03 of the Indenture; (v) failure by the Issuers for 60 days after notice
to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply
with any of their other agreements in the Indenture; (vi) default under certain other agreements relating to Indebtedness of the
Company or any of its Restricted Subsidiaries which default is a Payment Default or results in the acceleration of such Indebtedness
prior to its express maturity; (vii) failure by the Company or any of its Restricted Subsidiaries to pay certain final judgments
entered by a court or courts of competent jurisdiction aggregating in excess of $15.0 million (to the extent not covered by insurance
by a reputable and creditworthy insurer as to which the insurer has not disclaimed coverage), which judgments are not paid, discharged
or stayed, for a period of 60 days; (viii) certain events of bankruptcy or insolvency with respect to Finance Corp., the Company
or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together,
would constitute a Significant Subsidiary; (ix) except as permitted by the Indenture, any Note Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person
acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee, except, in each case, by reason
of the release of such Note Guarantee in accordance with the Indenture; and (x) any Note Document or any security interest created
by the Note Documents ceases to be in full force and effect, or the repudiation by the Company or any of its Restricted Subsidiaries
of any of their obligations under the Note Documents. In the case of an Event of Default arising from certain events of bankruptcy
or insolvency with respect to the Company, any Restricted Subsidiary of the Company that is a Significant Subsidiary or any group
of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, all outstanding Notes
will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes
to be due and payable immediately. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject
to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except
a Default or Event of Default relating to the payment of principal, or premium or interest, if any) if it determines that withholding
notice is in their interest. The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to
the Trustee may, on behalf of all the Holders, rescind an acceleration or waive an existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default in the payment of principal of, or premium or
interest, if any, on, the Notes (including in connection with an offer to purchase any Notes). The Issuers are required to deliver
to the Trustee annually an Officers’ Certificate regarding compliance with the Indenture, and the Issuers are required, upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a written statement specifying such Default or Event
of Default.


 




    	 	A-7	 



     


    

 


(13)        TRUSTEE
DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.


 


(14)        NO
RECOURSE AGAINST OTHERS. No past, present or future director, officer, partner, employee, incorporator, manager or unitholder
or other owner of Capital Stock of the Issuers or any Guarantor, as such, will have any liability for any obligations of the Issuers
or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes.


 


(15)        AUTHENTICATION.
This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.


 


(16)        ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian),
and U/G/M/A (= Uniform Gifts to Minors Act).


 


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


 




    	 	A-8	 



     


    

 


(18)        GOVERNING
LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES.


 


The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture. Requests may be made to:


 


Vanguard Natural Resources, LLC


VNR Finance Corp.


5847 San Felipe, Suite 3000


Houston, TX 77057


Facsimile No.: (832) 327-2260


Attention: Chief Financial Officer


 




    	 	A-9	 



     


    

 


ASSIGNMENT FORM


 


To assign this Note, fill in the form below:


 


	(I) or (we) assign and transfer this Note to:  	 
	 	(Insert assignee’s legal name)


 





 






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


 


 





 



 





 



 





 



 





 



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


 


	and irrevocably appoint 	 


to transfer this Note on the books of the Issuers. The agent may
substitute another to act for him.


 


Date: _______________


 


	 	Your Signature:  	 
	 	(Sign exactly as your name appears on the face of this Note)


 


Signature Guarantee*: _________________________


 


*             Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).


 




    	 	A-10	 



     


    

 


OPTION OF HOLDER TO ELECT
PURCHASE


 


If you want to elect to have this Note purchased
by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:


 


 ̈ Section
4.10                   ̈ Section
4.15


 


If you want to elect to have only part of the
Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:


 


$_______________


 


Date: _______________


 


	 	Your Signature:  	 
	 	(Sign exactly as your name appears on the face of this Note)


 


	 	Tax Identification No.:  	 


 


Signature Guarantee*: _________________________


 


*             Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor acceptable to the Trustee).


 




    	 	A-11	 



     


    

 


SCHEDULE OF EXCHANGES OF INTERESTS
IN THE GLOBAL NOTE*


 


The following exchanges of a part of this Global
Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive
Note for an interest in this Global Note, have been made:


 


	Date of

Exchange	 	Amount of decrease

in Principal

Amount of

this Global Note	 	
        Amount of

        increase in

        Principal

        Amount of

        this Global Note
	 	
        Principal Amount

        of this Global

        Note following

        such decrease

        (or increase)
	 	
        Signature of

        authorized

        officer of

        Trustee or

        Custodian

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 


 


		*	This schedule should be included only if the Note is issued in global form.



 




    	 	A-12	 



     


    

 


EXHIBIT B


 


FORM OF CERTIFICATE OF TRANSFER


 


Vanguard Natural Resources, LLC


VNR Finance Corp.


5847 San Felipe, Suite 3000


Houston, TX 77057


 


U.S. Bank National Association


5555 San Felipe Street, 11th Floor


Houston, Texas 77056


Facsimile No.: 713-235-9213


Attention: Corporate Trust Services


 


Re: 7.0% Senior Secured Second Lien
Notes due 2023


 


Reference is hereby made to the Indenture, dated
as of February 10, 2016 (the “Indenture”), among Vanguard Natural Resources, LLC, a Delaware limited liability
company (the “Company”), VNR Finance Corp., a Delaware corporation (“Finance Corp.” and,
together with the Company, the “Issuers”), the Guarantors (as defined herein) and U.S. Bank National Association,
a national banking association, as trustee and as collateral trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.


 


___________________, (the “Transferor”)
owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $___________
in such Note[s] or interests (the “Transfer”), to ___________________________ (the “Transferee”),
as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:


 


[CHECK ALL THAT APPLY]


 


1.    ̈
Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant
to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933,
as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A
in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture,
the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities
Act.


 




    	 	B-1	 



     


    

 


2.    ̈
Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive
Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person
in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor
and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor
nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv)
if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an initial purchaser of Notes). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject
to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.


 


3.    ̈
Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive
Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected
in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that (check one):


 


(a)        ̈
  such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;


 


or


 


(b)        ̈
  such Transfer is being effected to the Company or a subsidiary thereof;


 


or


 


(c)        ̈
  such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;


 


or


 


(d)        ̈
  such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it
has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies
with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and
the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) [if such Transfer is in respect of a principal amount of Notes at the time of transfer
of less than $250,000,] an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will
be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the
Restricted Definitive Notes and in the Indenture and the Securities Act.


 




    	 	B-2	 



     


    

 


4.    ̈
Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive
Note.


 


(a)    ̈
Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.


 


(b)    ̈
Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule
903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes,
on Restricted Definitive Notes and in the Indenture.


 


(c)    ̈
Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with
an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance
with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.


 




    	 	B-3	 



     


    

 


This certificate and the statements contained
herein are made for your benefit and the benefit of the Issuers.


 


	 	 
	 	         [Insert Name of Transferor]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


Dated: _______________________


 




    	 	B-4	 



     


    

 


ANNEX A TO CERTIFICATE OF TRANSFER


 


1.             The
Transferor owns and proposes to transfer the following:


 


[CHECK ONE OF (a) OR (b)]


 


(a)    ̈
a beneficial interest in the:


 


(i)         ̈
  144A Global Note (CUSIP _________), or


 


(ii)        ̈
  Regulation S Global Note (CUSIP _________), or


 


(iii)       ̈
  IAI Global Note (CUSIP _________); or


 


(b)   ̈
a Restricted Definitive Note.


 


2.             After
the Transfer the Transferee will hold:


 


[CHECK ONE]


 


(a)   ̈
a beneficial interest in the:


 


(i)         ̈
  144A Global Note (CUSIP _________), or


 


(ii)        ̈
  Regulation S Global Note (CUSIP _________), or


 


(iii)       ̈
  IAI Global Note (CUSIP _________); or


 


(iv)       ̈
  Unrestricted Global Note (CUSIP _________); or


 


(b)   ̈
a Restricted Definitive Note; or


 


(c)   ̈
an Unrestricted Definitive Note,


 


in accordance with the terms of the Indenture.


 




    	 	B-5	 



     


    

 


EXHIBIT C


 


FORM OF CERTIFICATE OF EXCHANGE


 


Vanguard Natural Resources, LLC


VNR Finance Corp.


5847 San Felipe, Suite 3000


Houston, TX 77057


 


U.S. Bank National Association


5555 San Felipe Street, 11th Floor


Houston, Texas 77056


Facsimile No.: 713-235-9213


Attention: Corporate Trust Services


 


Re: 7.0% Senior Secured Second Lien
Notes due 2023


 


Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.


 


(CUSIP [          ])


 


Reference is hereby made to the Indenture, dated
as of February 10, 2016 (the “Indenture”), among Vanguard Natural Resources, LLC, a Delaware limited liability
company (the “Company”), VNR Finance Corp., a Delaware corporation (“Finance Corp.” and,
together with the Company, the “Issuers”), the Guarantors (as defined herein) and U.S. Bank National Association,
a national banking association, as trustee and as collateral trustee.


 


__________________________, (the “Owner”)
owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $____________
in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:


 


1.             Exchange
of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note


 


(a)     ̈   Check
if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note.
In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest
in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities
Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required
in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state of the United States.


 




    	 	C-1	 



     


    

 


(b)    ̈   Check
if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.


 


(c)     ̈ Check
if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the
Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend
are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in
compliance with any applicable blue sky securities laws of any state of the United States.


 


(d)     ̈ Check
if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange
of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive
Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.


 


2.          Exchange
of Restricted Definitive Notes for Beneficial Interests in Restricted Global Notes or Beneficial Interests in Restricted Global
Notes for Restricted Definitive Notes


 


(a)    ̈ Check
if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without
transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive
Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Indenture and the Securities Act.


 




    	 	C-2	 



     


    

 


(b)    ̈ Check
if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the
Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]  ̈ 144A
Global Note,  ̈ Regulation
S Global Note,  ̈ IAI
Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s
own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable
to the Restricted Definitive Note and pursuant to and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.


 


This certificate and the statements contained
herein are made for your benefit and the benefit of the Company.


 


	 	 	 
	 	 	[Insert Name of Transferor]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


Dated: ______________________


 




    	 	C-3	 



     


    

 


EXHIBIT D


 


FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR


 


Vanguard Natural Resources, LLC


VNR Finance Corp.


5847 San Felipe, Suite 3000


Houston, TX 77057


 


U.S. Bank National Association


5555 San Felipe Street, 11th Floor


Houston, Texas 77056


Facsimile No.: 713-235-9213


Attention: Corporate Trust Services


 


Re: 7.0% Senior Secured Second Lien
Notes due 2023


 


Reference is hereby made to the Indenture, dated
as of February 10, 2016 (the “Indenture”), among Vanguard Natural Resources, LLC, a Delaware limited liability
company (the “Company”), VNR Finance Corp., a Delaware corporation (“Finance Corp.” and,
together with the Company, the “Issuers”), the Guarantors (as defined herein) and U.S. Bank National Association,
a national banking association, as trustee and as collateral trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.


 


In connection with our proposed purchase of
$____________ aggregate principal amount of:


 


(a)  ̈ a
beneficial interest in a Global Note, or


 


(b)  ̈ a
Definitive Note,


 


we confirm that:


 


1.          We
understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes
or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended
(the “Securities Act”).


 


2.          We
understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do
so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified
institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and[, if such transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $250,000,] an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is
in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in
a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising
such purchaser that resales thereof are restricted as stated herein.


 




    	 	D-1	 



     


    

 


3.          We
understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and
the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear
a legend to the foregoing effect.


 


4.          We
are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits
and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.


 


5.          We
are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of
which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.


 


You and the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative
or legal proceedings or official inquiry with respect to the matters covered hereby.


 


	 	 
	 	         [Insert Name of Accredited Investor]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


Dated: _______________________


 




    	 	D-2	 



     


    

 


EXHIBIT E


 


[FORM OF NOTATION OF GUARANTEE]


 


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 the Indenture and subject to the provisions in the Indenture, dated as of February 10, 2016 (the “Indenture”),
among Vanguard Natural Resources, LLC, a Delaware limited liability company (the “Company”), VNR Finance Corp.,
a Delaware corporation (“Finance Corp.” and together with the Company, the “Issuers”), the
Guarantors party thereto and U.S. Bank National Association, as trustee (the “Trustee”) and collateral trustee,
(a) the due and punctual payment of the principal of, or premium or interest, if any, on, the Notes, whether at stated maturity,
by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of, or premium or interest,
if any, on, the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Issuers to the Holders
or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article
X of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee.


 


Capitalized terms used but not defined herein
have the meanings given to them in the Indenture.


 


	 	[NAME OF GUARANTOR(S)]
	 	 	 
	 	By:	                
	 	 	Name:
	 	 	Title:


 




    	 	E-1	 



     


    

 


EXHIBIT F


 


[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]


 


SUPPLEMENTAL INDENTURE (this “Supplemental
Indenture”), dated as of ________________, among __________________ (the “Guaranteeing Subsidiary”),
a subsidiary of Vanguard Natural Resources, LLC, a Delaware limited liability company (the “Company”), the Company,
VNR Finance Corp., a Delaware corporation (“Finance Corp.” and together with the Company, the “Issuers”
and individually an “Issuer”), the other Guarantors (as defined in the Indenture referred to herein) and U.S.
Bank National Association, as trustee (the “Trustee”) and collateral trustee (the “Collateral Trustee”)
under the Indenture referred to below.


 


WITNESSETH


 


WHEREAS, the Issuers have heretofore executed
and delivered to the Trustee an Indenture, dated as of February 10, 2016 (the “Indenture”), providing for the
issuance of 7.0% Senior Secured Second Lien Notes due 2023 (the “Notes”);


 


WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally Guarantee all of the Issuers’ Obligations under the Notes and the Indenture
on the terms and conditions set forth herein (the “Note Guarantee”); and


 


WHEREAS, pursuant to Section 9.01 of the Indenture,
the Trustee is authorized to execute and deliver this Supplemental Indenture.


 


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


 


(1)         CAPITALIZED
TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.


 


(2)         AGREEMENT
TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the
conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article X thereof.


 


(3)         NO
RECOURSE AGAINST OTHERS. No director, officer, partner, employee, incorporator, manager or unitholder or other owner of Capital
Stock of the Issuers or any Guarantor, as such, will have any liability for any obligations of the Issuers or the Guarantors under
the Notes, the Indenture or the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes.


 




    	 	F-1	 



     


    

 


(4)         NEW
YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.


 


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


 


(6)         EFFECT
OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.


 


(7)         THE
TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of
this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the
Guaranteeing Subsidiary and the Issuers.


 


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


 


Dated: _______________,


 


	 	[GUARANTEEING SUBSIDIARY]
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	VANGUARD NATURAL RESOURCES, LLC
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	VNR FINANCE CORP.
	 	 	 
	 	By:	               
	 	 	Name:
	 	 	Title:
	 	 
	 	[EXISTING GUARANTORS]


 




    	 	F-2	 



     


    

 


	 	U.S. BANK NATIONAL ASSOCIATION,
	 	As Trustee
	 	 	 
	 	By:	              
	 	Authorized Signatory
	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,
	 	As Collateral Trustee
	 	 	 
	 	By:	          
	 	Authorized Signatory


 




    	 	F-3