exv4w2






Exhibit 4.2




 

 










OASIS PETROLEUM INC.




as the Company



THE SUBSIDIARY GUARANTORS NAMED HEREIN



as the Subsidiary Guarantors



and



U.S. BANK NATIONAL ASSOCIATION



as Trustee



FIRST SUPPLEMENTAL INDENTURE



Dated as of February 2, 2011



To



INDENTURE



Dated as of February 2, 2011



7.25% SENIOR NOTES DUE 2019



 

 








 









 




















TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1 RELATION TO INDENTURE; DEFINITIONS
	 	 	1	 
	SECTION 1.01. Relation to Indenture
	 	 	1	 
	SECTION 1.02. Definitions
	 	 	1	 
	SECTION 1.03. General References
	 	 	2	 
	 
	 	 	 	 
	ARTICLE 2 THE SERIES OF SECURITIES
	 	 	2	 
	SECTION 2.01. The Form and Title of the Securities
	 	 	2	 
	SECTION 2.02. Amount
	 	 	2	 
	SECTION 2.03. Stated Maturity
	 	 	3	 
	SECTION 2.04. Interest and Interest Rates
	 	 	3	 
	SECTION 2.05. Initial Depositary; Paying Agent; Place of Payment
	 	 	3	 
	SECTION 2.06. Optional Redemption
	 	 	3	 
	SECTION 2.07. Mandatory Redemption
	 	 	3	 
	SECTION 2.08. Defeasance and Discharge; Covenant Defeasance
	 	 	3	 
	SECTION 2.09. Subsidiary Guarantees
	 	 	4	 
	SECTION 2.10. Registration Rights Agreement
	 	 	4	 
	SECTION 2.11. Global Securities
	 	 	4	 
	 
	 	 	 	 
	ARTICLE 3 AMENDMENTS TO ORIGINAL INDENTURE
	 	 	4	 
	SECTION 3.01. Defined Terms
	 	 	5	 
	SECTION 3.02. References to Liquidated Damages
	 	 	37	 
	SECTION 3.03. Registration, Registration of Transfer and Exchange
	 	 	37	 
	SECTION 3.04. Defaults and Remedies
	 	 	51	 
	SECTION 3.05. Notice of Defaults
	 	 	55	 
	SECTION 3.06. Compensation and Reimbursement
	 	 	55	 
	SECTION 3.07. Merger, Consolidation or Sale of Substantially All Assets
	 	 	56	 
	SECTION 3.08. Redemption of Notes
	 	 	57	 
	SECTION 3.09. Redemption Upon Equity Offering
	 	 	59	 
	SECTION 3.10. Covenant Defeasance
	 	 	59	 
	SECTION 3.11. Subsidiary Guarantees of the Notes
	 	 	60	 
	 
	 	 	 	 
	ARTICLE 4 ADDITIONAL COVENANTS
	 	 	61	 
	SECTION 4.01. Reports
	 	 	61	 
	SECTION 4.02. Taxes
	 	 	63	 
	SECTION 4.03. Restricted Payments
	 	 	63	 
	SECTION 4.04. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
	 	 	68	 
	SECTION 4.05. Incurrence of Indebtedness and Issuance of Preferred Stock
	 	 	70	 
	SECTION 4.06. Asset Sales
	 	 	75	 
	SECTION 4.07. Transactions with Affiliates
	 	 	79	 
	SECTION 4.08. Limitation on Liens
	 	 	81	 
	SECTION 4.09. Offer to Repurchase upon a Change of Control
	 	 	82	 
	SECTION 4.10. Designation of Restricted and Unrestricted Subsidiaries
	 	 	84	 
	SECTION 4.11. Subsidiary Guarantees
	 	 	85	 






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TABLE OF CONTENTS






	 	 	 	 	 
	 	 	Page	 
	SECTION 4.12. Termination of Certain Covenants
	 	 	86	 
	 
	 	 	 	 
	ARTICLE 5 MISCELLANEOUS
	 	 	86	 
	SECTION 5.01. Certain Trustee Matters
	 	 	86	 
	SECTION 5.02. Continued Effect
	 	 	86	 
	SECTION 5.03. Governing Law
	 	 	87	 
	SECTION 5.04. Counterparts
	 	 	87	 
	 
	 	 	 	 
	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 FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
	 	 	 	 
	Exhibit E: FORM OF SUPPLEMENTAL INDENTURE
	 	 	 	 






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     THIS FIRST SUPPLEMENTAL INDENTURE, dated as of February 2, 2011 (this “First Supplemental
Indenture”), is by and among OASIS PETROLEUM INC., a corporation duly organized and existing under
the laws of the State of Delaware (the “Company”), each of the Subsidiary Guarantors named on the
signature pages hereof, and U.S. BANK NATIONAL ASSOCIATION, as trustee under the Indenture referred
to below (in such capacity, the “Trustee”).



RECITALS OF THE COMPANY




     WHEREAS, the Company and the Trustee have heretofore entered into an Indenture, dated as of
February 2, 2011 (the “Original Indenture”) (the Original Indenture, as supplemented from time to
time, including without limitation pursuant to this First Supplemental Indenture, being referred to
herein as the “Indenture”); and



     WHEREAS, under the Original Indenture, a new series of Securities (as defined in the Original
Indenture) may at any time be established by the Board of Directors of the Company, in accordance
with the provisions of the Original Indenture, and the form and terms of such series may be
established by an indenture supplemental to the Original Indenture; and



     WHEREAS, the Company proposes to create under the Indenture a new series of Securities;



     NOW, THEREFORE, in consideration of the premises, agreements and obligations set forth herein
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree, for the equal and proportionate benefit of all
Holders of the Notes (as defined below), as follows:



ARTICLE 1

Relation to Indenture; Definitions




     SECTION 1.01. Relation to Indenture.



     With respect to the Notes only, this First Supplemental Indenture constitutes an integral part
of the Indenture.



     SECTION 1.02. Definitions.



     For all purposes of this First Supplemental Indenture, capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned thereto in the Original Indenture.



     For all purposes of this First Supplemental Indenture:



     “Company” has the meaning set forth in the preamble hereof.



     “DTC” shall have the meaning set forth in Section 2.05 hereof.



     “Indenture” has the meaning set forth in the recitals hereof.



 









 





     “Trustee” has the meaning set forth in the preamble hereof.



     SECTION 1.03. General References.



     Unless otherwise specified or unless the context otherwise requires, (i) all references in
this First Supplemental Indenture to Articles and Sections refer to the corresponding Articles and
Sections of this First Supplemental Indenture and (ii) the terms “herein,” “hereof,” “hereunder”
and any other word of similar import refer to this First Supplemental Indenture.



ARTICLE 2

The Series of Securities




     SECTION 2.01. The Form and Title of the Securities.



     There is hereby established a new series of Securities to be issued under the Indenture and to
be designated as the Company’s 7.25% Senior Notes due 2019 (the “Notes”). The Notes shall be
substantially in the form attached as Exhibit A hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or permitted by the
Indenture, and may have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as the Company may deem appropriate or as may be required or
appropriate to comply with any laws or with any rules made pursuant thereto or with the rules of
any securities exchange or automated quotation system on which the Notes may be listed or traded,
or to conform to general usage.



     The Notes shall be executed, authenticated and delivered in accordance with the provisions of,
and shall in all respects be subject to, the terms, conditions and covenants of the Original
Indenture as supplemented by this First Supplemental Indenture (including the form of Note attached
as Exhibit A hereto (the terms of which are incorporated in and made a part of this First
Supplemental Indenture for all intents and purposes)). The terms and provisions contained in the
Notes will constitute, and are hereby expressly made, a part of the Indenture, and the Company and
the Trustee, by their execution and delivery of the 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 the Indenture, the provisions of the Indenture shall govern and be
controlling.



     SECTION 2.02. Amount.



     Subject to compliance with Section 10.10 of the Indenture, the aggregate principal amount of
the Notes that may be authenticated and delivered pursuant hereto is unlimited. The Trustee shall
initially authenticate and deliver Notes for original issue in an initial aggregate principal
amount of up to $400,000,000, upon delivery to the Trustee of a Company Order for the
authentication and delivery of such Notes. The aggregate principal amount of the Notes to be
issued hereunder may be increased at any time hereafter and the series may be reopened for
issuances of Additional Notes, upon Company Order without the consent of any Holder and without any
further supplement or amendment to the Original Indenture or this First Supplemental Indenture.
The Notes issued on the date hereof and any such Additional Notes that may be issued hereafter
shall be part of the same series of Securities for all purposes under the Indenture, including
waivers, amendments, redemptions and offers to purchase.



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     SECTION 2.03. Stated Maturity.



     The Notes may be issued on any Business Day on or after the date of this First Supplemental
Indenture, and the Stated Maturity of the principal of the Notes shall be February 1, 2019.



     SECTION 2.04. Interest and Interest Rates.



     The rate or rates at which the Notes shall bear interest, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and
the Regular Record Date for any interest payable on any Interest Payment Date, in each case, shall
be as set forth in the form of Note attached as Exhibit A hereto.



     SECTION 2.05. Initial Depositary; Paying Agent; Place of Payment.



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



     The Company initially appoints the Trustee to act as the Paying Agent.



     The Place of Payment with respect to the Notes, in addition to the Corporate Trust Office of
the Trustee, shall be New York, New York, as provided in Section 10.2 of the Original Indenture.



     SECTION 2.06. Optional Redemption.



     At its option, the Company may redeem the Notes, in whole or in part, in principal amounts of
$2,000 or any integral multiple of $1,000 in excess thereof, at any time or from time to time, at
the applicable Redemption Prices determined as set forth in the form of Note attached hereto as
Exhibit A, in accordance with the terms set forth in the Notes, and in accordance with
Article Eleven of the Original Indenture (as amended and supplemented by this First Supplemental
Indenture, including Section 3.08 hereof).



     SECTION 2.07. Mandatory Redemption.



     Article Twelve of the Original Indenture shall not apply to the Notes. The Company is not
required to make mandatory redemption or sinking fund payments with respect to the Notes, but may
from time to time purchase Notes in the open market or otherwise.



     SECTION 2.08. Defeasance and Discharge; Covenant Defeasance.



     Article Thirteen of the Original Indenture (as amended and supplemented by this First
Supplemental Indenture) shall apply to the Notes. Furthermore, each of the following shall
constitute Additional Defeasible Provisions (as such term is defined in the Original Indenture):



     (a) the covenants set forth in ARTICLE 4 of this First Supplemental Indenture; and



3









 





     (b) the limitation imposed by clause (iv) of Section 8.1(a) of the Indenture (as a result of
this First Supplemental Indenture).



     SECTION 2.09. Subsidiary Guarantees.



     To the extent any Restricted Subsidiary is, and continues to be, on any date after the Issue
Date, required to Guarantee the Notes pursuant to Section 10.16 of the Indenture, Article Fourteen
of the Original Indenture (as amended and supplemented by this First Supplemental Indenture) shall
apply to the Notes.



     If, after the Issue Date, a Restricted Subsidiary is required to Guarantee the Notes pursuant
to Section 10.16 of the Indenture, then the Company will cause such Restricted Subsidiary to
execute and deliver a supplemental indenture in the form attached as Exhibit E hereto,
accompanied by an Opinion of Counsel to the Trustee to the effect that such supplemental indenture
has been duly authorized, executed and delivered by that Restricted Subsidiary and constitutes a
valid and binding agreement of that Restricted Subsidiary, enforceable in accordance with its terms
(subject to customary exceptions)



     SECTION 2.10. Registration Rights Agreement.



     Holders of the Notes shall have the benefit of the Company’s registration obligations with
respect to the Notes, and such Holders shall also have certain obligations to indemnify the Company
under certain circumstances, all as more fully set forth in the Registration Rights Agreement.



     SECTION 2.11. Global Securities.



     Notes issued in global form will be substantially in the form of Exhibit A hereto
(including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global
Note” attached thereto). Notes issued in definitive form 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, purchases 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 3.5 of the Indenture.



ARTICLE 3

Amendments to Original
Indenture




     With respect to the Notes, the Original Indenture is hereby amended as set forth below
in this ARTICLE 3; provided, however, that each such amendment shall apply only to the Notes
and not to any other series of Securities issued under the Indenture.




4











 





     SECTION
3.01. Defined Terms.




     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, Section 1.1 of the Original Indenture is hereby amended by inserting or restating, as
the case may be, each of the following defined terms in its appropriate alphabetical position:




     “144A 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 in
reliance on Rule 144A.




     “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, regardless of
whether 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, but excluding Indebtedness which is extinguished, retired or
repaid in connection with such Person merging with or becoming a Subsidiary of such
specified Person; and




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




     “Additional Assets” means:




     (1) any property or assets (other than Indebtedness and Capital Stock) to be
used by the Company or a Restricted Subsidiary in a Related Business;




     (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 another Restricted
Subsidiary;




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




     (4) Capital Stock of any Restricted Subsidiary; provided that all the Capital
Stock of such Subsidiary held by the Company or any of its Restricted Subsidiaries
shall entitle the Company or such Restricted Subsidiary to not less than a pro rata
portion of all dividends or other distributions made by such Subsidiary upon any of
such Capital Stock;




provided, however, that in the case of clauses (2), (3) and (4), such Subsidiary is
primarily engaged in a Related Business.



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     “Additional Notes” means additional Notes (other than the Notes issued on the Issue
Date) issued under the Indenture pursuant to Section 2.02 of the First Supplemental
Indenture.




     “Adjusted Consolidated Net Tangible Assets” means, with respect to any specified Person
or Persons (all of such specified Persons, whether one or more, being referred to in this
definition as the “Referent Person”), as of the date of determination (without duplication),
the remainder of:




     (a) the sum of:




     (i) discounted future net revenues from proved oil and gas reserves of such
Person and its Restricted Subsidiaries calculated in accordance with SEC guidelines
before any provincial, territorial, state, federal or foreign income taxes, as
estimated by the Company in a reserve report prepared as of the end of the Company’s
most recently completed fiscal year for which audited financial statements are
available and giving effect to applicable Oil and Natural Gas Hedging Contracts, as
increased by, as of the date of determination, the estimated discounted future net
revenues from:




     (A) estimated proved oil and gas reserves acquired since such year end,
which reserves were not reflected in such year-end reserve report; and




     (B) estimated oil and gas reserves attributable to upward revisions of
estimates of proved oil and gas reserves (including previously estimated
development costs incurred during the period and the accretion of discount
since the prior period end) since such year end due to exploration,
development, exploitation or other activities;




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




     (C) estimated proved oil and gas reserves reflected in such reserve
report produced or disposed of since such year end; and




     (D) estimated oil and gas reserves attributable to downward revisions
of estimates of proved oil and gas reserves reflected in such reserve report
since such year end due to changes in geological conditions or other factors
that would, in accordance with standard industry practice, cause such
revisions, in each case described in this clause (i) calculated in
accordance with SEC guidelines and estimated by the Company’s petroleum
engineers or any independent petroleum engineers engaged by the Company for
that purpose;




     (ii) the capitalized costs that are attributable to Oil and Gas Properties of
the Referent Person and its Restricted Subsidiaries to which no proved oil and gas
reserves are attributable, based on the Company’s books and records as of a



6









 







date no earlier than the date of the Company’s latest available annual or
quarterly financial statements;




     (iii) the Net Working Capital of the Referent Person on a date no earlier than
the date of the Company’s latest annual or quarterly financial statements; and




     (iv) the greater of:




     (A) the net book value of other tangible assets of the Referent Person
and its Restricted Subsidiaries, as of a date no earlier than the date of
the Company’s latest annual or quarterly financial statements, and




     (B) the appraised value, as estimated by independent appraisers, of
other tangible assets of the Referent Person and its Restricted
Subsidiaries, as of a date no earlier than the date of the Company’s latest
audited financial statements (provided that the Company shall not be
required to obtain such appraisal solely for the purpose of determining this
value); minus




     (b) the sum of:




     (i) the net book value of any Capital Stock of a Restricted Subsidiary of the
Referent Person that is not owned by the Referent Person or another Restricted
Subsidiary of the Referent Person;




     (ii) to the extent not otherwise taken into account in determining Adjusted
Consolidated Net Tangible Assets of the Referent Person, any net gas-balancing
liabilities of the Referent Person and its Restricted Subsidiaries reflected in the
Company’s latest audited financial statements;




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




     (iv) the discounted future net revenues, calculated in accordance with 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 (a)(i) above, would
be necessary to fully satisfy the payment obligations of the Referent Person and its
Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto).



7









 






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




     “Agent” means any Security Registrar, Paying Agent or Authenticating Agent.




     “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
(including by way of a Production Payment or a sale and leaseback transaction);
provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Restricted Subsidiaries taken
as a whole will be governed by the provisions of Article Eight and/or Section 10.14
of this Indenture and not by the provisions of the Asset Sale covenant set forth in
Section 10.11 of this Indenture; and




     (2) the issuance of Equity Interests in any of the Company’s Restricted
Subsidiaries (other than directors’ qualifying shares) or the sale of Equity
Interests held by the Company or its Subsidiaries in any of its Subsidiaries.




     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 of Equity Interests by a Restricted Subsidiary to the Company
or to a Restricted Subsidiary;




     (4) the sale, lease or other disposition of equipment, inventory, products,
services, accounts receivable or other assets in the ordinary course of business,
including in connection with any compromise, settlement or collection of accounts
receivable, and any sale or other disposition of damaged, worn-out or obsolete
assets or assets that are no longer useful in the conduct of the business of the
Company and its Restricted Subsidiaries;




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




     (6) a Restricted Payment that does not violate Section 10.8 of this Indenture,
including the issuance or sale of Equity Interests or the sale, lease or



8









 







other disposition of products, services, equipment, inventory, accounts
receivable or other assets pursuant to any such Restricted Payment;




     (7) the consummation of a Permitted Investment, including, without limitation,
unwinding any Hedging Obligations, and including the issuance or sale of Equity
Interests or the sale, lease or other disposition of products, services, equipment,
inventory, accounts receivable or other assets pursuant to any such Permitted
Investment;




     (8) a disposition of Hydrocarbons or mineral products inventory in the ordinary
course of business;




     (9) the farm-out, lease or sublease of developed or undeveloped crude oil or
natural gas properties owned or held by the Company or any Restricted Subsidiary in
exchange for crude oil and natural gas properties owned or held by another Person;




     (10) the creation or perfection of a Lien (but not, except as contemplated in
clause (11) below, the sale or other disposition of the properties or assets subject
to such Lien);




     (11) the creation or perfection of a Permitted Lien and the exercise by any
Person in whose favor a Permitted Lien is granted of any of its rights in respect of
that Permitted Lien;




     (12) the licensing or sublicensing of intellectual property, including, without
limitation, licenses for seismic data, in the ordinary course of business and which
do not materially interfere with the business of the Company and its Restricted
Subsidiaries;




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




     (14) any Production Payments and Reserve Sales; provided that all 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 oil and gas properties that are subject thereto;




     (15) the sale or other disposition (regardless of whether in the ordinary
course of business) of oil and gas properties; provided that, at the time of such
sale or other disposition, such properties do not have attributed to them any proved
reserves; and




     (16) any trade or exchange by the Company or any Restricted Subsidiary of
properties or assets used or useful in a Related Business for other



9









 







properties or assets used or useful in a Related Business owned or held by
another Person (including Capital Stock of a Person engaged in a Related Business
that is or becomes a Restricted Subsidiary), including any cash or Cash Equivalents
necessary in order to achieve and exchange equivalent value, provided that the Fair
Market Value of the properties or assets traded or exchanged by the Company or such
Restricted Subsidiary (including any cash or Cash Equivalents to be delivered by the
Company or such Restricted Subsidiary) is reasonably equivalent to the Fair Market
Value of the properties or assets (together with any cash or Cash Equivalents) to be
received by the Company or such Restricted Subsidiary, and provided, further, that
any cash received in the transaction must be applied in accordance with Section
10.11 as if such transaction were an Asset Sale.





     “Asset Sale Offer” has the meaning set forth in Section 10.11 of this Indenture.




     “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 or upon the
occurrence of a subsequent condition. The terms “Beneficially Owns,” “Beneficially Owned”
and “Beneficially Owning” will have a corresponding meaning.




     “Business Day” means any day other than a Legal Holiday.




     “Calculation Date” has the meaning set forth below in the definition of “Fixed Charge
Coverage Ratio.”




     “Capital Lease Obligation” means, at the time any determination is to be made, the
amount of the liability in respect of a capital lease that would at that time be required to
be capitalized on a balance sheet in accordance with GAAP, and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be prepaid by the lessee without payment of a
penalty.




     “Cash Equivalents” means:




     (1) United States dollars;




     (2) Government 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;



10









 






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




     (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) deposits in any currency available for withdrawal on demand with any
commercial bank that is organized under the laws of any country in which the Company
or any Restricted Subsidiary maintains its chief executive office or is engaged in
the Related Business; provided that all such deposits are made in such accounts in
the ordinary course of business.




     “Change of Control” means:




     (1) any “person” or “group” of related persons (as such terms are used in
Section 13(d) of the Exchange Act) is or becomes a Beneficial Owner, directly or
indirectly, of more than 50% of the total voting power of the Voting Stock of the
Company (or its successor by merger, consolidation or purchase of all or
substantially all of its properties or assets) (for the purposes of this clause,
such person or group w be deemed to Beneficially Own any Voting Stock of the Company
held by an entity, if such person or group Beneficially Owns, directly or
indirectly, more than 50% of the voting power of the Voting Stock of such entity);




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




     (3) 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 Restricted Subsidiaries taken as a whole to any “person” (as such
term is used in Section 13(d) of the Exchange Act); or




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



11









 






     “Change of Control Offer” has the meaning set forth in Section 10.14(a) of this
Indenture.




     “Change of Control Payment” has the meaning set forth in Section 10.14(a) of this
Indenture.




     “Change of Control Payment Date” has the meaning set forth in Section 10.14(a) of this
Indenture.




     “Clearstream” means Clearstream Banking, S.A.




     “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) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for taxes
was deducted in computing such Consolidated Net Income; plus




     (2) 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




     (3) exploration and abandonment expense (if applicable) to the extent deducted
in calculating 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, other non-cash expenses and other non-cash items
(excluding any such non-cash expense to the extent that it represents an accrual of
or reserve for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation, depletion,
amortization, impairment and other non-cash expenses were deducted in computing such
Consolidated Net Income; plus




     (5) any interest expense attributable to any Oil and Natural Gas Hedging
Contract, to the extent that such interest expense was deducted in computing such
Consolidated Net Income; minus




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




     (7) 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



12









 







repayments of principal and interest pursuant to Dollar-Denominated Production
Payments;




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




     Notwithstanding the preceding sentence, clauses (1) through (5) relating to amounts of
a Restricted Subsidiary of the referent Person will be added to Consolidated Net Income to
compute Consolidated Cash Flow of such Person only to the extent (and in the same
proportion) that the Net Income of such Restricted Subsidiary was included in calculating
the Consolidated Net Income of such Person and, to the extent the amounts set forth in
clauses (1) through (5) are in excess of those necessary to offset a net loss of such
Restricted Subsidiary or if such Restricted Subsidiary has net income for such period
included in Consolidated Net Income, only if a corresponding amount would be permitted at
the date of determination to be dividended to the referent Person by such Restricted
Subsidiary without prior governmental approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to that Restricted Subsidiary or the holders
of its Capital Stock.




     “Consolidated Net Income” means, with respect to any specified Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; provided that:




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




     (2) the Net Income of any Restricted Subsidiary 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 agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, members or partners;




     (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) that 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;



13









 






     (5) any asset impairment writedowns on oil and gas properties under GAAP or SEC
guidelines will be excluded;




     (6) any non-cash mark-to-market adjustments to assets or liabilities resulting
in unrealized gains or losses in respect of Hedging Obligations (including those
resulting from the application of SFAS 133) shall be excluded; and




     (7) to the extent deducted in the calculation of Net Income, any non-cash or
other charges associated with any premium or penalty paid, write-off of deferred
financing costs or other financial recapitalization charges in connection with
redeeming or retiring any Indebtedness will be excluded.




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




     “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.




     “Credit Facilities” means, with respect to the Company or any of its Restricted
Subsidiaries, one or more debt facilities (including, without limitation, the Senior Credit
Agreement), commercial paper facilities or Debt Issuances providing for revolving credit
loans, term loans, receivables financing (including through the sale of receivables to any
lenders, other financiers or to special purpose entities formed to borrow from (or sell such
receivables to) any lenders or other financiers against such receivables), letters of
credit, bankers’ acceptances, other borrowings or Debt Issuances, in each case, as amended,
restated, modified, renewed, extended, refunded, replaced or refinanced (in each case,
without limitation as to amount), in whole or in part, from time to time (including through
one or more Debt Issuances).




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




     “Debt Issuances” means, with respect to the Company or any Restricted Subsidiary, one
or more issuances after the Issue Date of Indebtedness evidenced by notes, debentures, bonds
or other similar securities or instruments.



14









 






     “De Minimis Amount” means a principal amount of Indebtedness that does not exceed $1.0
million.




     “Default” means any event which is, or after notice or passage of time 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 3.5 of this Indenture, 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.




     “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 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 10.8 of this Indenture. The
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 Restricted Subsidiary” means any Restricted Subsidiary that was formed under
the laws of the United States or any state of the United States or the District of Columbia
or that Guarantees or otherwise provides direct credit support for any Indebtedness of the
Company or any Restricted Subsidiary (other than a Foreign Subsidiary).




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




     “Equity Offering” means (i) an offering for cash by the Company of its Capital Stock
(other than Disqualified Stock), or options, warrants or rights with respect to its



15









 







Capital Stock or (ii) a cash contribution to the Company’s common equity capital from
any Person.




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




     “Exchange Notes” means the Notes issued in an Exchange Offer pursuant to Section 3.5(f)
of this Indenture.




     “Exchange Offer” has the meaning set forth in the applicable Registration Rights
Agreement.




     “Exchange Offer Registration Statement” has the meaning set forth in the applicable
Registration Rights Agreement.




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




     “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. Fair Market Value of an asset or property in excess of $10.0 million shall be
determined by the Board of Directors of the Company acting in good faith, whose
determination shall be conclusive and evidenced by a resolution of such Board of Directors,
and any lesser Fair Market Value may be determined by an officer of the Company acting in
good faith.




     “Farm-In Agreement” means an agreement whereby a Person agrees to pay all or a share of
the drilling, completion or other expenses of an exploratory or development well (which
agreement may be subject to a maximum payment obligation, after which expenses are shared in
accordance with the working or participation interests therein or in accordance with the
agreement of the parties) or perform the drilling, completion or other operation on such
well in exchange for an ownership interest in an oil or gas property.




     “Farm-Out Agreement” means a Farm-In Agreement, viewed from the standpoint of the party
that transfers an ownership interest to another.




     “First Supplemental Indenture” means the First Supplemental Indenture dated as of
February 2, 2011 by and among the Company, each of the Subsidiary Guarantors parties
thereto, and the Trustee.




     “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



16









 







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.




     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 a Related Business), or any
Person or any of its Restricted Subsidiaries acquired by the specified Person or any
of its Restricted Subsidiaries, and including in each case any related financing
transactions and 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 will be given pro forma effect as if they had occurred on
the first day of the four-quarter reference period, and any Consolidated Cash Flow
for such period will be calculated giving pro forma effect to any operating
improvements or cost savings that have occurred or are reasonably expected to occur
in the reasonable judgment of the principal accounting officer or Chief Financial
Officer of the Company (regardless of whether those operating improvements or cost
savings could then be reflected in pro forma financial statements prepared in
accordance with Regulation S-X under the Securities Act or any other regulation or
policy of the SEC 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;




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



17









 






     (6) if any Indebtedness bears a floating rate of interest, the interest expense
on such Indebtedness will be calculated as if the rate in effect on the Calculation
Date had been the applicable rate for the entire period (taking into account any
Hedging Obligation applicable to such Indebtedness, but if the remaining term of
such Hedging Obligation is less than 12 months, then such Hedging Obligation shall
only be taken into account for that portion of the period equal to the remaining
term thereof).




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




     (1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (excluding (i) any interest
attributable to Production Payments and Reserve Sales, (ii) write-off of deferred
financing costs and (iii) 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, noncash interest payments, the interest
component of any deferred payment obligations other than that attributable to any
Oil and Natural Gas Hedging Contract, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers’ acceptance financings),
and net of the effect of all payments made or received pursuant to Interest Rate
Agreements; 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 the
specified Person or one or more of its Restricted Subsidiaries or secured by a Lien
on assets of such specified Person or one or more of its Restricted Subsidiaries,
regardless of whether such Guarantee or Lien is called upon; plus




     (4) all dividends, whether paid or accrued and regardless of whether in cash,
on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary,




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




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




     “GAAP” means generally accepted accounting principles in the United States, which are
in effect from time to time. All ratios and computations based on GAAP contained in this
Indenture will be computed in conformity with GAAP. At any time after the Issue Date, the
Company may elect to apply International Financial Reporting



18









 







Standards (“IFRS”), accounting principles in lieu of GAAP and, upon any such election,
references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise
provided in the Indenture); provided that any such election, once made, shall be
irrevocable; provided, further, that any calculation or determination in this Indenture that
requires the application of GAAP for periods that include fiscal quarters ended prior to the
Company’s election to apply IFRS shall remain as previously calculated or determined in
accordance with GAAP. The Company shall give notice of any such election made in accordance
with this definition to the Trustee and the Holders of the Notes.




     “Global Note Legend” means the legend set forth in Section 3.5(g)(2) of this Indenture,
which is required to be placed on all Global Notes issued under this Indenture.




     “Global Notes” means, individually and collectively, each of the Restricted Global
Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the
name of the Depositary or its nominee, substantially in the form of Exhibit A hereto
and that bear the Global Note Legend and that have the “Schedule of Exchanges of Interests
in the Global Note” attached thereto, issued in accordance with Section 2.01 of the First
Supplemental Indenture and Sections 3.5(b)(3), 3.5(b)(4), 3.5(d) or 3.5(f) of this
Indenture.




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




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




     “Hedging Obligations” of any Person means the obligations of such Person pursuant to
any Interest Rate and Currency Hedges and any Oil and Natural Gas Hedging Contracts.




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




     “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



19









 







be issued in a denomination equal to the outstanding principal amount of the Notes
transferred to Institutional Accredited Investors in compliance with the Securities Act.




     “Indebtedness” means, with respect to any specified Person, without duplication, any
indebtedness of such Person, regardless of whether contingent:




     (1) in respect of borrowed money;




     (2) evidenced by bonds, notes, credit agreements, 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;




     (5) in respect of any Guarantee by such Person of production or payment with
respect to a Production Payment (but not any other contractual obligation in respect
of such Production Payment);




     (6) 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, except any such balance that constitutes an accrued
expense or a trade payable; or




     (7) representing any Interest Rate and Currency Hedges,


if and to the extent any of the preceding items (other than letters of credit and Interest
Rate and Currency Hedges) would appear as a liability upon a balance sheet of the specified
Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes (a)
all Indebtedness of any other Person, of the types described in clauses (1) through (7)
above, secured by a Lien on any asset of the specified Person (regardless of whether such
Indebtedness is assumed by the specified Person), provided that the amount of such
Indebtedness will be the lesser of (i) the Fair Market Value of such asset at such date of
determination and (ii) the amount of such Indebtedness of such other Person, and (b) to the
extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of
any other Person, of the types described above in clauses (1) through (7) above.
Furthermore, the amount of any Indebtedness outstanding as of any date will be the accreted
value thereof, in the case of any Indebtedness issued with original issue discount; and the
principal amount thereof, together with any interest thereon that is more than 30 days past
due, in the case of any other Indebtedness.





     Notwithstanding the foregoing, the following shall not constitute “Indebtedness”:




     (i) accrued expenses and trade accounts payable arising in the ordinary course
of business;



20









 






     (ii) except as provided in clause (5) of the first paragraph of this
definition, any obligation in respect of any Production Payment and Reserve Sales;




     (iii) any obligation in respect of any Farm-In Agreement;




     (iv) any indebtedness which has been defeased in accordance with GAAP or
defeased pursuant to the deposit of cash or Government Securities (in an amount
sufficient to satisfy all such indebtedness obligations at maturity or redemption,
as applicable, and all payments of interest and premium, if any) in a trust or
account created or pledged for the sole benefit of the holders of such indebtedness,
and subject to no other Liens, and the other applicable terms of the instrument
governing such indebtedness;




     (v) oil or natural gas balancing liabilities incurred in the ordinary course of
business and consistent with past practice;




     (vi) any obligation in respect of any Oil and Natural Gas Hedging Contract;




     (vii) any unrealized losses or charges in respect of Hedging Obligations
(including those resulting from the application of the Financial Standards
Accounting Board’s Accounting Standards Codification (ASC) 815);




     (viii) any obligations in respect of (a) bid, performance, completion, surety,
appeal and similar bonds, (b) obligations in respect of bankers acceptances, (c)
insurance obligations or bonds and other similar bonds and obligations and (d) any
Guaranties or letters of credit functioning as or supporting any of the foregoing
bonds or obligations; provided, however, that such bonds or obligations mentioned in
subclause (a), (b), (c) or (d) of this clause (viii), are incurred in the ordinary
course of the business of the Company and its Restricted Subsidiaries and do not
relate to obligations for borrowed money;




     (ix) any Disqualified Stock of the Company or preferred stock of a Restricted
Subsidiary;




     (x) any obligation arising from any agreement providing for indemnities,
guarantees, purchase price adjustments, holdbacks, contingency payment obligations
based on the performance of the acquired or disposed assets or similar obligations
(other than Guarantees of Indebtedness) incurred by any Person in connection with
the acquisition or disposition of assets; and




     (xi) all contracts and other obligations, agreements instruments or
arrangements described in clauses (20), (21), (22) and (23) of the definition of
“Permitted Liens.”




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



21









 






     “Initial Notes” means the Notes issued on the Issue Date.




     “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.




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




     “Interest Rate and Currency Hedges” of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.




     “Investment Grade Rating” means a rating equal to or higher than:




	 	(1)	 	Baa3 (or the equivalent) by Moody’s; or
	 
	 	(2)	 	BBB- (or the equivalent) 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 Rating Agency.




     “Investment Grade Rating Event” means the first day on which (a) the Notes have an
Investment Grade Rating from at least two Rating Agencies, (b) no Default with respect to
the Notes has occurred and is then continuing under this Indenture and (c) the Company has
delivered to the Trustee an Officers’ Certificate certifying as to the satisfaction of the
conditions set forth in clauses (a) and (b) of this definition.




     “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 endorsements
of negotiable instruments and documents in the ordinary course of business, and commission,
travel and similar advances to officers, employees and consultants made in the ordinary
course of business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet of such Person prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary, 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 Restricted Subsidiary that
were not sold or disposed of in an amount determined as provided in Section 10.8(d) of this
Indenture. The acquisition by the Company or any 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 Subsidiary in



22









 







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 Section
10.8(d) of this Indenture. 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.




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




     “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in
the City of New York or at a place of payment are authorized by law, regulation or executive
order to remain closed.




     “Letter of Transmittal” means the letter of transmittal to be prepared by the Company
and sent to all Holders of the Notes for use by such Holders in connection with an Exchange
Offer.




     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, regardless of whether 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 any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction other than a precautionary financing statement respecting a lease not intended
as a security agreement.




     “Material Domestic Subsidiary” means any Domestic Restricted Subsidiary having
Consolidated Tangible Assets that constitute more than 0.5% of the Company’s Consolidated
Tangible Assets.




     “Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency
business thereof.




     “Net Income” means, with respect to any specified Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect of non-cash
preferred stock dividends, excluding, however:




     (1) any gain or loss, together with any related provision for taxes on such
gain or loss, realized in connection with: (a) any Asset Sale (including, without
limitation, any cash received pursuant to any sale and leaseback transaction) or
(b) the disposition of any securities by such Person or the extinguishment of any
Indebtedness of such Person; and




     (2) any extraordinary gain or loss, together with any related provision for
taxes on such extraordinary gain or loss.




     “Net Proceeds” means the aggregate cash proceeds received by the Company or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without



23









 







limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of:




     (1) all legal, accounting, investment banking, title and recording tax
expenses, commissions and other fees and expense incurred, and all federal, state,
provincial, foreign and local taxes required to be paid or accrued as a liability
under GAAP (after taking into account any available tax credits or deductions and
any tax sharing agreements), as a consequence of such Asset Sale;




     (2) all payments made on any Indebtedness which is secured by any assets
subject to such Asset Sale, in accordance with the terms of such Indebtedness, or
which must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law be repaid out of the proceeds from such Asset Sale;




     (3) all distributions and other payments required to be made to holders of
minority interests in Subsidiaries or joint ventures as a result of such Asset Sale;
and




     (4) the deduction of appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, or held in escrow, in either case for adjustment
in respect of the sale price or for any liabilities associated with the assets
disposed of in such Asset Sale and retained by the Company or any Restricted
Subsidiary after such Asset Sale.




     “Net Working Capital” means (a) all current assets of the Company and its Restricted
Subsidiaries except current assets from Oil and Natural 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 gas properties and (iii) any current liabilities
from Oil and Natural 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 the Financial Standards Accounting Board’s Accounting Standards
Codification (ASC) 815).




     “Non-Recourse Debt” means Indebtedness:




     (1) as to which neither the Company nor any Restricted Subsidiary (a) provides
any Guarantee or credit support of any kind (including any undertaking, Guarantee,
indemnity, agreement or instrument that would constitute Indebtedness) or (b) is
directly or indirectly liable (as a guarantor or otherwise), in each case other than
Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any
joint venture owned by the Company or any Restricted Subsidiary to the extent
securing otherwise Non-Recourse Debt of such Unrestricted Subsidiary or joint
venture;




     (2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted



24









 







Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or any Restricted Subsidiary to declare a default
under such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its Stated Maturity; and




     (3) the explicit terms of which provide there is no recourse against any of the
assets of the Company or its Restricted Subsidiaries, except for any Equity
Interests referred to in clause (1) of this definition.




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




     “Notes” means a series of Securities designated as the Company’s 7.25% Senior Notes due
2019, issued pursuant to the Original Indenture, as amended and supplemented by the First
Supplemental Indenture.




     “Notice of Default” means a written notice of the kind specified in Section 5.1(a)(iv)
or Section 5.1(a)(v) of this Indenture.




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




     “Offer Amount” has the meaning set forth in Section 10.11(g) of this Indenture.




     “Offer Period” has the meaning set forth in Section 10.11(g) of this Indenture.




     “Oil and Natural Gas Hedging Contract” means any Hydrocarbon hedging agreements and
other agreements or arrangements entered into in the ordinary course of business in the oil
and gas industry for the purpose of protecting against fluctuations in Hydrocarbon prices.




     “Original Indenture” means the Indenture dated as of February 2, 2011 by and between
the Company and the Trustee.




     “OPNA” means Oasis Petroleum North America LLC, a Delaware limited liability company
and a Subsidiary of Oasis.




     “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).




     “Participating Broker-Dealer” has the meaning set forth in the Registration Rights
Agreement.




     “Permitted Acquisition Indebtedness” means Indebtedness or Disqualified Stock of the
Company or any of the Company’s Restricted Subsidiaries to the extent such Indebtedness or
Disqualified Stock was Indebtedness or Disqualified Stock of:



25









 






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




     (2) a Person that was merged or consolidated into the Company or a Restricted
Subsidiary;


provided that on the date such Subsidiary became a Restricted Subsidiary or the date such
Person was merged or consolidated into the Company or a Restricted Subsidiary, as
applicable, after giving pro forma effect thereto,





     (a) the Restricted Subsidiary or the Company, as applicable, would be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 10.10(a) of this
Indenture, or




     (b) the Fixed Charge Coverage Ratio for the Company would be greater
than the Fixed Charge Coverage Ratio for the Company immediately prior to
such transaction.




     “Permitted Business Investments” means Investments and expenditures made in the
ordinary course of, and of a nature that is or shall have become customary in, a Related
Business as means of actively exploiting, exploring for, acquiring, developing, processing,
gathering, marketing or transporting oil, natural gas, other Hydrocarbons and minerals
(including with respect to plugging and abandonment) through agreements, transactions,
interests or arrangements that permit one to share risks or costs of such activities or
comply with regulatory requirements regarding local ownership, including without limitation:
(a) ownership interests in oil, natural gas, other Hydrocarbons and minerals properties,
liquefied natural gas facilities, processing facilities, gathering systems, pipelines,
storage facilities or related systems or ancillary real property interests; (b) Investments
in the form of or pursuant to operating agreements, working interests, royalty interests,
mineral leases, processing agreements, Farm-In Agreements, Farm-Out Agreements, contracts
for the sale, transportation or exchange of oil, natural gas and other Hydrocarbons and
minerals, production sharing agreements, participation agreements, development agreements,
area of mutual interest agreements, unitization agreements, pooling agreements, joint
bidding agreements, service contracts, joint venture agreements, partnership agreements
(whether general or limited), subscription agreements, stock purchase agreements,
stockholder agreements and other similar agreements (including for limited liability
companies) with third parties; and (c) direct or indirect ownership interests in drilling
rigs and related equipment, including, without limitation, transportation equipment.




     “Permitted Investments” means:




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




     (2) any Investment in Cash Equivalents;



26









 






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




     (a) such Person becomes a Restricted Subsidiary; or




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




     (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 10.11 of
this Indenture;




     (5) 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 with
Persons who are not Affiliates;




     (6) Investments represented by Hedging Obligations;




     (7) advances to or reimbursements of employees for moving, entertainment and
travel expenses, drawing accounts and similar expenditures in the ordinary course of
business, in each case to the extent they constitute Investments;




     (8) loans or advances to employees in the ordinary course of business or
consistent with past practice, in each case to the extent they constitute
Investments;




     (9) advances and prepayments for asset purchases in the ordinary course of
business in a Related Business of the Company or any of its Restricted Subsidiaries;




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




     (11) surety and performance bonds and workers’ compensation, utility, lease,
tax, performance and similar deposits and prepaid expenses in the ordinary course of
business;




     (12) guarantees by the Company or any of its Restricted Subsidiaries of
operating leases (other than Capital Lease Obligations) or of other obligations that



27









 







do not constitute Indebtedness, in each case entered into by the Company or any
such Restricted Subsidiary in the ordinary course of business;




     (13) Investments of a Restricted Subsidiary acquired after the Issue Date or of
any entity merged into the Company or merged into or consolidated with a Restricted
Subsidiary in accordance with Article Eight or Section 14.4 (as applicable) of this
Indenture to the extent that such Investments were not made in contemplation of or
in connection with such acquisition, merger or consolidation and were in existence
on the date of such acquisition, merger or consolidation;




     (14) Permitted Business Investments;




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




     (16) Investments in any units of any oil and gas royalty trust;




     (17) Investments existing on the Issue Date, and any extension, modification or
renewal of any such Investments existing on the Issue Date, but only to the extent
not involving additional advances, contributions or other Investments of cash or
other assets or other increases of such Investments (other than as a result of the
accrual or accretion of interest or original issue discount or the issuance of
pay-in-kind securities, in each case, pursuant to the terms of such Investments as
in effect on the Issue Date);




     (18) repurchases of or other Investments in the Notes; and




     (19) 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 (19) that are at the time outstanding not to exceed the
greater of (a) 3.0% of Adjusted Consolidated Net Tangible Assets or (b) $20.0
million.




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




     (1) Liens securing Indebtedness incurred under Credit Facilities pursuant to
clause (i) of Section 10.10(b) of this Indenture; provided that the aggregate amount
of such indebtedness does not exceed the aggregate amount that would be allowed
under clause (i) of Section 10.10(b) of this Indenture;




     (2) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (iv) of Section 10.10(b) of this Indenture covering only the
assets acquired with or financed by such Indebtedness;




     (3) pledges or deposits by such Person under workers’ compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits



28









 







in connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits or cash or United States
government bonds to secure surety or appeal bonds to which such Person is a party,
or deposits as security for contested taxes or import or customs duties or for the
payment of rent, in each case incurred in the ordinary course of business;




     (4) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or similar Liens arising by contract or statute in the ordinary course
of business and with respect to amounts which are not yet delinquent or are being
contested in good faith by appropriate proceedings;




     (5) Liens for taxes, assessments or other governmental charges or which are
being contested in good faith by appropriate proceedings provided appropriate
reserves required pursuant to GAAP have been made in respect thereof;




     (6) Liens in favor of the issuers of surety or performance bonds or bankers’
acceptances issued pursuant to the request of and for the account of such Person in
the ordinary course of its business;




     (7) encumbrances, easements or reservations of, or rights of others for,
licenses, rights of way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the use of real
properties or Liens incidental to the conduct of the business of such Person or to
the ownership of its properties which do not in the aggregate materially adversely
affect the value of said properties or materially impair their use in the operation
of the business of such Person;




     (8) leases and subleases of real property which do not materially interfere
with the ordinary conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole;




     (9) any attachment or judgment Liens not giving rise to an Event of Default;




     (10) Liens for the purpose of securing the payment of all or a part of the
purchase price of, or Capital Lease Obligations with respect to, or the repair,
improvement or construction cost of, assets or property acquired or repaired,
improved or constructed in the ordinary course of business; provided that:




     (a) the aggregate principal amount of Indebtedness secured by such
Liens is otherwise permitted to be incurred under this Indenture and does
not exceed the cost of the assets or property so acquired or repaired,
improved or constructed plus fees and expenses in connection therewith; and



29









 






     (b) such Liens are created within 180 days of repair, improvement or
construction or acquisition of such assets or property and do not encumber
any other assets or property of the Company or any Restricted Subsidiary
other than such assets or property and assets affixed or appurtenant thereto
(including improvements);




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




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




     (b) such deposit account is not intended by the Company or any
Restricted Subsidiary to provide collateral to the depository institution;




     (12) Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Company and its Restricted
Subsidiaries in the ordinary course of business;




     (13) Liens existing on the Issue Date;




     (14) Liens on property at the time the Company or a Restricted Subsidiary
acquired the property, including any acquisition by means of a merger or
consolidation with or into the Company or a Restricted Subsidiary; provided,
however, that such Liens are not created, incurred or assumed in connection with, or
in contemplation of, such acquisition; provided further, however, that such Liens
may not extend to any other property owned by the Company or any Restricted
Subsidiary other than those of the Person merged or consolidated with the Company or
such Restricted Subsidiary;




     (15) Liens on property or Capital Stock of a Person at the time such Person
becomes a Restricted Subsidiary; provided, however, that such Liens are not created,
incurred or assumed in connection with, or in contemplation of, such other Person
becoming a Restricted Subsidiary; provided further, however, that such Liens may not
extend to any other property owned by the Company or any Restricted Subsidiary;




     (16) Liens securing Indebtedness or other obligations of a Restricted
Subsidiary owing to the Company or a Subsidiary Guarantor;




     (17) Liens securing the Notes, the Subsidiary Guarantees and other obligations
arising under this Indenture;



30









 






     (18) Liens securing Permitted Refinancing Indebtedness of the Company or a
Restricted Subsidiary incurred to refinance Indebtedness of the Company or a
Restricted Subsidiary that was previously so secured; provided that any such Lien is
limited to all or part of the same property or assets (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof) that secured
(or, under the written arrangements under which the original Lien arose, could
secure) the Indebtedness being refinanced or is in respect of property or assets
that is the security for a Permitted Lien hereunder;




     (19) Liens in respect of Production Payments and Reserve Sales;




     (20) Liens on pipelines and pipeline facilities that arise by operation of law;




     (21) Liens arising under joint venture agreements, partnership agreements, oil
and gas leases or subleases, assignments, purchase and sale agreements, division
orders, contracts for the sale, purchasing, processing, transportation or exchange
of oil or natural gas, unitization and pooling declarations and agreements,
development agreements, area of mutual interest agreements, licenses, sublicenses,
net profits interests, participation agreements, Farm-Out Agreements, Farm-In
Agreements, carried working interest, joint operating, unitization, royalty, sales
and similar agreements relating to the exploration or development of, or production
from, oil and gas properties entered into in the ordinary course of business in a
Related Business;




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




     (23) Liens on, or related to, properties or assets to secure all or part of the
costs incurred in the ordinary course of a Related Business for exploration,
drilling, development, production, processing, transportation, marketing, storage,
abandonment or operation;




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




     (25) Liens securing obligations of the Company and its Restricted Subsidiaries
under non-speculative Hedging Obligations;




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



31









 






     (27) Liens securing Indebtedness of any Foreign Subsidiary which Indebtedness
is permitted by this Indenture; and




     (28) Liens incurred in the ordinary course of business of the Company or any
Restricted Subsidiary with respect to obligations that, at any one time outstanding,
do not exceed the greater of (a) $10.0 million and (b) 1.0% of Adjusted Consolidated
Net Tangible Assets of the Company.




     “Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of
its Restricted Subsidiaries, any Disqualified Stock of the Company or any preferred stock of
any Restricted Subsidiary (a) issued in exchange for, or the net proceeds of which are used
to extend, renew, refund, refinance, replace, defease, discharge or otherwise retire for
value, in whole or in part, or (b) constituting an amendment, modification or supplement to
or a deferral or renewal of ((a) and (b) above, collectively, a “Refinancing”), any other
Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany
Indebtedness), any Disqualified Stock of the Company or any preferred stock of a Restricted
Subsidiary in a principal amount or, in the case of Disqualified Stock of the Company or
preferred stock of a Restricted Subsidiary, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection with the
Refinancing) the lesser of:




     (1) the principal amount or, in the case of Disqualified Stock or preferred
stock, liquidation preference, of the Indebtedness, Disqualified Stock or preferred
stock so Refinanced (plus, in the case of Indebtedness, the amount of premium, if
any paid in connection therewith), and




     (2) if the Indebtedness being Refinanced was issued with any original issue
discount, the accreted value of such Indebtedness (as determined in accordance with
GAAP) at the time of such Refinancing.




     Notwithstanding the preceding, no Indebtedness, Disqualified Stock or preferred stock
will be deemed to be Permitted Refinancing Indebtedness, unless:




     (1) such Indebtedness, Disqualified Stock or preferred stock has a final
maturity date or redemption date, as applicable, no earlier than the final maturity
date or redemption date, as applicable, of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness, Disqualified Stock or preferred stock being Refinanced;




     (2) if the Indebtedness, Disqualified Stock or preferred stock being Refinanced
is contractually subordinated or otherwise junior in right of payment to the Notes,
such Indebtedness, Disqualified Stock or preferred stock has a final maturity date
or redemption date, as applicable, no earlier than the final maturity date or
redemption date, as applicable, of, and is contractually subordinated or otherwise
junior in right of payment to, the Notes, on terms at least as favorable to the
Holders of Notes as those contained in the documentation governing the



32









 







Indebtedness, Disqualified Stock or preferred stock being Refinanced at the
time of the Refinancing; and




     (3) such Indebtedness or Disqualified Stock is incurred or issued by the
Company or such Indebtedness, Disqualified Stock or preferred stock is incurred or
issued by the Restricted Subsidiary who is the obligor on the Indebtedness being
Refinanced or the issuer of the Disqualified Stock or preferred stock being
Refinanced; provided that a Restricted Subsidiary that is also a Subsidiary
Guarantor may guarantee Permitted Refinancing Indebtedness incurred by the Company,
regardless of whether such Restricted Subsidiary was an obligor or guarantor of the
Indebtedness being Refinanced.




     “Private Placement Legend” means the legend set forth in Section 3.5(f)(1) of this
Indenture to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.




     “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 a
Subsidiary of the Company 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, 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 and other providers of technical services
to the Company or a Subsidiary of the Company.




     “Purchase Date” has the meaning set forth in Section 10.11(g) of this Indenture.




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




     “Rating Agency” means each of S&P and Moody’s, or if (and only if) S&P or Moody’s or
both shall not make a rating on the notes publicly available, a nationally recognized
statistical rating agency or agencies, as the case may be, selected by the Company, which
shall be substituted for S&P or Moody’s, or both, as the case may be.




     “Registration Rights Agreement” means (i) with respect to the Initial Notes, that
certain registration rights agreement dated as of the Issue Date by and among the Company,
the Subsidiary Guarantors and the initial purchasers set forth therein, and (ii) with
respect to each issuance of Additional Notes issued in a transaction exempt from the
registration requirements of the Securities Act, the registration rights agreement, if any,
among the Company, the Subsidiary Guarantors and the Persons purchasing such Additional
Notes under the related purchase agreement.




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



33









 






     “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.




     “Related Business” means any business which is the same as or related, ancillary or
complementary to any of the businesses of the Company and its Restricted Subsidiaries on the
Issue Date, which includes (a) the acquisition, exploration, exploitation, development,
production, operation and disposition of interests in oil, gas and other hydrocarbon
properties, and the utilization of the Company’s and its Restricted Subsidiaries’
properties, (b) the gathering, marketing, treating, processing, storage, refining, selling
and transporting of any production from such interests or properties and products produced
in association therewith, (c) any power generation and electrical transmission business, (d)
oil field sales and services and related activities, (e) development, purchase and sale of
real estate and interests therein, and (f) any business or activity relating to, arising
from, or necessary, appropriate or incidental to the activities described in the foregoing
clauses (a) through (e) of this definition.




     “Reporting Failure” means the failure of the Company to file with the SEC and make
available or otherwise deliver to the Trustee and each Holder of Notes, within the time
periods specified in Section 10.6 of this Indenture (after giving effect to any grace period
specified under Rule 12b-25 under the Exchange Act), the periodic reports, information,
documents or other reports that the Company may be required to file with the SEC pursuant to
such provision.




     “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 any Investment other than a Permitted Investment.




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




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



34









 






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




     “Senior Credit Agreement” means the Amended and Restated Credit Agreement dated as of
February 26, 2010, as amended by that certain First Amendment to Amended and Restated Credit
Agreement and Consent dated as of June 3, 2010, as further amended by the Second Amendment
to Amended and Restated Credit Agreement and Consent dated as of August 11, 2010, and as
further amended by the Third Amendment to Amended and Restated Credit Agreement and Limited
Waiver dated as of January 21, 2011, among (i) OPNA, as borrower, (ii) the Company and Oasis
Petroleum LLC, a Delaware limited liability company and a Subsidiary of the Company, as
guarantors, (iii) BNP Paribas, as administrative agent and lender, and (iv) the lenders
party thereto from time to time, and any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as amended,
restated, modified, supplemented, increased, renewed, refunded, replaced (including
replacement after the termination of such credit facility), supplemented, restructured or
refinanced in whole or in part from time to time in one or more agreements or instruments.




     “Senior Debt” means:




     (1) all Indebtedness of the Company or any of its Restricted Subsidiaries
outstanding under Credit Facilities and all Hedging Obligations with respect
thereto;




     (2) the Notes and any other Indebtedness of the Company or any of its
Restricted Subsidiaries permitted to be incurred under the terms of this Indenture,
unless the instrument under which such Indebtedness is incurred expressly provides
that it is subordinated in right of payment to the Notes or any Subsidiary
Guarantee; and




     (3) all Obligations with respect to the items listed in the preceding clauses
(1) and (2).




     Notwithstanding anything to the contrary in the preceding sentence, Senior Debt will
not include:




     (a) any intercompany Indebtedness of the Company or any of its
Subsidiaries to the Company or any of its Affiliates;




     (b) any Indebtedness that is incurred in violation of this Indenture;
or




     (c) any trade payables or taxes owed or owing by the Company or any
Restricted Subsidiary.




     “Shelf Registration Statement” means a Shelf Registration Statement as defined in a
Registration Rights Agreement.



35









 






     “Significant Subsidiary” means any Restricted Subsidiary that would be a “significant
subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X under the
Securities Act.




     “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 documentation governing such Indebtedness as of its issue date,
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.




     “Subordinated Debt” means Indebtedness of the Company or a Subsidiary Guarantor that is
contractually subordinated in right of payment (by its terms or the terms of any document or
instrument relating thereto), to the Notes or the Subsidiary Guarantee of such Subsidiary
Guarantor, as applicable.




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




     (1) any corporation, association or other business entity (other than a
partnership) 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 (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are that Person or one or more Subsidiaries of that Person
(or any combination thereof).




     “Subsidiary Guarantee” means any Guarantee of the Notes by any Subsidiary Guarantor in
accordance with Article Fourteen of this Indenture.




     “Subsidiary Guarantor” means each Restricted Subsidiary that has become obligated under
a Subsidiary Guarantee, in accordance with the terms of the Guarantee provisions of this
Indenture, but only for so long as such Subsidiary remains so obligated pursuant to the
terms of this Indenture.




     “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 (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 such Board of Directors,
but only to the extent that such Subsidiary:




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




36











 






     (2) 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




     (3) 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 or credit support would be released upon such
designation.



     Any Subsidiary of an Unrestricted Subsidiary shall also be an Unrestricted Subsidiary.



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



     “Voting Stock” of any specified Person as of any date means the Capital Stock of such
Person that is at the time entitled (without regard to the occurrence of any contingency and
after giving effect to any voting agreement or stockholders’ agreement that effectively
transfers voting power) to vote in the election of the Board of Directors of such Person.



     “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any
date, the number of years obtained by dividing:




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




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



     SECTION 3.02. References to Liquidated Damages.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, the Original Indenture is hereby amended such that each reference to “interest”
appearing therein shall be deemed to refer to “interest and Liquidated Damages, if any.”



     SECTION 3.03. Registration, Registration of Transfer and Exchange.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, Section 3.5 of the Original Indenture is hereby amended (i) to permit any Restricted
Subsidiary of the Company to serve as Security Registrar and (ii) to add the following language at
the end of such Section.



37









 





     Notwithstanding the foregoing paragraphs of this Section 3.5, the terms and provisions set
forth in the following clauses (a) through (h) shall also apply to the Notes. To the extent that
any of the terms and provisions of the following clauses (a) through (h) conflict with the express
provisions of the foregoing paragraphs of this Section 3.5, the terms and provisions of such
clauses (a) through (h) shall govern and be controlling.



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




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




     (2) the Company in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written notice to such
effect to the Trustee; provided that in no event shall the Regulation S Global Note be
exchanged by the Company for Definitive Notes prior to the expiration of the Restricted
Period; or




     (3) a Default or Event of Default has occurred and is continuing and the Depositary
notifies the Trustee of its decision to exchange the Global Notes for Definitive Notes.



     Upon the occurrence of any of the preceding events in (1), (2) or (3) 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 3.4 and 3.6 of this
Indenture. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or
any portion thereof, pursuant to this Section 3.5 or Sections 3.4 and 3.6 of this Indenture, 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 3.5(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in Section 3.5(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:



38









 






     (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. 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 Security Registrar to effect the transfers
described in this Section 3.5(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 3.5(b)(1) above, the transferor of such beneficial interest must deliver to the
Security Registrar either:




     (A) both:




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




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




     (B) both:




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




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


Upon consummation of an Exchange Offer by the Company in accordance with Section 3.5(f) hereof, the
requirements of this Section 3.5(b)(2) shall be deemed to have been satisfied upon receipt by the
Security Registrar of the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. 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 3.5(h) hereof.







39









 









     (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 3.5(b)(2) above and the Security
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




     (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 3.5(b)(2) above and:




     (A) such exchange or transfer is effected pursuant to an Exchange Offer
in accordance with the applicable Registration Rights Agreement and the
holder of the beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a Participating
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule
144) of the Company;




     (B) such transfer is effected pursuant to a Shelf Registration
Statement in accordance with the applicable Registration Rights Agreement;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant
to an Exchange Offer Registration Statement in accordance with the
applicable Registration Rights Agreement; or




     (D) the Security Registrar receives the following:




     (i) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial



40









 







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




     (ii) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a 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 set forth in this subparagraph (D), if the Security
Registrar so requests or if the Applicable Procedures so require, an Opinion
of Counsel in form reasonably acceptable to the Security 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 subparagraph (B) or (D) above at a time when an
Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of a
Company Order in accordance with Section 3.3 of this Indenture, 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 subparagraph (B) or (D) above.



     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 Security Registrar of the following documentation:




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




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



41









 






     (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 3.5(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 3.5(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 Security 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 3.5(c)(1) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained therein.





     (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:




     (A) such exchange or transfer is effected pursuant to an Exchange Offer
in accordance with the applicable Registration Rights Agreement and the
holder of such beneficial interest, in the case of an



42









 







exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a Participating
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in Rule
144) of the Company;




     (B) such transfer is effected pursuant to a Shelf Registration
Statement in accordance with the applicable Registration Rights Agreement;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant
to an Exchange Offer Registration Statement in accordance with the
applicable Registration Rights Agreement; or




     (D) the Security Registrar receives the following:




     (i) 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




     (ii) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of 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 subparagraph (D), if the Security
Registrar so requests or if the Applicable Procedures so require, an Opinion
of Counsel in form reasonably acceptable to the Security 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 a Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction
of the conditions set forth in Section 3.5(b)(2) hereof, the Trustee will cause the
aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant
to Section 3.5(h) hereof, and the Company will execute and the Trustee will authenticate and
deliver to the Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 3.5(c)(3) will be registered in such name or names and in such authorized
denomination or denominations as the holder



43









 







of such beneficial interest requests through instructions to the Security 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 3.5(c)(3) will not bear the Private Placement Legend.



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




     (1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If
any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Security 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 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 Restricted Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the



44









 







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:




     (A) such exchange or transfer is effected pursuant to an Exchange Offer
in accordance with the applicable Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not
(i) a Participating Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Company;




     (B) such transfer is effected pursuant to a Shelf Registration
Statement in accordance with the applicable Registration Rights Agreement;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant
to an Exchange Offer Registration Statement in accordance with the
applicable Registration Rights Agreement; or




     (D) the Security Registrar receives the following:




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




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




and, in each such case set forth in this subparagraph (D), if the Security Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Security Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer



45









 







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
3.5(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 subparagraphs (2)(B), (2)(D) or (3) above at a time when an
Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt
of a Company Order in accordance with Section 3.3 of this Indenture, 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 3.5(e), the
Security 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
Security Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Security Registrar duly executed by such Holder or by its
attorney, duly authorized in writing. In addition, the requesting Holder must provide any
additional certifications, documents and information, as applicable, required pursuant to the
following provisions of this Section 3.5(e).




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



46









 







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:




     (A) such exchange or transfer is effected pursuant to an Exchange Offer
in accordance with the applicable Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not
(i) a Participating Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Company;




     (B) such transfer is effected pursuant to a Shelf Registration
Statement in accordance with the applicable Registration Rights Agreement;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant
to an Exchange Offer Registration Statement in accordance with the
applicable Registration Rights Agreement; or




     (D) the Security Registrar receives the following:




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




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




and, in each such case set forth in this subparagraph (D), if the Security
Registrar so requests, an Opinion of Counsel in form reasonably acceptable
to the Security 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



47









 







register such a transfer, the Security Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.



     (f) Exchange Offer. Upon the occurrence of an Exchange Offer in accordance with the
applicable Registration Rights Agreement, the Company will issue and, upon receipt of a Company
Order in accordance with Section 3.3 of this Indenture, the Trustee will authenticate:




     (1) one or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes accepted for
exchange in the Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that (A) they are not Participating Broker-Dealers, (B) they are not
participating in a distribution of the Exchange Notes and (C) they are not affiliates (as
defined in Rule 144) of the Company; and




     (2) Unrestricted Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange
Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not
Participating Broker-Dealers, (B) they are not participating in a distribution of the
Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the Company.



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



     (g) Legends. The following legends 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.




     (1) Private Placement Legend.




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


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



THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON NOTE OF ANY
INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED NOTES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE,






48









 







PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A
NOTES: ONE YEAR (OR SUCH SHORTER PERIOD THEN REQUIRED UNDER RULE 144 OR ITS SUCCESSOR RULE); OR IN
THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON IT REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.



IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT
IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT. AS
USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “UNITED STATES PERSON” HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”





     (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraphs (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or
(f) of this Section 3.5 (and all Notes issued in exchange therefor or substitution
thereof) will not bear the Private Placement Legend.




     (2) 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 3.5 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE






49









 







BUT NOT IN PART PURSUANT TO SECTION 3.5(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.9 OF THE INDENTURE AND (4) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.



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




     (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 3.9 of this
Indenture. 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.




     (1) To permit registrations of transfers and exchanges, the Company will execute and
the Trustee will authenticate Global Notes and Definitive Notes upon receipt of a Company
Order in accordance with Section 3.3 of this Indenture or at the Security Registrar’s
request.




     (2) 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



50









 







exchange, but the Company may require payment of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to
Sections 3.4, 9.8, 10.12, 10.15 and 11.6 of this Indenture).




     (3) All certifications, certificates and Opinions of Counsel required to be submitted
to the Security Registrar pursuant to this Section 3.5 to effect a registration of transfer
or exchange may be submitted by facsimile.




     (4) 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 Company,
evidencing the same debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.




     (5) Neither the Security Registrar nor the Company 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 11.2 of this Indenture and ending at the close
of business on the day of selection;




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




     (C) to register the transfer of or to exchange a Note between a record date and
the next succeeding Interest Payment Date.




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



     SECTION 3.04. Defaults and Remedies.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, Sections 5.1 and 5.2 of the Original Indenture are hereby amended and restated in their
entirety to read as follows:



     Section 5.1 Events of Default.




     (a) Each of the following is an “Event of Default” with respect to the Notes:




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



51









 






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




     (iii) failure by the Company to comply with its obligations under Article Eight
of this Indenture or to consummate a purchase of Notes when required pursuant to
Section 10.11 or Section 10.14 of this Indenture;




     (iv) failure by the Company or any of its Restricted Subsidiaries for 30 days
after receipt of a written notice (specifying such failure, requiring it to be
remedied and stating that such notice is a “Notice of Default” under this Indenture)
from the Trustee or the Holders of at least 25% in aggregate principal amount of the
then Outstanding Notes to comply with Section 10.8 or Section 10.10 of this
Indenture or to comply with the provisions described under Section 10.11 or Section
10.14 of this Indenture to the extent not described in clause (iii) of this Section
5.1(a);




     (v) failure by the Company or any of its Restricted Subsidiaries for 60 days
(or 180 days in the case of a Reporting Failure) after receipt of a written notice
(specifying such failure, requiring it to be remedied and stating that such notice
is a “Notice of Default” under this Indenture) from the Trustee or the Holders of at
least 25% in aggregate principal amount of the then Outstanding Notes to comply with
any of the other agreements in this Indenture or the Notes;




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




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




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




and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $10.0 million
or more;




     (vii) failure by the Company or any Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary to pay final judgments aggregating in excess of
$10.0 million (net of any amounts that a reputable and



52









 







creditworthy insurance company has acknowledged liability for in writing),
which judgments are not paid, discharged or stayed for a period of 60 days;




     (viii) except as permitted by this Indenture, any Subsidiary Guarantee is held
in a judicial proceeding to be unenforceable or invalid or ceases for any reason to
be in full force and effect, or any Subsidiary Guarantor, or any Person acting on
behalf of any Subsidiary Guarantor, denies or disaffirms its obligations under its
Subsidiary Guarantee;




     (ix) the Company, any Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary, pursuant to or within the meaning of Bankruptcy Law:




     (A) commences a voluntary case;




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




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




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




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




     (A) is for relief against the Company, any Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together (as of the latest
audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary, in an involuntary
case; or




     (B) appoints a custodian of the Company, any Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together (as of the latest
audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary, or for all or
substantially all of the property of the Company, any Significant Subsidiary
or any group of Restricted Subsidiaries that, taken together (as of the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary; or




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



53









 







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



     Section 5.2
Acceleration of Maturity; Rescission and Annulment.




     (a) In the case of an Event of Default specified in clause (ix) or clause (x) of
Section 5.1(a) of this Indenture, all then 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 of the Notes to be due and payable immediately by
notice in writing to the Company and, in case of a notice by Holders, also to the Trustee
specifying the respective Event of Default and that it is a notice of acceleration. Upon
any such declaration, the Notes shall become due and payable immediately.



     (b) At any time after such a declaration of acceleration with respect to the Notes has
been made and before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article Five provided, the Holders of a majority in
principal amount of the Outstanding Notes, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if:




     (i) the Company or one or more of the Subsidiary Guarantors has paid or
deposited with the Trustee a sum sufficient to pay:




     (A) all overdue interest on all Notes;




     (B) the principal of (and premium, if any, on) any Notes which have
become due otherwise than by such declaration of acceleration and any
interest thereon at the rate or rates prescribed therefor in such Notes;




     (C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in such
Notes; and




     (D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and




     (ii) all Events of Default with respect to the Notes, other than the
non-payment of the principal of the Notes that have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 5.13
of this Indenture.




     No such rescission shall affect any subsequent default or impair any right
consequent thereon.




     (c) Notwithstanding the foregoing Section 5.2(b), if an Event of Default specified in
clause (vi) of Section 5.1(a) above shall have occurred and be continuing, such Event of
Default and any consequential acceleration (to the extent not in violation of



54









 







any applicable law or in conflict with any judgment or decree of a court of competent
jurisdiction) shall be automatically rescinded (i)(A) if the Indebtedness that is the
subject of such Event of Default has been repaid or (B) if the default relating to such
Indebtedness is waived by the holders of such Indebtedness or cured and if such Indebtedness
has been accelerated, then the holders thereof have rescinded their declaration of
acceleration in respect of such Indebtedness, in each case within 20 days after the
declaration of acceleration with respect thereto, and (ii) if any other existing Events of
Default, except non-payment of principal, premium, if any, or interest on the Notes that
became due solely because of the acceleration of the Notes, have been cured or waived.



     SECTION 3.05. Notice of Defaults.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, Section 6.2 of the Original Indenture is hereby amended and restated in its entirety to
read as follows:



     Section 6.2 Notice of Defaults.




     Within 90 days after the occurrence of any Default hereunder with respect to the Notes,
the Trustee shall transmit by mail to all Holders of Notes, as their names and addresses
appear in the Security Register, notice of such Default hereunder known to the Trustee,
unless such Default shall have been cured or waived; provided, however, that, except in the
case of a Default in the payment of the principal of or any premium or interest with respect
to any Note, the Trustee may withhold from Holders of Notes notice of any continuing Default
or Event of Default if the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders of Notes; and, provided, further, that (i) in the
case of any Default of the character specified in Section 5.1(a)(iv), no such notice to
Holders shall be given until at least 30 days after the occurrence thereof, and (ii) in the
case of any Default of the character specified in Section 5.1(a)(v), no such notice to
Holders shall be given until at least 60 days after the occurrence thereof.



     SECTION 3.06. Compensation and Reimbursement.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, the third paragraph of Section 6.7 of the Original Indenture is hereby amended and
restated in its entirety to read as follows:




     Without limiting any rights available to the Trustee under applicable law, when the
Trustee incurs expenses or renders services in connection with an Event of Default specified
in Section 5.1(a)(ix) or Section 5.1(a)(x), the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for the services of the Trustee are
intended to constitute expenses of administration under any applicable Bankruptcy Law.



55









 





     SECTION 3.07. Merger, Consolidation or Sale of Substantially All Assets.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, Article Eight of the Original Indenture is hereby amended and restated in its entirety
to read as follows:



ARTICLE EIGHT

MERGER, CONSOLIDATION OR SALE OF SUBSTANTIALLY ALL ASSETS





	 	 	Section 8.1 Company May Consolidate, Etc., Only on Certain Terms.






     (a) The Company will not (1) consolidate or merge with or into another Person
(regardless of whether the Company is the surviving corporation), convert into another form
of entity or continue in another jurisdiction; or (2), directly or indirectly, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its properties
or assets, in one or more related transactions, to another Person, unless:




     (i) either: (A) the Company is the surviving corporation; or (B) the Person
formed by or surviving any such consolidation or merger or resulting from such
conversion (if other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition has been made is a corporation, limited
liability company or limited partnership organized or existing under the laws of the
United States, any state of the United States or the District of Columbia;




     (ii) the Person formed by or surviving any such conversion, consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
transfer, lease, conveyance or other disposition has been made assumes all the
obligations of the Company under the Notes and this Indenture (and the Registration
Rights Agreement, if any obligations thereunder remain unsatisfied) pursuant to
agreements reasonably satisfactory to the Trustee; provided that, unless such Person
is a corporation, a corporate co-issuer of the Notes will be added to this Indenture
by a supplement reasonably satisfactory to the Trustee;




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




     (iv) 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,
lease, conveyance or other disposition has been made, would (on the date of such
transaction after giving pro forma effect thereto and to any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period) either:




     (A) be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
10.10(a) of this Indenture; or



56









 






     (B) have a Fixed Charge Coverage Ratio that is not less than the Fixed
Charge Coverage Ratio of the Company and its Restricted Subsidiaries
immediately before such transaction; and




     (v) the Company has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, conveyance, sale,
transfer or lease and such supplemental indenture, if any, comply with this Article
Eight and that all conditions precedent herein provided for relating to such
transaction have been complied with.




     (b) For purposes of this Section 8.1, the sale, assignment, transfer, lease, conveyance
or other disposition of all or substantially all of the properties or assets of one or more
Subsidiaries of the Company, which properties or assets, if held by the Company instead of
such Subsidiaries, would constitute all or substantially all of the properties or assets of
the Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties or assets of the Company.




     (c) Notwithstanding the restrictions described in the foregoing clause (a)(iv), any
Restricted Subsidiary may consolidate with, merge into or dispose of all or part of its
properties or assets to the Company, the Company may merge into a Restricted Subsidiary for
the purpose of reincorporating the Company in another jurisdiction, and any Restricted
Subsidiary may consolidate with, merge into or dispose of all or part of its properties or
assets to another Restricted Subsidiary.




	 	 	Section 8.2 Successor Substituted.






     Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance
or other disposition of all or substantially all of the properties or assets of the Company
in a transaction that is subject to, and that complies with the provisions of, Section 8.1
of this Indenture, the successor Person formed by such consolidation or into or with which
the Company is merged or to which such sale, assignment, transfer, lease, conveyance or
other disposition is made shall succeed to, and be substituted for the Company (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 the “Company”
shall refer instead to the successor Person and not to the Company), and may exercise every
right and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that the
predecessor Company shall not be relieved from the obligation to pay the principal of and
interest on the Notes in the case of a lease of all or substantially all of the Company’s
properties or assets in a transaction that is subject to, and that complies with the
provisions of, Section 8.1.



     SECTION 3.08. Redemption of Notes.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, Sections 11.3 and 11.4 of the Original Indenture are hereby amended and restated in
their entirety to read as follows:



57









 





     Section 11.3 Selection by Trustee of Securities to be Redeemed.




     (a) If less than all of the Notes are to be redeemed at any time, the Trustee will
select the Notes to be redeemed among the Holders of the Notes on a pro rata basis (or, in
the case of Global Notes, the Trustee will select the Notes for redemption based on DTC’s
method that most nearly approximates a pro rata selection), unless otherwise required by law
or applicable securities exchange requirements.




     (b) The Trustee shall promptly notify the Company in writing of the Notes selected for
redemption and, in the case of any Note selected for partial redemption, the principal
amount at maturity thereof to be redeemed. No Notes in amounts of $2,000 or less shall be
redeemed in part. Notes and portions of Notes selected shall be in amounts of $2,000 and
integral 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, even if less
than $2,000 and/or a non-multiple of $1,000, 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 11.4 Notice of Redemption.




     (a) Subject to Section 11.6, at least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail or cause to be mailed, by first class mail, a notice
of redemption to each Holder whose Notes are to be redeemed at its registered address;
provided, however, that (notwithstanding the foregoing) notices of redemption may be mailed
more than 60 days prior to a Redemption Date if such notice is issued in connection with a
Legal Defeasance or Covenant Defeasance of the Notes or the satisfaction and discharge of
this Indenture.




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




     (i) the Redemption Date;




     (ii) the Redemption Price, or if not then ascertainable, the manner of
calculation thereof;




     (iii) 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 of the original Note shall be issued in the name of the Holder
thereof upon cancellation of the original Note;




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




     (v) that Notes called for redemption must be surrendered to the Paying Agent to
collect the Redemption Price and become due on the date fixed for redemption, unless
the redemption is subject to a condition precedent that is not satisfied or waived;



58









 






     (vi) that, unless the Company defaults in making such redemption payment,
interest, if any, on Notes called for redemption ceases to accrue on and after the
Redemption Date;




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




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




     (ix) any conditions that must be satisfied prior to the Company becoming
obligated to consummate such redemption.




     (b) At the Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense; provided, however, that the Company shall have
delivered to the Trustee, at least five Business Days prior to mailing of notice of the
redemption (or such shorter period of time as may be acceptable to the Trustee), a Company
Request that the Trustee give such notice and setting forth the information to be stated in
such notice as provided in the preceding paragraph.



     SECTION 3.09. Redemption Upon Equity Offering



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, the last sentence of Section 11.6 of the Original Indenture is hereby amended by adding
the following paragraph as the last paragraph of such Section:



     Notwithstanding the preceding provisions of this Section 11.6, notice of any redemption upon
an Equity Offering may be given prior to the completion of the related Equity Offering, and any
such redemption or notice may at the Company’s discretion, be subject to one or more conditions
precedent, including, but not limited to completion of the related Equity Offering.



     SECTION 3.10. Covenant Defeasance.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, the last sentence of Section 13.3 of the Original Indenture is hereby amended and
restated in its entirety to read as follows:




In addition, upon the Company’s exercise under Section 13.1 hereof of the option applicable
to this Section 13.3, subject to the satisfaction of the conditions set forth in Section
13.4 hereof, the following will no longer constitute an Event of Default: (a) clauses (iii),
(iv), (v), (vi) and (vii) of Section 5.1(a) of this Indenture and (b) clauses (ix) and (x)
(but only with respect to Subsidiaries of the Company) of Section 5.1(a) of this Indenture.




59












 





     SECTION 3.11. Subsidiary Guarantees of the Notes.



     Subject to the limitations set forth in the preamble to ARTICLE 3 of this First Supplemental
Indenture, Article Fourteen of the Original Indenture is hereby amended by adding the following
Sections 14.4 and 14.5 thereto:




	 	 	Section 14.4 Subsidiary Guarantors May Consolidate, etc., on Certain Terms.






     A Subsidiary Guarantor may not sell or otherwise dispose of all or substantially all of
its properties or assets to, or consolidate with or merge with or into (regardless of
whether such Subsidiary Guarantor is the surviving Person) another Person, other than the
Company or another Subsidiary Guarantor, unless:




     (a) immediately after giving effect to such transaction, no Default or Event of Default
exists; and




     (b) either:




     (i) (A) such Subsidiary Guarantor is the surviving Person or (B) 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 such
Subsidiary Guarantor) assumes all the obligations of such Subsidiary Guarantor under
this Indenture (including its Subsidiary Guarantee), on the terms set forth herein,
pursuant to agreements reasonably satisfactory to the Trustee; or




     (ii) such transaction does not violate the provisions of this Indenture
described in Section 10.11.




     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 Subsidiary Guarantee of such
Subsidiary Guarantor and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Subsidiary Guarantor, such successor
Person will succeed to and be substituted for the Subsidiary Guarantor with the same effect
as if it had been named herein as a Subsidiary Guarantor. Such successor Person thereupon
may cause to be signed any or all of the Subsidiary Guarantee notations to be endorsed upon
all of the Notes issuable hereunder which theretofore shall not have been signed by such
Subsidiary Guarantor and delivered to the Trustee. All the Subsidiary Guarantees so issued
will in all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of this
Indenture as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.



     Section 14.5 Releases.




     (a) Each Subsidiary Guarantor will be released and relieved of any obligations under
its Subsidiary Guarantee as set forth under Section 10.16(b) of this Indenture, and the
Subsidiary Guarantee of a Subsidiary Guarantor will also be released immediately:



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     (i) upon any sale or other disposition of all or substantially all of the
properties or assets of such Subsidiary Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to such
transaction) the Company or a Restricted Subsidiary, if the sale or other
disposition does not violate Section 10.11 of this Indenture;




     (ii) upon any sale or other disposition of the Capital Stock of such Subsidiary
Guarantor to a Person that is not (either before or after giving effect to such
transaction) the Company or a Restricted Subsidiary, if the sale or other
disposition does not violate Section 10.11 of this Indenture and such Subsidiary
Guarantor no longer qualifies as a Subsidiary of the Company as a result of such
disposition;




     (iii) upon designation of such Subsidiary Guarantor as an Unrestricted
Subsidiary in accordance with Section 10.15 of this Indenture;




     (iv) upon Legal Defeasance or Covenant Defeasance in accordance with Article
Thirteen of this Indenture or satisfaction and discharge of this Indenture in
accordance with Article Four of this Indenture; or




     (v) upon the liquidation or dissolution of such Subsidiary Guarantor, provided
that no Default or Event of Default occurs as a result thereof or shall have
occurred and is continuing.




     (b) Upon delivery by the Company to the Trustee of an Officers’ Certificate and an
Opinion of Counsel to the effect that all conditions precedent to the release of such
Subsidiary Guarantee, as set forth in this Indenture, have been satisfied, the Trustee will
execute any documents reasonably required in order to evidence the release of any Subsidiary
Guarantor from its obligations under such Subsidiary Guarantee.




     (c) Any Subsidiary Guarantor not released from its obligations under its Subsidiary
Guarantee as provided in this Section 14.5 will remain liable for the full amount of
principal of and interest and premium, if any, on the Notes and for the other obligations of
any Subsidiary Guarantor under this Indenture as provided in this Article Fourteen.



ARTICLE 4

Additional Covenants




     With respect to the Notes, Article Ten of the Original Indenture is hereby amended as set
forth below in this ARTICLE 4; provided, however, that each such amendment shall apply only to the
Notes and not to any other series of Securities issued under the Indenture.



     SECTION 4.01. Reports.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby amended by adding the following Section
10.6 thereto:



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     Section 10.6 Reports.




     (a) Regardless of whether required by the rules and regulations of the SEC, so long as
any Notes are Outstanding, the Company will file with the SEC for public availability,
within the time periods specified in the SEC’s rules and regulations (unless the SEC will
not accept such a filing, in which case the Company will comply with the requirements
described in Section 10.6(b)):




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




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




     All such reports will be prepared in all material respects in accordance with all of
the rules and regulations applicable to such reports. Each annual report on Form 10-K will
include a report on the Company’s consolidated financial statements by the Company’s
certified independent accountants.




     (b) If, at any time, the Company is no longer subject to the periodic reporting
requirements of the Exchange Act for any reason, the Company will nevertheless continue
filing the reports specified in Section 10.6(a) with the SEC within the time periods
specified in Section 10.6(a) unless the SEC will not accept such a filing. The Company will
not take any action for the purpose of causing the SEC not to accept any such filings. If,
notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason,
the Company will post the reports referred to in Section 10.6(a) on its website within the
time periods that would apply if the Company were required to file those reports with the
SEC.




     (c) If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries,
then the quarterly and annual financial information required by Section 10.6(a) and Section
10.6(b) will include 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.




     (d) In addition, the Company agrees that, for so long as any Notes remain Outstanding,
if at any time it is not required to file with the SEC the reports required by Section
10.6(a), it will furnish to the Holders of Notes and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.



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     SECTION 4.02. Taxes.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.7 thereto:



     Section 10.7 Taxes.




     The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to
delinquency, any 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 4.03. Restricted Payments.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.8 thereto:



     Section 10.8 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 any Restricted
Subsidiary);




     (2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, any such purchase, redemption, acquisition or retirement made in
connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent company of the Company;




     (3) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Subordinated Debt, except a payment of
interest or principal at the Stated Maturity thereof (excluding (a) any intercompany
Indebtedness between or among the Company and any of its Restricted Subsidiaries or
(b) the purchase or other acquisition of Subordinated Debt acquired in anticipation
of satisfying a sinking fund obligation, principal installment or final maturity, in
each case due within one year of the date of such purchase or other acquisition); or



63









 






     (4) make any Restricted Investment;




(all such payments and other actions set forth in clauses (1) through (4) above being
collectively referred to as “Restricted Payments”), unless, at the time of and after giving
effect to such Restricted Payment:




     (i) no Default or Event of Default has occurred and is continuing or would
occur as a consequence of such Restricted Payment;




     (ii) the Company would, at the time of such Restricted Payment and after giving
pro forma effect thereto as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 10.10(a) of this Indenture; and




     (iii) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Company and its Restricted Subsidiaries since the
Issue Date (excluding Restricted Payments permitted by clauses (ii), (iii), (iv),
(v), (vi), (vii), (viii), (ix) and (xii) of Section 10.8(b) of this Indenture), is
equal to or less than the sum, without duplication, of:




     (A) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the most recent
fiscal quarter commencing before the Issue Date to the end of the Company’s
most recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit); plus




     (B) 100% of (1)(a) the aggregate net cash proceeds and (b) the Fair
Market Value of (i) marketable securities (other than marketable securities
of the Company or an Affiliate of the Company), (ii) Capital Stock of a
Person (other than the Company or an Affiliate of the Company) engaged
primarily in any Related Business and (iii) other assets used or useful in
any Related Business, in each case received by the Company since the Issue
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 of the Company 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), (2) with respect to Indebtedness that is incurred on or after
the Issue Date, the amount by which such Indebtedness of the Company or any
of its Restricted Subsidiaries is reduced on the Company’s consolidated
balance sheet upon the conversion or exchange after the Issue Date of any
such Indebtedness into or for Equity Interests of the Company (other than
Disqualified



64









 







Stock), and (3) the aggregate net cash proceeds, if any, received by
the Company or any of its Restricted Subsidiaries upon any conversion or
exchange described in clause (1) or (2) above; plus




     (C) with respect to Restricted Investments made by the Company and its
Restricted Subsidiaries after the Issue Date, an amount equal to the sum,
without duplication, of (1) the net reduction in such Restricted Investments
in any Person resulting from (a) repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted
Subsidiary, (b) other repurchases, repayments or redemptions of such
Restricted Investments, (c) the sale of any such Restricted Investment to a
purchaser other than the Company or a Subsidiary of the Company or (d) the
release of any Guarantee (except to the extent any amounts are paid under
such Guarantee) that constituted a Restricted Investment plus (2) with
respect to any Unrestricted Subsidiary designated as such after the Issue
Date that is redesignated as a Restricted Subsidiary after the Issue Date,
the lesser of (a) the Fair Market Value of the Company’s Investment in such
Subsidiary held by the Company or any of its Restricted Subsidiaries at the
time of such redesignation and (b) the aggregate amount of Investments made
by the Company or any of its Restricted Subsidiaries in such Subsidiary upon
or after the designation of such Subsidiary as an Unrestricted Subsidiary
and prior to the redesignation of such Subsidiary as a Restricted
Subsidiary; plus




     (D) 100% of any dividends received by the Company or a Restricted
Subsidiary after the Issue Date from an Unrestricted Subsidiary, to the
extent such dividends were not otherwise included in the Consolidated Net
Income of the Company for such period.




     (b) Section 10.8(a) of this Indenture will not prohibit:




     (i) 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;




     (ii) the making of any Restricted Payment in exchange for, or out of the net
cash proceeds from the substantially concurrent sale (other than to a Subsidiary of
the Company) of, Equity Interests of the Company (other than Disqualified Stock and
other than Equity Interests issued or sold to an employee stock ownership plan,
option plan or similar trust to the extent such sale to an employee stock ownership
plan, option plan or similar trust is financed by loans from or Guaranteed by the
Company or any of its Restricted Subsidiaries unless such loans have been repaid
with cash on or prior to the date of determination) 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



65









 







utilized for any such Restricted Payment will be excluded from clause (iii)(B)
of Section 10.8(a) and clause (vii) of this Section 10.8 (b);




     (iii) the purchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Debt (including the payment of any required premium and
any fees and expenses incurred in connection with such purchase, redemption,
defeasance or other acquisition or retirement) with the net cash proceeds from a
substantially concurrent incurrence of Permitted Refinancing Indebtedness;




     (iv) the purchase, redemption or other acquisition or retirement for value of
any Equity Interests of the Company or any Restricted Subsidiary held by any of the
Company’s or any of its Restricted Subsidiaries’ current or former directors or
employees in connection with the exercise or vesting of any equity compensation
(including, without limitation, stock options, restricted stock and phantom stock)
in order to satisfy the Company’s or such Restricted Subsidiary’s tax withholding
obligation with respect to such exercise or vesting;




     (v) purchases of Capital Stock deemed to occur upon the exercise of stock
options if such Capital Stock represents a portion of the exercise price thereof;




     (vi) payments to fund the purchase, redemption or other acquisition or
retirement for value by the Company of fractional Equity Interests arising out of
stock dividends, splits or combinations, business combinations or other transactions
permitted by this Indenture;




     (vii) as long as no Default has occurred and is continuing or would be caused
thereby, the purchase, redemption or other acquisition or retirement for value of
any Equity Interests of the Company or any Restricted Subsidiary held by any of the
Company’s or any of its Restricted Subsidiaries’ current or former directors or
employees; provided that the aggregate price paid for all such purchased, redeemed,
acquired or retired Equity Interests may not exceed the sum of (A) $20.0 million,
plus (B) the aggregate amount of cash proceeds received by the Company from the sale
of the Company’s Equity Interests (other than Disqualified Stock) to any such
directors or employees that occurs after the Issue Date; provided that the amount of
such cash proceeds utilized for any such purchase, redemption or other acquisition
or retirement will be excluded from clause (iii)(B) of Section 10.8(a) and clause
(ii) of this Section 10.8(b) plus (C) the cash proceeds of key man life insurance
policies received by the Company and its Restricted Subsidiaries after the Issue
Date;




     (viii) as long as no 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 class or
series of preferred stock of any Restricted Subsidiary issued on or



66









 







after the Issue Date in accordance with the Fixed Charge Coverage Ratio test
set forth in Section 10.10(a);




     (ix) the payment of any dividend (or, in the case of any partnership or limited
liability company, any similar distribution) by a Restricted Subsidiary to the
holders of Equity Interests (other than Disqualified Stock) of such Restricted
Subsidiary; provided that such dividend or similar distribution is paid to all
holders of such Equity Interests on a pro rata basis based on their respective
holdings of such Equity Interests;




     (x) purchases of Subordinated Debt at a purchase price not greater than (A)
101% of the principal amount of such Subordinated Debt and accrued and unpaid
interest thereon in the event of a Change of Control or (B) 100% of the principal
amount of such Subordinated Debt and accrued and unpaid interest thereon in the
event of an Asset Sale in connection with any change of control offer or asset sale
offer required by the terms of such Subordinated Debt, but only if:




     (1) in the case of a Change of Control, the Company has first complied
with and fully satisfied its obligations under Section 10.14; or




     (2) in the case of an Asset Sale, the Company has complied with and
fully satisfied its obligations under Section 10.11;




     (xi) payments or distributions to dissenting stockholders pursuant to
applicable law in connection with a merger, consolidation or transfer of all or
substantially all of the assets of the Company that complies with Article Eight of
this Indenture; and




     (xii) other Restricted Payments in an aggregate amount at any time outstanding
not to exceed $25.0 million.




     (c) The amount of all Restricted Payments (other than cash) shall be the Fair Market
Value, on the date of such Restricted Payment, of the Restricted Investment proposed to be
made or the asset(s) or securities proposed to be paid, transferred or issued by the Company
or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.




     (d) The Fair Market Value of any cash Restricted Payment shall be its face amount, and
the Fair Market Value of any non-cash Restricted Payment shall be determined in accordance
with the definition of that term. For purposes of determining compliance with this Section
10.8, in the event that a Restricted Payment meets the criteria of more than one of the
exceptions described in clauses (i) through (xii) of Section 10.8(b) or is entitled to be
made pursuant to Section 10.8(a), the Company shall, in its sole discretion, classify such
Restricted Payment, or later classify, reclassify or re-divide all or a portion of such
Restricted Payment, in any manner that complies with this Section 10.8.



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     SECTION 4.04. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.9 thereto:




Section 10.9 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:




     (i) 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;




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




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




     (b) However, the preceding restrictions in Section 10.9(a) will not apply to
encumbrances or restrictions existing under, by reason of or with respect to:




     (i) the Senior Credit Agreement, any Existing Indebtedness, Capital Stock or
any other agreements or instruments, in each case, in effect on the Issue Date and
any amendments, restatements, modifications, renewals, extensions, supplements,
increases, refundings, replacements or refinancings thereof; provided that the
encumbrances and restrictions in any such amendments, restatements, modifications,
renewals, extensions, supplements, increases, refundings, replacements or
refinancings are, in the reasonable good faith judgment of the Chief Executive
Officer and the Chief Financial Officer of the Company, no more restrictive, taken
as a whole, than those contained in the applicable agreements or instruments as in
effect on the Issue Date;




     (ii) this Indenture, the Notes and the Subsidiary Guarantees;




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




     (iv) 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



68









 







or assets of any Person, other than the Person, or the property or assets of
the Person, so acquired and any amendments, restatements, modifications, renewals,
extensions, supplements, increases, refundings, replacements or refinancings
thereof; provided, that the encumbrances and restrictions in any such amendments,
restatements, modifications, renewals, extensions, supplements, increases,
refundings, replacements or refinancings are, in the reasonable good faith judgment
of the Chief Executive Officer and the Chief Financial Officer of the Company, no
more restrictive, taken as a whole, than those in effect on the date of the
acquisition; provided, further, that, in the case of Indebtedness, such Indebtedness
was permitted by the terms of this Indenture to be incurred;




     (v) customary non-assignment provisions in contracts, leases and licenses
(including, without limitation, licenses of intellectual property) entered into in
the ordinary course of business;




     (vi) any agreement for the sale or other disposition of the Equity Interests
in, or all or substantially all of the properties or assets of, a Restricted
Subsidiary, that restricts distributions by the applicable Restricted Subsidiary
pending the sale or other disposition;




     (vii) 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;




     (viii) Liens permitted to be incurred under the provisions of Section 10.13
that limit the right of the debtor to dispose of the assets subject to such Liens;




     (ix) the issuance of preferred stock by a Restricted Subsidiary or the payment
of dividends thereon in accordance with the terms thereof; provided that issuance of
such preferred stock is permitted pursuant to Section 10.10 and the terms of such
preferred stock do not expressly restrict the ability of a Restricted Subsidiary to
pay dividends or make any other distributions on its Capital Stock (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
Capital Stock);




     (x) other Indebtedness of the Company or any of its Restricted Subsidiaries
permitted to be incurred pursuant to an agreement entered into subsequent to the
Issue Date in accordance with Section 10.10; provided that the provisions relating
to such encumbrance or restriction contained in such Indebtedness are not materially
less favorable to the Company and its Restricted Subsidiaries, taken as a whole, in
the reasonable good faith judgment of the Chief Executive Officer and Chief
Financial Officer of the Company, than the provisions contained in the Senior Credit
Agreement as in effect on the Issue Date;



69









 






     (xi) Indebtedness incurred or Capital Stock issued by any Restricted
Subsidiary, provided that the restrictions contained in the agreements or
instruments governing such Indebtedness or Capital Stock (A) apply only in the event
of a payment default or a default with respect to a financial covenant in such
agreement or instrument or (B) will not materially affect the Company’s ability to
pay all principal, interest and premium, if any, on the Notes, in the reasonable
good faith judgment of the Chief Executive Officer and Chief Financial Officer of
the Company;




     (xii) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest;




     (xiii) Hedging Obligations permitted from time to time under this Indenture;




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




     (xv) with respect only to encumbrances or restrictions of the type referred to
in clause (iii) of Section 10.9(a):




     (A) customary nonassignment provisions (including provisions forbidding
subletting) in leases governing leasehold interests or Farm-In Agreements or
Farm-Out Agreements relating to leasehold interests in oil and gas
properties to the extent such provisions restrict the transfer of the lease,
the property leased thereunder or the other interests therein;




     (B) provisions limiting the disposition or distribution of assets or
property in, or transfer of Capital Stock of, joint venture agreements,
asset sale agreements, sale-leaseback agreements, stock sale agreements and
other similar agreements entered into (1) in the ordinary course of
business, or (2) with the approval of the Company’s Board of Directors,
which limitations are applicable only to the assets, property or Capital
Stock that are the subject of such agreements; and




     (C) Capital Lease Obligations, security agreements, mortgages, purchase
money agreements or similar instruments to the extent such encumbrance or
restriction restricts the transfer of the property (including Capital Stock)
subject to such Capital Lease Obligations, security agreements, mortgages,
purchase money agreements or similar instruments.



     SECTION 4.05. Incurrence of Indebtedness and Issuance of Preferred Stock.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.10 thereto:



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     Section 10.10 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;”
with “incurrence” having a correlative meaning) 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 Company
may incur Indebtedness (including Acquired Debt) and issue Disqualified Stock, and
Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) and issue preferred
stock, if (i) 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 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
preferred stock had been issued, as the case may be, at the beginning of such four-quarter
period and (ii) no Default would occur as a consequence of, and no Event of Default would be
continuing following, the incurrence of the Indebtedness or the transactions relating to
such incurrence, including any related application of the proceeds thereof.




     (b) Notwithstanding the foregoing, Section 10.10(a) will not prohibit the incurrence of
any of the following items of Indebtedness or the issuance of any Disqualified Stock or
preferred stock described in clauses (v) and (vii) of this Section 10.10(b) (collectively,
“Permitted Debt”):




     (i) the incurrence by the Company and any Subsidiary Guarantor of Indebtedness
under Credit Facilities in an aggregate principal amount at any one time outstanding
under this clause (i) (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 greater of (A) $200.0 million and (B) the
sum of $100.0 million plus an amount equal to 25.0% of Adjusted Consolidated Net
Tangible Assets of the Company, determined as of the date of the incurrence of such
Indebtedness after giving pro forma effect to such incurrence and the application of
the proceeds therefrom;




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




     (iii) the incurrence by the Company of Indebtedness represented by the Notes to
be issued on the Issue Date and the Exchange Notes to be issued pursuant to the
Registration Rights Agreement;




     (iv) 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



71









 







of financing all or any part of the purchase price or cost of design,
construction, installation, improvement, deployment, refurbishment or modification
of property, plant or equipment or furniture, fixtures and equipment, in each case,
used in the business of the Company or any of its Restricted Subsidiaries, in an
aggregate principal amount at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace,
defease, discharge or otherwise retire for value any Indebtedness incurred pursuant
to this clause (iv), not to exceed the greater of (A) $15.0 million and (B) 2.0% of
Adjusted Consolidated Net Tangible Assets of the Company, determined as of the date
of the incurrence of such Indebtedness;




     (v) the incurrence or issuance 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 extend, renew, refund, refinance, replace, defease,
discharge or otherwise retire for value any Indebtedness (other than intercompany
Indebtedness) or Disqualified Stock of the Company, or Indebtedness (other than
intercompany Indebtedness) or preferred stock of any Restricted Subsidiary, in each
case that was permitted by this Indenture to be incurred or issued under Section
10.10(a) or clause (ii), (iii), (iv), (v), (x), (xiv) or (xv) of this Section
10.10(b);




     (vi) 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 Subsidiary Guarantor
is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary
Guarantor, such Indebtedness must be expressly subordinated to the prior payment in
full in cash of all obligations then due with respect to the Notes, in the case of
the Company, or the Subsidiary Guarantee, in the case of a Subsidiary Guarantor; and
(B)(1) 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 and (2) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary 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
(vi);




     (vii) 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; 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,



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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 (vii);




     (viii) the incurrence of obligations of the Company or a Restricted Subsidiary
pursuant to Interest Rate and Currency Hedges, in each case entered into in the
ordinary course of business for the non-speculative purpose of limiting risks that
arise in the ordinary course of business of the Company and its Restricted
Subsidiaries;




     (ix) the Guarantee by the Company or any of the Subsidiary Guarantors of
Indebtedness of the Company or a Restricted Subsidiary that was permitted to be
incurred by another provision of this Section 10.10; provided that if the
Indebtedness being Guaranteed is subordinated to or pari passu with the Notes, then
the Guarantee shall be subordinated or pari passu, as applicable, to the same extent
as the Indebtedness Guaranteed;




     (x) the incurrence by the Company or any Restricted Subsidiary of Permitted
Acquisition Indebtedness;




     (xi) the incurrence by the Company or any Restricted Subsidiary 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;




     (xii) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness consisting of the financing of insurance premiums in customary amounts
consistent with the operations and business of the Company and its Restricted
Subsidiaries;




     (xiii) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness constituting reimbursement obligations with respect to letters of
credit; provided that, upon the drawing of such letters of credit, such obligations
are reimbursed within 30 days following such drawing;




     (xiv) the incurrence by any Foreign Subsidiary of Indebtedness that, in the
aggregate together with all other Indebtedness of all Foreign Subsidiaries
(including all Permitted Refinancing Indebtedness incurred to extend, renew, refund,
refinance, replace, defease, discharge or otherwise retire for value any
Indebtedness incurred pursuant to this clause (xiv)), does not exceed the greater of
(A) 20.0% of the Adjusted Consolidated Net Tangible Assets of all Foreign
Subsidiaries, considered as a consolidated enterprise, determined as of the date of
the incurrence of such Indebtedness after giving pro forma effect to such incurrence
and the application of the proceeds therefrom and (B) $25.0 million; and




     (xv) the incurrence by the Company or any of the Subsidiary Guarantors of
Indebtedness in an aggregate principal amount that, when taken together with all
other Indebtedness of the Company and its Restricted



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Subsidiaries outstanding on the date of such incurrence (other than
Indebtedness permitted by clauses (i) through (xiv) above or Section 10.10(a)) and
any Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance,
replace, defease, discharge or otherwise retire for value any Indebtedness incurred
pursuant to this clause (xv) does not exceed the greater of (A) 5.0% of Adjusted
Consolidated Net Tangible Assets of the Company, determined as of the date of the
incurrence of such Indebtedness after giving pro forma effect to such incurrence and
the application of the proceeds therefrom and (B) $35.0 million.




     (c) The Company will not incur, and will not permit any Subsidiary 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 Subsidiary Guarantor unless such
Indebtedness is also contractually subordinated in right of payment to the Notes and the
applicable Subsidiary 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 solely by virtue of being unsecured or by virtue of being
secured on a first or junior Lien basis.




     (d) For purposes of determining compliance with this Section 10.10, (i) in the event
that an item of proposed Indebtedness, Disqualified Stock or preferred stock meets the
criteria of more than one of the categories of Permitted Debt described in clauses (i)
through (xv) of Section 10.10(b), or is entitled to be incurred or issued pursuant to
Section 10.10(a), the Company will be permitted to divide and classify such item on the date
of its incurrence or issuance, or later divide and reclassify all or a portion of such item,
in any manner that complies with this Section 10.10 and (ii) all Indebtedness outstanding on
the Issue Date under the Senior Credit Agreement shall be deemed incurred on the Issue Date
under clause (i) of Section 10.10(b). The accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any Indebtedness in the
form of additional Indebtedness with the same terms, the reclassification of preferred stock
as Indebtedness due to a change in accounting principles, and the payment of dividends on
Disqualified Stock or preferred stock in the form of additional Disqualified Stock or
preferred stock of the same class will be deemed not to be an incurrence of Indebtedness or
an issuance of Disqualified Stock or preferred stock for purposes of this Section 10.10;
provided, in each such case, that the amount of any such accrual, accretion or payment is
included in Fixed Charges of the Company as accrued.




     (e) For purposes of determining compliance with any U.S. dollar-denominated restriction
on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of
Indebtedness denominated in a foreign currency shall be calculated based on the relevant
currency exchange rate in effect on the date such Indebtedness was incurred, in the case of
term Indebtedness, or first committed, in the case of revolving credit Indebtedness;
provided that if such Indebtedness is incurred to refinance other Indebtedness denominated
in a foreign currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated
restriction shall be deemed not to have been exceeded so long as the



74









 







principal amount of such refinancing Indebtedness does not exceed the principal amount
of such Indebtedness being refinanced. Notwithstanding any other provision of this Section
10.10, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
incur pursuant to this Section 10.10 shall not be deemed to be exceeded solely as a result
of fluctuations in the exchange rate of currencies. The principal amount of any Permitted
Refinancing Indebtedness incurred to refinance other Indebtedness, if incurred in a
different currency from the Indebtedness being refinanced, shall be calculated based on the
currency exchange rate applicable to the currencies in which such Permitted Refinancing
Indebtedness is denominated that is in effect on the date of such refinancing.



     SECTION 4.06. Asset Sales.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.11 thereto:




	 	 	Section 10.11 Asset Sales.






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




     (i) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the Fair Market Value
of the assets or Equity Interests issued or sold or otherwise disposed of; and




     (ii) at least 75% of the aggregate consideration received in respect of such
Asset Sale by the Company or such Restricted Subsidiary (considered together on a
cumulative basis, with all consideration received by the Company or any of its
Restricted Subsidiaries in respect of other Asset Sales consummated 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:




     (A) any liabilities, as shown on the Company’s most recent consolidated
balance sheet, of the Company or any Restricted Subsidiary (other than
contingent liabilities, Subordinated Debt and any obligations in respect of
preferred stock) that are assumed by the transferee of any such assets or
Equity Interests pursuant to a customary novation agreement (or other legal
documentation with the same effect) that includes a full release of the
Company or such Restricted Subsidiary from any and all liability therefor;




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



75









 






     (C) any Capital Stock or assets of the kind referred to in clause (ii)
of Section 10.11(c) below.




     (b) Notwithstanding the foregoing, the 75% limitation referred to above in Section
10.11(a) shall be deemed satisfied with respect to any Asset Sale in which the cash or Cash
Equivalents portion of the consideration received therefrom, determined in accordance with
Section 10.11(a) on an after-tax basis, is equal to or greater than what the after-tax
proceeds would have been had such Asset Sale complied with the aforementioned 75%
limitation.




     (c) Within 365 days after the receipt of any Net Proceeds from an Asset Sale or, if the
Company has entered into a binding commitment or commitments with respect to any of the
actions described in clauses (ii) or (iii) below, within the later of (x) 365 days after the
receipt of any Net Proceeds from an Asset Sale or (y) 120 days after the entering into of
such commitment or commitments, the Company (or the applicable Restricted Subsidiary, as the
case may be) may apply such Net Proceeds:




     (i) to permanently repay Senior Debt;




     (ii) to invest in Additional Assets; or




     (iii) to make capital expenditures in respect of a Related Business of the
Company or any of its Restricted Subsidiaries.




However, pending application or investment of such Net Proceeds as provided in clauses (i)
through (iii) above, such Net Proceeds may be applied to temporarily reduce revolving credit
Indebtedness. An amount equal to any Net Proceeds from Asset Sales that are not applied or
invested as provided in clauses (i) through (iii) above will constitute “Excess Proceeds.”




     (d) Within ten Business Days after the aggregate amount of Excess Proceeds exceeds
$20.0 million, the Company will make an offer (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 this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets, to purchase the maximum principal amount of
Notes and such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds. 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, 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 pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Company will use the Excess Proceeds to purchase the Notes and such
other pari passu Indebtedness on a pro rata basis. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds will be reset at zero.



76









 






     (e) Notwithstanding the foregoing, the sale, conveyance or other disposition of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries, taken as a whole, will be governed by Sections 8.1 and/or 10.14 of this
Indenture, as applicable, and not by this Section 10.11.




     (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 pursuant to an Asset
Sale Offer. To the extent that the provisions of any securities laws or regulations
conflict with the Asset Sales provisions of this Indenture, or compliance with the Asset
Sales provisions of this Indenture would constitute a violation of any such laws or
regulations, the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under the Asset Sales provisions of this
Indenture by virtue of such compliance.




     (g) In the event that, pursuant to this Section 10.11, the Company is required to
commence an Asset Sale Offer, it will follow the procedures specified below:




     (i) The Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in the Indenture with respect to offers to purchase or redeem with
the proceeds of sales of assets. 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 pari passu
Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer Amount
has been tendered, all Notes and other Indebtedness 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.




     (ii) 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 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.




     (iii) 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. 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
10.11 and the length of time the Asset Sale Offer will remain open;



77









 






     (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 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 $2,000 and
integral multiples of $1,000 in excess of $2,000 only;




     (F) that Holders electing to have Notes purchased pursuant to any Asset
Sale Offer will be required to surrender the Notes, 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
prior to the close of business on the third Business Day preceding 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, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;




     (H) that, if the aggregate principal amount of Notes and other pari
passu Indebtedness surrendered by Holders thereof exceeds the Offer Amount,
the Company will select the Notes and other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and
such other pari passu Indebtedness surrendered (with such adjustments as may
be deemed appropriate by the Company so that only Notes in denominations of
$2,000, or an integral multiple of $1,000 in excess of $2,000, 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), which unpurchased
portion must be equal to $2,000 in principal amount or an integral multiple
of $1,000 in excess of $2,000.




     (iv) 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 Offer Amount of
Notes or portions thereof tendered pursuant to the Asset Sale Offer, or



78









 







if less than the Offer Amount has 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
10.11. The Company, the depositary 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 Company
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.



     SECTION 4.07. Transactions with Affiliates.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.12 thereto:




	 	 	Section 10.12 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:




     (i) the Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted Subsidiary
with a Person that is not an Affiliate of the Company; and




     (ii) 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 $15.0
million, a Board Resolution of the Company set forth in an Officers’
Certificate certifying that such Affiliate Transaction or series of related
Affiliate Transactions complies with this Section 10.12 and that such
Affiliate Transaction or series of related Affiliate Transactions has been
approved by a majority of the disinterested members of the Board of
Directors of the Company; and



79









 






     (B) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $30.0
million, an opinion as to the fairness to the Company or such Restricted
Subsidiary of such Affiliate Transaction or series of related Affiliate
Transactions from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing.




     (b) The following items will not be deemed to be Affiliate Transactions and, therefore,
will not be subject to the provisions of Section 10.12(a):




     (i) any employment, consulting or similar agreement or arrangement, stock
option or stock ownership plan, employee benefit plan, officer or director
indemnification agreement, restricted stock agreement, severance agreement or other
compensation plan or arrangement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and payments, awards,
grants or issuances of securities pursuant thereto;




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




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




     (iv) reasonable fees and expenses and compensation paid to, and indemnity or
insurance provided on behalf of, officers, directors or employees of the Company or
any of its Restricted Subsidiaries;




     (v) any issuance of Equity Interests (other than Disqualified Stock) of the
Company to, or receipt of a capital contribution from, Affiliates of the Company;




     (vi) Restricted Payments that do not violate Section 10.8 of this Indenture or
any Permitted Investments;




     (vii) loans or advances to employees in the ordinary course of business or
consistent with past practice;




     (viii) advances to or reimbursements of employees for moving, entertainment and
travel expenses, drawing accounts and similar expenditures in the ordinary course of
business;




     (ix) the performance of obligations of the Company or any of its Restricted
Subsidiaries under the terms of any written agreement to which the Company or any of
its Restricted Subsidiaries was a party on the Issue Date, as these agreements may
be amended, modified or supplemented from time to time; provided, however, that any
future amendment, modification or supplement entered into after the Issue Date will
be permitted to the extent that its terms do



80









 







not materially and adversely affect the rights of any Holders of the Notes (as
determined in good faith by the Board of Directors of the Company) as compared to
the terms of the agreements in effect on the Issue Date;




     (x) (A) guarantees of performance by the Company and its Restricted
Subsidiaries of Unrestricted Subsidiaries in the ordinary course of business, except
for Guarantees of Indebtedness in respect of borrowed money, and (B) pledges of
Equity Interests of Unrestricted Subsidiaries for the benefit of lenders of
Unrestricted Subsidiaries;




     (xi) transactions between the Company or any Restricted Subsidiary and any
Person, a director of which is also a director of the Company or any direct or
indirect parent company of the Company and such director is the sole cause for such
Person to be deemed an Affiliate of the Company or any Restricted Subsidiary;
provided, however, that such director abstains from voting as director of the
Company or such direct or indirect parent company of the Company, as the case may
be, on any matter involving such other Person; and




     (xii) transactions with customers, clients, suppliers, or purchasers or sellers
of goods or services, in each case in the ordinary course of business and otherwise
in compliance with the terms of this Indenture, provided that in the reasonable
determination of the Board of Directors of the Company or the senior management of
the Company, such transactions are on terms not materially less favorable to the
Company or the relevant Restricted Subsidiary than those that could reasonably be
expected to be obtained in a comparable transaction at such time on an arm’s-length
basis from a Person that is not an Affiliate of the Company.



     SECTION 4.08. Limitation on Liens.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.13 thereto:



     Section 10.13 Limitation on Liens.




     (a) The Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur or permit to exist any Lien (the “Initial Lien”),
other than Permitted Liens, upon any of its property or assets (including Capital Stock and
Indebtedness of any Subsidiaries of the Company and including any income or profits from
such property or assets), whether owned on the Issue Date or thereafter acquired, which Lien
secures any Subordinated Debt or other Indebtedness, unless:




     (i) in the case of Liens securing Subordinated Debt of the Company or a
Subsidiary Guarantor, the Notes or Subsidiary Guarantee, as applicable, are secured
by a Lien on such property or assets on a senior basis to the Subordinated Debt so
secured with the same priority as the Notes or such Subsidiary Guarantee,




81












 






as applicable, has to such Subordinated Debt until such time as such
Subordinated Debt is no longer so secured by a Lien; and




     (ii) in the case of Liens securing other Indebtedness of the Company or a
Subsidiary Guarantor, the Notes or Subsidiary Guarantees, as applicable, are secured
by a Lien on such property or assets on an equal and ratable basis with the other
Indebtedness so secured until such time as such other Indebtedness is no longer so
secured by a Lien.




     (b) Any Lien securing the Notes or Subsidiary Guarantees created pursuant to Section
10.13(a) shall provide by its terms that such Lien shall be automatically and
unconditionally released and discharged upon the unconditional release and discharge of the
Initial Lien.



     SECTION 4.09. Offer to Repurchase upon a Change of Control.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.14 thereto:



     Section 10.14 Offer to Repurchase upon a Change of Control.




     (a) If a Change of Control occurs, each Holder of Notes will have the right to require
the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000
in excess of $2,000) of that Holder’s Notes pursuant to an offer (a “Change of Control
Offer”) on the terms set forth in this Section 10.14. In the Change of Control Offer, the
Company will offer a payment in cash (the “Change of Control Payment”) equal to not less
than 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
Payment Date”), subject to the rights of Holders of Notes on the relevant Record Date to
receive interest due on the relevant Interest Payment Date. Within 30 days following any
Change of Control, the Company will mail a notice to each Holder describing the transaction
or transactions that constitute the Change of Control and stating:




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




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




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




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



82









 






     (v) that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, with the form entitled
“Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by
book-entry transfer, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the Change of
Control Payment Date;




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




     (vii) that Holders whose Notes are being purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer), which unpurchased portion must
be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess
of $2,000.




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




     (b) On the Change of Control Payment Date, the Company will, to the extent lawful:




     (i) accept for payment all Notes or portions of Notes properly tendered
pursuant to the Change of Control Offer;




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




     (iii) 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.




     (c) The Paying Agent will promptly mail or wire transfer 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, make such payment through the facilities of the Depositary), 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



83









 




unpurchased portion of the Notes surrendered, if any; provided that each such new Note
will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess of
$2,000. Any Note so accepted for payment will cease to accrue interest on and after the
Change of Control Payment Date unless the Company defaults in making the Change of Control
Payment.





     (d) 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.




     (e) Notwithstanding anything to the contrary in this Section 10.14, the Company will
not be required to make a Change of Control Offer upon a Change of Control if a third party
makes the Change of Control Offer in the manner, at the price, at the times and otherwise in
compliance with the requirements set forth in this Indenture applicable to a Change of
Control Offer made by the Company and purchases all Notes properly tendered and not
withdrawn under the Change of Control Offer.




     (f) A Change of Control Offer may be made in advance of a Change of Control, and
conditioned upon the occurrence of such Change of Control, if a definitive agreement is in
place for the Change of Control at the time of making the Change of Control Offer. Notes
repurchased by the Company pursuant to a Change of Control Offer will have the status of
Notes issued but not Outstanding or will be retired and cancelled, at the Company’s option.
Notes purchased by a third party pursuant to clause (e) of this Section 10.14 will have the
status of Notes issued and Outstanding.




     (g) In the event that Holders of at least 90% of the 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 in clause (e) of
this Section 10.14) purchases all of the Notes held by such Holders, the Company will have
the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30
days following a Change of Control Payment Date, to redeem all, but not less than all, of
the Notes that remain Outstanding 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 right of Holders on the relevant record date to receive interest due on the
relevant Interest Payment Date).



     SECTION 4.10. Designation of Restricted and Unrestricted Subsidiaries.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.15 thereto:



     Section 10.15 Designation of Restricted and Unrestricted Subsidiaries.




     (a) The Board of Directors of the Company may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted
Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of
all outstanding Investments owned by the Company and its Restricted



84









 







Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed
to be an Investment made as of the time of the designation. That designation will only be
permitted if the applicable Restricted Subsidiary meets the definition of an Unrestricted
Subsidiary and if such Investment would be permitted at that time, either pursuant to (i)
Section 10.8 or (ii) the definition of Permitted Investment.




     (b) Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will
be evidenced to the Trustee by filing with the Trustee a certified copy of a Board
Resolution of the Company giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the preceding conditions and was permitted by
Section 10.8. If, at any time, any Unrestricted Subsidiary would fail to meet the
requirements of the definition of “Unrestricted Subsidiary” set forth in Section 1.1 of this
Indenture, 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 as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 10.10, the Company will be in Default of the covenant
in Section 10.10. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if
(i) such Indebtedness is permitted under Section 10.10, calculated on a pro forma basis as
if such designation had occurred at the beginning of the four-quarter reference period; and
(ii) no Default or Event of Default would be in existence following such designation.



     SECTION 4.11. Subsidiary Guarantees.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.16 thereto:



     Section 10.16 Subsidiary Guarantees.




     (a) If, after the Issue Date, (i) any Material Domestic Subsidiary that is not already
a Subsidiary Guarantor incurs any Indebtedness in excess of a De Minimis Amount, or issues
any preferred stock or (ii) any Domestic Restricted Subsidiary incurs any Indebtedness
whatsoever in respect of obligations under the Senior Credit Agreement, then such Subsidiary
(referred to in clause (i) or (ii) of this sentence) will become a Subsidiary Guarantor by
executing and delivering a supplemental indenture, in the form provided for in this
Indenture, to the Trustee within 30 days of the date on which it incurred such Indebtedness
or issued such preferred stock (in each case, referred to in clause (i) or (ii) of this
sentence).




     (b) The Subsidiary Guarantee of a Subsidiary Guarantor will be released upon request of
the Subsidiary Guarantor at such time as such Subsidiary Guarantor is not liable for any
Indebtedness and has no preferred stock outstanding, as long as at the time of such release
(i) no Default or Event of Default has occurred and is continuing, (ii) the



85









 







Subsidiary Guarantor is not an obligor party to any undrawn Credit Facility or any
Credit Facility under which letters of credit are outstanding or any instrument governing
the terms of undrawn Indebtedness or any Guarantee thereof and (iii) the Subsidiary
Guarantor has not been liable under any Indebtedness whatsoever during the immediately
preceding 181 consecutive days.



     SECTION 4.12. Termination of Certain Covenants.



     Subject to the limitations set forth in the preamble to ARTICLE 4 of this First Supplemental
Indenture, Article Ten of the Original Indenture is hereby further amended by adding the following
Section 10.17 thereto:



     Section 10.17 Termination of Certain Covenants.




     From and after the occurrence of an Investment Grade Rating Event, the Company and its
Restricted Subsidiaries shall no longer be subject to clause (iv) of Section 8.1(a) and
Sections 10.8, 10.9, 10.10, 10.11 and 10.12 of this Indenture. Furthermore, after an
Investment Grade Rating Event, the Company may not designate any of its Subsidiaries as
Unrestricted Subsidiaries.



ARTICLE 5

Miscellaneous




     SECTION 5.01. Certain Trustee Matters.



     The recitals contained herein shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness.



     The Trustee makes no representations as to the validity or sufficiency of this First
Supplemental Indenture or the Notes or the proper authorization or the due execution hereof or
thereof by the Company.



     Except as expressly set forth herein, nothing in this First Supplemental Indenture shall alter
the duties, rights or obligations of the Trustee set forth in the Original Indenture.



     The Trustee makes no representation or warranty as to the validity or sufficiency of the
information contained in the offering memorandum related to the Notes, except such information
which specifically pertains to the Trustee itself, or any information incorporated therein by
reference.



     SECTION 5.02. Continued Effect.



     Except as expressly supplemented and amended by this First Supplemental Indenture, the
Original Indenture shall continue in full force and effect in accordance with the provisions
thereof, and the Original Indenture (as supplemented and amended by this First Supplemental
Indenture) is in all respects hereby ratified and confirmed. This First Supplemental Indenture



86









 







and all its provisions shall be deemed a part of the Original Indenture in the manner and to
the extent herein and therein provided.



     SECTION 5.03. Governing Law.



     This First Supplemental Indenture, the Notes and the Subsidiary Guarantees shall be governed
by and construed in accordance with the laws of the State of New York.



     SECTION 5.04. Counterparts.



     This instrument may be executed in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute but one and the same
instrument.



(Remainder of Page Intentionally Left Blank)




87









 





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



	 	 	 	 	 
	 	THE COMPANY:



OASIS PETROLEUM INC.

 	 
	 	By:  	/s/ Thomas B. Nusz
 	 
	 	 	Thomas B. Nusz 	 
	 	 	President and Chief Executive Officer 	 
	 
	 	THE SUBSIDIARY GUARANTORS:



OASIS PETROLEUM LLC

OASIS PETROLEUM NORTH AMERICA LLC

 	 
	 	By:  	/s/ Thomas B. Nusz
 	 
	 	 	Thomas B. Nusz 	 
	 	 	President and Chief Executive Officer 	 
	 



Signature Page to First Supplemental Indenture





 









 









	 	 	 	 	 
	 	TRUSTEE:



U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Steven Finklea
 	 
	 	 	Steven Finklea 	 
	 	 	Vice President 	 
	 



Signature Page to First Supplemental Indenture





 












 





EXHIBIT A




[Face of Note]




CUSIP: [          ]1

ISIN: [          ]2




7.25% Senior Note due 2019




	 	 	 

	No. —

	 	$[                    ]





OASIS PETROLEUM INC. promises to pay to CEDE & CO. or registered assigns, the principal sum of
      
       
       
       
       
DOLLARS on February 1, 2019.



Interest Payment Dates: February 1 and August 1, commencing August 1, 2011



Record Dates: January 15 and July 15



Dated:




	 	 	 	 	 
	 	OASIS PETROLEUM INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



This is one of the Securities of the series

designated 7.25% Senior Notes due 2019

referred to in the within-mentioned Indenture.




	 	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION,


as Trustee

 	 	 
	By:  	 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 
	 





 




				
	1	 	Rule 144A Note CUSIP:  	674215AA6
	 	 	Regulation S Note CUSIP:  	U65204AA4
	 
	2	 	Rule 144A Note ISIN:	US674215AA68
	 	 	Regulation S Note ISIN:	USU65204AA40




A-1









 









[If a Global Note, insert —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 3.5 OF THE INDENTURE, (2) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.9 OF THE
INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.



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



[If a Restricted Global Note or a Restricted Definitive Note, insert — THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.



THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON NOTE OF ANY
INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED NOTES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE,
PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A
NOTES: ONE YEAR (OR SUCH SHORTER PERIOD THEN






A-2









 







REQUIRED UNDER RULE 144 OR ITS SUCCESSOR RULE); OR IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE
TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.



IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT
IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT. AS
USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “UNITED STATES PERSON” HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]









A-3









 








[Back of Note]

7.25% Senior Note due 2019





     Capitalized terms used herein have the meanings assigned to them in the Indenture referred to
below unless otherwise indicated. To the extent that any of the terms and provisions of this Note
conflict with the express provisions of the Indenture, the terms and provisions of the Indenture
shall govern and be controlling.



     (1) Interest. Interest on the Notes will accrue at the rate of 7.25% per
annum and will be payable semi-annually in arrears on February 1 and August 1, beginning on August
1, 2011. Interest on the Notes will accrue from the date of original issuance or, if interest has
already been paid, from the date it was most recently paid. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months. If a payment date is a Legal Holiday at a
Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on such payment for the intervening period. The Company will
pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal at the rate equal to the applicable interest rate on the Notes to the extent
lawful; it will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful. Pursuant to the Indenture (as defined below), each
reference to “interest” appearing herein shall be deemed to refer to “interest and Liquidated
Damages, if any.”



     (2) Method of Payment. The Company 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 January 15 or July 15 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as provided in Section
3.7 of the Indenture with respect to Defaulted Interest. Holders must surrender Notes to the
Paying Agent to collect payments of principal and premium, if any, due at Maturity. The Notes will
be payable as to principal, premium, if any, and interest at the office or agency of the Company
maintained for such purpose at the Corporate Trust Office and in the City and State of New York,
or, at the option of the Company, payment of interest, if any, may be made by check mailed to the
Holders at their addresses set forth in the Security Register; provided that payment by wire
transfer of immediately available funds will be required with respect to principal of and interest
and premium, 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.



     (3) Paying Agent and Security Registrar. Initially, U.S. Bank National
Association, the Trustee under the Indenture, will act as Paying Agent and Security Registrar. The
Company may change any Paying Agent or Security Registrar without notice to any Holder. The
Company or any of its Restricted Subsidiaries may act in any such capacity.



     (4) Indenture. The Notes are a series of Securities issued by the Company
under an Indenture, dated as of February 2, 2011, by and among the Company and the Trustee (the
“Original Indenture”), as amended and supplemented by the First Supplemental Indenture



A-4









 




thereto, dated as of February 2, 2011, by and among the Company, the Subsidiary Guarantors
parties thereto and the Trustee (the “Supplemental Indenture”), and designated as the “7.25% Senior
Notes due 2019.” The Original Indenture, as amended and supplemented by the Supplemental
Indenture, is referred to herein as the “Indenture.” The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The
Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The
Notes are unsecured obligations of the Company. The Indenture does not limit the aggregate
principal amount of Notes or any other series of Securities that may be issued thereunder.




     (5) Optional Redemption. Except as described below or in Section 10.14 of
the Indenture, the Notes are not redeemable until February 1, 2015. On and after February 1, 2015,
the Company may redeem all or a part of the Notes, from time to time, at the following Redemption
Prices (expressed as a percentage of principal amount) plus accrued and unpaid interest, if any, on
the Notes redeemed to the applicable Redemption Date (subject to the rights of Holders of Notes on
the relevant record date to receive interest due on the relevant Interest Payment Date), if
redeemed during the twelve-month period beginning on February 1 of the years indicated below:



	 	 	 	 	 
	Year	 	Redemption Price
	2015
	 	 	103.625	%
	2016
	 	 	101.813	%
	2017 and thereafter
	 	 	100.000	%






     At any time or from time to time prior to February 1, 2015, the Company may also redeem all or
a part of the Notes, at a Redemption Price equal to the Make-Whole Price, subject to the rights of
Holders of Notes on the relevant record date to receive interest due on the relevant Interest
Payment Date.



     “Make-Whole Price” with respect to any Notes to be redeemed, means an amount equal to the
greater of:




     (1) 100% of the principal amount of such Notes; and




     (2) the sum of the present values of (a) the Redemption Price of such Notes at February 1,
2015 (as set forth above) and (b) the remaining scheduled payments of interest from the
Redemption Date to February 1, 2015 (not including any portion of such payments of interest
accrued as of the Redemption Date) discounted back to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined
below) plus 50 basis points;


plus, in the case of both (1) and (2), accrued and unpaid interest on such Notes, if any, to the
Redemption Date.







A-5









 








     “Comparable Treasury Issue” means, with respect to Notes to be redeemed, the U.S. Treasury
security selected by an Independent Investment Banker as having a maturity most nearly equal to the
period from the Redemption Date to February 1, 2015, that would be utilized at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate
debt securities of a comparable maturity; provided that if such period is less than one year, then
the U.S. Treasury security having a maturity of one year shall be used.



     “Comparable Treasury Price” means, with respect to any Redemption Date, (1) the average of the
Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than five
such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations.



     “Independent Investment Banker” means J.P. Morgan Securities LLC, Wells Fargo Securities, LLC
or one of their respective successors, or, if such firms or their respective successors, if any, as
the case may be, are unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the Company.



     “Reference Treasury Dealer” means each of J.P. Morgan Securities LLC, Wells Fargo Securities,
LLC and three additional primary Government Securities dealers in New York City (each a “Primary
Treasury Dealer”) selected by the Company, and their respective successors; provided, however, that
if any such firm or any such successor, as the case may be, shall cease to be a primary Government
Securities dealer in New York City, the Company shall substitute therefor another Primary Treasury
Dealer.



     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third Business Day preceding such Redemption Date.



     “Treasury Rate” means, with respect to any Redemption Date, (1) the yield, under the heading
which represents the average for the immediately preceding week, appearing in the most recently
published statistical release designated “H.15(159)” or any successor publication that is published
weekly by the Board of Governors of the Federal Reserve System and that establishes yields on
actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury
Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no
maturity is within three months before or after the stated maturity, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be determined, and the
Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (2) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields, the rate per annum
equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Redemption



A-6









 




Date. The Treasury Rate shall be calculated on the third Business Day preceding the
Redemption Date.




     The notice of redemption with respect to the foregoing redemption need not set forth the
Make-Whole Price but only the manner of calculation thereof. The Company will notify the Trustee
of the Make-Whole Price with respect to any redemption promptly after the calculation, and the
Trustee shall not be responsible for such calculation.



     Prior to February 1, 2014, the Company may on any one or more occasions redeem up to 35% of
the principal amount of the Notes, with all or a portion of the net cash proceeds of one or more
Equity Offerings at a Redemption Price equal to 107.25% of the principal amount thereof, plus
accrued and unpaid interest, if any, on the Notes redeemed to the Redemption Date (subject to the
right of Holders of record on the relevant record date to receive interest due on the relevant
Interest Payment Date); provided that:




     (1) at least 65% of the aggregate principal amount of the Notes issued on the Issue Date
(excluding Notes held by the Company and its Subsidiaries) remains Outstanding after each such
redemption; and




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



     Notice of any redemption upon an Equity Offering may be given prior to the completion of the
related Equity Offering, and any such redemption or notice may at the Company’s discretion, be
subject to one or more conditions precedent, including, but not limited to completion of the
related Equity Offering.



     In the event that Holders of at least 90% of the 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 in clause (e) of Section 10.14) purchases all
of the Notes held by such Holders, the Company will have the right, upon not less than 30 nor more
than 60 days’ prior notice, given not more than 30 days following a Change of Control Payment Date,
to redeem all, but not less than all, of the Notes that remain Outstanding 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 right of Holders on the relevant record date to receive interest due on
the relevant Interest Payment Date).



     Unless the Company defaults in the payment of the Redemption Price, interest, if any, will
cease to accrue on the Notes or portions thereof called for redemption on the applicable Redemption
Date.



     (6) Mandatory Redemption. The Company is not required to make mandatory
redemption or sinking fund payments with respect to the Notes. However, under certain
circumstances, the Company may be required to offer to purchase Notes pursuant to Section 10.11 or
10.14 of the Indenture.



A-7









 





     (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 $2,000 or
an integral multiple of $1,000 in excess $2,000) of each Holder’s Notes at a purchase price
in cash equal to not less than 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 10 Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $20.0 million, the Company will make an offer (an “Asset Sale Offer”) to all Holders
of Notes and all holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to purchase or
redeem with the proceeds of sales of assets pursuant to Section 10.11 of the Indenture to
purchase the maximum principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds. The offer price in any Asset Sale will be
equal to 100% of the principal amount plus accrued and unpaid interest, if any, to the date
of purchase, in accordance with the procedures set forth in the Indenture. If any Excess
Proceeds remain unapplied after the consummation of an Asset Sale Offer, the Company (or any
Restricted Subsidiary) may use the Excess Proceeds for any purpose not otherwise prohibited
by the Indenture. If the aggregate principal amount of Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Company will use the Excess Proceeds to purchase the Notes and such other pari passu
Indebtedness on a pro rata basis. Holders of Notes that are the subject of an offer to
purchase will receive notice of 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.



     (8) Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date 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 or discharge of the Indenture. Notes in denominations larger than $2,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed.



     (9) Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000.
The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.
The Security Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents in connection with a transfer of its Notes, and the
Company may require a Holder to pay any taxes and fees required by law or permitted by the



A-8









 




Indenture. The Company need not exchange or register the transfer of any Note or portion of a
Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.




     (10) Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.



     (11) Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the Holders of a majority
in aggregate principal amount of the Notes then Outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in aggregate principal amount of the Notes
then Outstanding (including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes). Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to, among other things, cure any
ambiguity, defect or inconsistency, or make any change that does not adversely affect the rights or
interests under the Indenture of any such Holder.



     (12) Defaults and Remedies. In the case of an Event of Default arising from
events of bankruptcy or insolvency specified in clause (ix) or (x) of Section 5.1(a) of the
Indenture, 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 by notice in writing to the Company specifying the Event of Default.
Holders of the Notes 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 Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of the Notes notice of any Default or Event of Default (except a
Default or Event of Default relating to the payment of principal, premium or interest) 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. The Company is required to deliver to the
Trustee annually an Officers’ Certificate regarding the compliance with the Indenture, and the
Company is required, upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default. The Holders of a majority in
aggregate principal amount of the Notes then Outstanding by 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
under the Indenture, except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Holders of a majority in aggregate principal amount of the
then Outstanding Notes will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or the Indenture, that may involve the Trustee in personal
liability, and may take any other action it deems proper that is not inconsistent with any such
direction received from Holders of Notes.



A-9









 





     (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, employee, incorporator, stockholder, member, manager or partner of the Company or any
Subsidiary Guarantor, as such, will have any liability for any obligations of the Company or the
Subsidiary Guarantors under the Notes, the Indenture, the Subsidiary Guarantees, if applicable, 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) Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders under the Indenture, Holders
of Restricted Global Notes and Restricted Definitive Notes shall have all the rights and
obligations set forth in the Registration Rights Agreement. By any such Holder’s acceptance of
Restricted Global Notes or Restricted Definitive Notes, such Holder acknowledges and agrees to the
provisions of the applicable Registration Rights Agreement, including without limitation the
obligations of the Holders with respect to indemnification of the Company to the extent provided
therein.



     (17) 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).



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



     (19) GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE
USED TO CONSTRUE AND ENFORCE THE INDENTURE AND THIS NOTE.



     The Company will furnish to any Holder upon written request and without charge a copy of the
Original Indenture, the Supplemental Indenture and/or the Registration Rights Agreement. Requests
may be made to:



Oasis Petroleum Inc.

First City Tower

1001 Fannin, Suite 1500




A-10









 





Houston, Texas 77002

Attention: General Counsel





A-11











 





Assignment Form




     To assign this Note, fill in the form below:


(I) or (we) assign and transfer this Note to: 
 




(Insert assignee’s legal name)




 





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




 





 





 





 





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



and irrevocably appoint 
 




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



Date: _______________





Your Signature: _______________________________

(Sign exactly as your name appears on the face of

this Note)





Signature Guarantee*: _____________________






 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).




A-12









 










Option of Holder to Elect Purchase




     If you want to elect to have this Note purchased by the Company pursuant to Section 10.11 or
10.14 of the Indenture, check the appropriate box below:



o Section 10.11                    o Section 10.14




     If you want to elect to have only part of the Note purchased by the Company pursuant to
Section 10.11 or Section 10.14 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-13









 










[If a Global Note, insert as a separate page —




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:



	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	Amount of	 	Principal	 	 
	 	 	Decrease in	 	Increase in	 	Amount	 	Signature of
	 	 	Principal	 	Principal	 	of this Global	 	Authorized
	 	 	Amount	 	Amount	 	Note Following	 	Officer of
	Date of	 	of	 	of	 	Such Decrease	 	Trustee or
	Exchange	 	this Global Note	 	this Global Note	 	(or Increase)	 	Custodian]
	 	 	 	 	 	 	 	 	 





A-14









 






[If the Note is subject to a Subsidiary Guarantee, insert as a separate page—




SUBSIDIARY GUARANTEE NOTATION




     For value received, each Subsidiary 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 Indenture dated as of February 2, 2011 (the
“Original Indenture”) by and between Oasis Petroleum Inc., a Delaware corporation (the “Company”),
and U.S. Bank National Association (the “Trustee”), as amended and supplemented by the First
Supplemental Indenture thereto dated as of February 2, 2011 by and among the Company, the
Subsidiary Guarantors parties thereto and the Trustee (the “First Supplemental Indenture”), (a) the
due and punctual payment of the principal of, premium, if any, and interest on, the Notes, whether
at Stated Maturity, by acceleration, redemption or otherwise, the due and punctual payment of
interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and
punctual performance of all other obligations of the Company 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 Subsidiary Guarantors to the
Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth in Article Fourteen of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee, which is subject to release in the
circumstances set forth therein. Each Holder of a Note, by accepting the same, agrees to and shall
be bound by such provisions.



     Capitalized terms used but not defined herein have the meanings given to them in the
Indenture.




	 	 	 	 	 
	 	Subsidiary Guarantors:

 	 
	 	[NAMES OF SUBSIDIARY GUARANTORS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	


 	] 
	 




A-15











 





EXHIBIT B




FORM OF CERTIFICATE OF TRANSFER




Oasis Petroleum Inc.

First City Tower

1001 Fannin, Suite 1500

Houston, Texas 77002




U.S. Bank National Association

5555 San Felipe, Suite 1150

Houston, Texas 77056

Attention: Corporate Trust Services




     Re: $[                    ] 7.25% Senior Notes due 2019



     Reference is hereby made to the Indenture, dated as of February 2, 2011 (the “Original
Indenture”), by and between Oasis Petroleum Inc., a Delaware corporation (the “Company”), and U.S.
Bank National Association (the “Trustee”), as amended and supplemented by the First Supplemental
Indenture thereto, dated as of February 2, 2011, by and among the Company, the Subsidiary
Guarantors parties thereto and the Trustee (the “Supplemental Indenture”). The Original Indenture,
as amended and supplemented by the Supplemental Indenture, is referred to herein as the
"Indenture.” 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. o 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 believed and 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. o 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). 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. o 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) o such Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;



or





     (b) o such Transfer is being effected to the Parent, the Company or a
subsidiary thereof;



or





     (c) o 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) o 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



B-2









 







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 $100,000, 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.



     4. o Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.



     (a) o 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) o 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, in the case of a transfer from a Restricted
Global Note or a Restricted Definitive Note, the Transferor hereby further certifies that (a) 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, (b) 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, (c) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (d) the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person, 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-3









 





     (c) o 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.



     This certificate and the statements contained herein are made for your benefit and the benefit
of the Company.



	 	 	 	 	 
	 	 
[Insert Name of Transferor]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	Dated:                       	 	Title:  	 	 



B-4









 






	 	 	 	 	 



ANNEX A TO CERTIFICATE OF TRANSFER





	1.	 	The Transferor owns and proposes to transfer the following:





[CHECK ONE OF (a) OR (b)]





	 	i.	 	o a beneficial interest in the:






	 	(i)	 	o 144A Global Note (CUSIP 674215AA6), or
	 
	 	(ii)	 	o Regulation S Global Note (CUSIP U65204AA4), or
	 
	 	(iii)	 	o IAI Global Note (CUSIP 674215AB4); or






	 	(b)	 	o a Restricted Definitive Note.






	2.	 	After the Transfer the Transferee will hold:





[CHECK ONE]





	 	(a)	 	o a beneficial interest in the:






	 	(i)	 	o 144A Global Note (CUSIP 674215AA6), or
	 
	 	(ii)	 	o Regulation S Global Note (CUSIP U65204AA4), or
	 
	 	(iii)	 	o IAI Global Note (CUSIP 674215AB4); or
	 
	 	(iv)	 	o Unrestricted Global Note (CUSIP 674215AC2); or






	 	(b)	 	o a Restricted Definitive Note; or
	 
	 	(c)	 	o an Unrestricted Definitive Note,






in accordance with the terms of the Indenture.



B-5









 





EXHIBIT C




FORM OF CERTIFICATE OF EXCHANGE




Oasis Petroleum Inc.

First City Tower

1001 Fannin, Suite 1500

Houston, Texas 77002




U.S. Bank National Association

5555 San Felipe, Suite 1150

Houston, Texas 77056

Attention: Corporate Trust Services




     Re: 7.25% Senior Notes due 2019



(CUSIP                     )




     Reference is hereby made to the Indenture, dated as of February 2, 2011 (the “Original
Indenture”), by and between Oasis Petroleum Inc., a Delaware corporation (the “Company”), and U.S.
Bank National Association (the “Trustee”), as amended and supplemented by the First Supplemental
Indenture thereto, dated as of February 2, 2011, by and among the Company, the Subsidiary
Guarantors parties thereto and the Trustee (the “Supplemental Indenture”). The Original Indenture,
as amended and supplemented by the Supplemental Indenture, is referred to herein as the
"Indenture.” Capitalized terms used but not defined herein shall have the meanings given to them
in the Indenture.



                                             , (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) o 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) o 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) o 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) o 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 or Beneficial Interests in Restricted Global
Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes



     (a) o 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.



     (b) o 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



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Note for a beneficial interest in the [CHECK ONE] o 144A Global Note, o Regulation
S Global Note, o 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 Global Notes 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:  	 	 
	Dated:                               	 	Title:  	 	 
	 




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EXHIBIT D




FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR




Oasis Petroleum Inc.

First City Tower

1001 Fannin, Suite 1500

Houston, Texas 77002




U.S. Bank National Association

5555 San Felipe, Suite 1150

Houston, Texas 77056

Attention: Corporate Trust Services




     Re: 7.25% Senior Notes due 2019



(CUSIP                     )




     Reference is hereby made to the Indenture, dated as of February 2, 2011 (the “Original
Indenture”), by and between Oasis Petroleum Inc., a Delaware corporation (the “Company”), and U.S.
Bank National Association (the “Trustee”), as amended and supplemented by the First Supplemental
Indenture thereto, dated as of February 2, 2011, by and among the Company, the Subsidiary
Guarantors parties thereto and the Trustee (the “Supplemental Indenture”). The Original Indenture,
as amended and supplemented by the Supplemental Indenture, is referred to herein as the
"Indenture.” 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)	 	o a beneficial interest in a Global Note, or
	 
	 	(b)	 	o 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



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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 $100,000, 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.



     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.



     The Trustee 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:  	 	 
	Dated:                                	 	Title:  	 	 



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EXHIBIT E




[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS]





     Supplemental Indenture (this “Supplemental Indenture”), dated as of                     ,
20   , among                                          (the “Guaranteeing Subsidiary”), a subsidiary of Oasis Petroleum
Inc., a Delaware corporation (or its permitted successor, the “Company”), the Company, the existing
Subsidiary Guarantors (as defined in the Indenture referred to herein), if any, and U.S. Bank
National Association, as trustee under the Indenture referred to below (or its permitted successor,
the “Trustee”).



WITNESSETH




     WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated
as of February 2, 2011, by and between the Company and the Trustee, as amended and supplemented by
the First Supplemental Indenture thereto, dated as of February 2, 2011, by and among the Company,
the Subsidiary Guarantors parties thereto and the Trustee (the “Indenture”), providing for the
issuance of the Company’s 7.25% Senior Notes due 2019 (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 become a Subsidiary Guarantor (as defined in the Indenture); and



     WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is authorized to execute and
deliver this First 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, the
Company, the other Subsidiary Guarantors (if any) 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 Indenture
including but not limited to Article Fourteen thereof.



     3. Execution And Delivery. The Subsidiary Guarantee shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such Subsidiary Guarantee.



     4. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder, member, manager or partner of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company or the
Guaranteeing Subsidiary under the Notes, the Subsidiary Guarantee, the Indenture or this First
Supplemental Indenture or for any claim based on, in respect of, or by reason of, such



E-1









 







obligations or their creation. Each Holder of the 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.



     5. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE AND ENFORCE THIS FIRST SUPPLEMENTAL INDENTURE.



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



     7. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.



     8. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this First 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 Company.



[SIGNATURE PAGE FOLLOWS]







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



	 	 	 	 	 
	Dated:                     , 20    




	 	[Guaranteeing Subsidiary]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[Company]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[Existing Subsidiary Guarantors, if any]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[Trustee],

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 




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