exv4w1





Exhibit 4.1




Execution Copy




LINN ENERGY, LLC




LINN ENERGY FINANCE CORP.



AND



THE GUARANTORS NAMED ON THE SIGNATURE PAGE HEREOF



 





8.625% SENIOR NOTES DUE 2020



 





INDENTURE



Dated as of April 6, 2010



 





U.S. BANK NATIONAL ASSOCIATION,




As Trustee



 









 





CROSS-REFERENCE TABLE*




			
	Trust Indenture	 	Indenture
	Act Section	 	Section
	310(a)(1)
	 	7.10
	(a)(2)
	 	7.10
	(a)(3)
	 	N/A
	(a)(4)
	 	N/A
	(a)(5)
	 	7.10
	(b)
	 	7.10
	(c)
	 	N/A
	311(a)
	 	7.11
	(b)
	 	7.11
	(c)
	 	N/A
	312(a)
	 	2.05
	(b)
	 	11.03
	(c)
	 	11.03
	313(a)
	 	7.06
	(b)(1)
	 	7.06
	(b)(2)
	 	7.06, 7.07
	(c)
	 	7.06, 11.02
	(d)
	 	7.06
	314(a)
	 	4.03, 4.04, 11.02
	(b)
	 	N/A
	(c)(1)
	 	11.04
	(c)(2)
	 	11.04
	(c)(3)
	 	N/A
	(d)
	 	N/A
	(e)
	 	11.05
	(f)
	 	N/A
	315(a)
	 	7.01
	(b)
	 	7.05, 11.02
	(c)
	 	7.01
	(d)
	 	7.01
	(e)
	 	6.11
	316(a)(last sentence)
	 	2.08
	(a)(1)(A)
	 	6.05
	(a)(1)(B)
	 	6.04
	(a)(2)
	 	N/A
	(b)
	 	6.07
	(c)
	 	9.04
	317(a)(1)
	 	6.08
	(a)(2)
	 	6.09
	(b)
	 	2.04
	318(a)
	 	11.01
	(b)
	 	N/A
	(c)
	 	11.01








 




			
	N/A	 	means not applicable.
	 
	*	 	This Cross-Reference Table is not part of the Indenture.




i









 










TABLE OF CONTENTS




	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	1	 
	Section 1.01

	 	Definitions
	 	 	1	 
	Section 1.02

	 	Other Definitions
	 	 	32	 
	Section 1.03

	 	Incorporation by Reference of Trust Indenture Act
	 	 	33	 
	Section 1.04

	 	Section 1.04 Rules of Construction
	 	 	33	 
	 
	 	 	 	 	 	 
	ARTICLE 2 THE NOTES	 	 	34	 
	Section 2.01

	 	Form and Dating
	 	 	34	 
	Section 2.02

	 	Execution and Authentication
	 	 	34	 
	Section 2.03

	 	Registrar and Paying Agent
	 	 	35	 
	Section 2.04

	 	Paying Agent to Hold Money in Trust
	 	 	35	 
	Section 2.05

	 	Noteholder Lists
	 	 	35	 
	Section 2.06

	 	Transfer and Exchange
	 	 	36	 
	Section 2.07

	 	Replacement Notes
	 	 	36	 
	Section 2.08

	 	Outstanding Notes
	 	 	36	 
	Section 2.09

	 	Temporary Notes
	 	 	37	 
	Section 2.10

	 	Cancellation
	 	 	37	 
	Section 2.11

	 	Defaulted Interest
	 	 	37	 
	Section 2.12

	 	CUSIP Numbers
	 	 	37	 
	Section 2.13

	 	Issuance of Additional Notes
	 	 	37	 
	Section 2.14

	 	Persons Deemed Owners
	 	 	38	 
	 
	 	 	 	 	 	 
	ARTICLE 3 REDEMPTION AND PREPAYMENT	 	 	38	 
	Section 3.01

	 	Notices to Trustee
	 	 	38	 
	Section 3.02

	 	Selection of Notes to Be Redeemed
	 	 	39	 
	Section 3.03

	 	Notice of Redemption
	 	 	39	 
	Section 3.04

	 	Effect of Notice of Redemption
	 	 	40	 
	Section 3.05

	 	Deposit of Redemption Price
	 	 	40	 
	Section 3.06

	 	Notes Redeemed in Part
	 	 	41	 
	Section 3.07

	 	Optional Redemption
	 	 	41	 
	Section 3.08

	 	Mandatory Redemption
	 	 	42	 
	Section 3.09

	 	Offer to Purchase by Application of Excess Proceeds
	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE 4 COVENANTS	 	 	44	 
	Section 4.01

	 	Payment of Notes
	 	 	44	 
	Section 4.02

	 	Maintenance of Office or Agency
	 	 	44	 
	Section 4.03

	 	Reports
	 	 	45	 
	Section 4.04

	 	Compliance Certificate
	 	 	46	 
	Section 4.05

	 	Taxes
	 	 	46	 
	Section 4.06

	 	Stay, Extension and Usury Laws
	 	 	46	 
	Section 4.07

	 	Limitation on Restricted Payments
	 	 	47	 
	Section 4.08

	 	Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries
	 	 	51	 






ii









 






	 	 	 	 	 	 	 

	Section 4.09

	 	Limitation on Incurrence of Indebtedness and Issuance of
Preferred Stock 	 	 	53	 
	Section 4.10

	 	Limitation on Asset Sales
	 	 	57	 
	Section 4.11

	 	Limitation on Transactions with Affiliates
	 	 	59	 
	Section 4.12

	 	Limitation on Liens
	 	 	61	 
	Section 4.13

	 	Additional Subsidiary Guarantees
	 	 	61	 
	Section 4.14

	 	Existence
	 	 	62	 
	Section 4.15

	 	Offer to Repurchase Upon Change of Control
	 	 	62	 
	Section 4.16

	 	No Partial Inducements
	 	 	65	 
	Section 4.17

	 	Limitations on Finance Corp. Activities
	 	 	65	 
	Section 4.18

	 	Designation of Restricted and Unrestricted Subsidiaries
	 	 	65	 
	 
	 	 	 	 	 	 
	ARTICLE 5 SUCCESSORS	 	 	65	 
	Section 5.01

	 	Merger, Consolidation, or Sale of Assets
	 	 	65	 
	Section 5.02

	 	Successor Substituted
	 	 	67	 
	 
	 	 	 	 	 	 
	ARTICLE 6 DEFAULTS AND REMEDIES	 	 	68	 
	Section 6.01

	 	Events of Default
	 	 	68	 
	Section 6.02

	 	Acceleration
	 	 	70	 
	Section 6.03

	 	Other Remedies
	 	 	71	 
	Section 6.04

	 	Waiver of Past Defaults
	 	 	71	 
	Section 6.05

	 	Control by Majority
	 	 	71	 
	Section 6.06

	 	Limitation on Suits
	 	 	71	 
	Section 6.07

	 	Rights of Holders of Notes to Receive Payment
	 	 	72	 
	Section 6.08

	 	Collection Suit by Trustee
	 	 	72	 
	Section 6.09

	 	Trustee is Authorized to File Proofs of Claim
	 	 	72	 
	Section 6.10

	 	Priorities
	 	 	73	 
	Section 6.11

	 	Undertaking for Costs
	 	 	73	 
	 
	 	 	 	 	 	 
	ARTICLE 7 TRUSTEE	 	 	73	 
	Section 7.01

	 	Duties of Trustee
	 	 	73	 
	Section 7.02

	 	Rights of Trustee
	 	 	75	 
	Section 7.03

	 	Individual Rights of Trustee
	 	 	76	 
	Section 7.04

	 	Trustee’s Disclaimer
	 	 	76	 
	Section 7.05

	 	Notice of Defaults
	 	 	76	 
	Section 7.06

	 	Reports by Trustee to Holders of the Notes
	 	 	76	 
	Section 7.07

	 	Compensation and Indemnity
	 	 	77	 
	Section 7.08

	 	Replacement of Trustee
	 	 	78	 
	Section 7.09

	 	Successor Trustee by Merger, etc
	 	 	79	 
	Section 7.10

	 	Eligibility; Disqualification
	 	 	79	 
	Section 7.11

	 	Preferential Collection of Claims Against Issuers
	 	 	79	 
	 
	 	 	 	 	 	 
	ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE	 	 	79	 
	Section 8.01

	 	Option to Effect Legal Defeasance or Covenant Defeasance
	 	 	79	 
	Section 8.02

	 	Legal Defeasance and Discharge
	 	 	80	 
	Section 8.03

	 	Covenant Defeasance
	 	 	80	 






iii









 






	 	 	 	 	 	 	 

	Section 8.04

	 	Conditions to Legal or Covenant Defeasance
	 	 	81	 
	Section 8.05

	 	Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions
	 	 	82	 
	Section 8.06

	 	Repayment to Issuers
	 	 	83	 
	Section 8.07

	 	Reinstatement
	 	 	83	 
	Section 8.08

	 	Discharge
	 	 	83	 
	 
	 	 	 	 	 	 
	ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER	 	 	84	 
	Section 9.01

	 	Without Consent of Holders of Notes
	 	 	84	 
	Section 9.02

	 	With Consent of Holders of Notes
	 	 	85	 
	Section 9.03

	 	Compliance with Trust Indenture Act
	 	 	87	 
	Section 9.04

	 	Revocation and Effect of Consents
	 	 	87	 
	Section 9.05

	 	Notation on or Exchange of Notes
	 	 	88	 
	Section 9.06

	 	Trustee to Sign Amendments, etc
	 	 	88	 
	Section 9.07

	 	Acts of Holders
	 	 	88	 
	 
	 	 	 	 	 	 
	ARTICLE 10 GUARANTEES OF NOTES	 	 	89	 
	Section 10.01

	 	Subsidiary Guarantees
	 	 	89	 
	Section 10.02

	 	Guarantors May Consolidate, etc., on Certain Terms
	 	 	90	 
	Section 10.03

	 	Releases of Subsidiary Guarantees
	 	 	91	 
	Section 10.04

	 	Limitation on Guarantor Liability
	 	 	91	 
	Section 10.05

	 	“Trustee” to Include Paying Agent
	 	 	92	 
	 
	 	 	 	 	 	 
	ARTICLE 11 MISCELLANEOUS	 	 	92	 
	Section 11.01

	 	Trust Indenture Act Controls
	 	 	92	 
	Section 11.02

	 	Notices
	 	 	92	 
	Section 11.03

	 	Communication by Holders of Notes with Other Holders of
Notes 	 	 	94	 
	Section 11.04

	 	Certificate and Opinion as to Conditions Precedent
	 	 	94	 
	Section 11.05

	 	Statements Required in Certificate or Opinion
	 	 	94	 
	Section 11.06

	 	Rules by Trustee and Agents
	 	 	95	 
	Section 11.07

	 	No Personal Liability of Directors, Officers, Employees
and Unitholders	 	 	95	 
	Section 11.08

	 	Governing Law
	 	 	95	 
	Section 11.09

	 	No Adverse Interpretation of Other Agreements
	 	 	95	 
	Section 11.10

	 	Successors
	 	 	95	 
	Section 11.11

	 	Severability
	 	 	96	 
	Section 11.12

	 	Table of Contents, Headings, etc
	 	 	96	 
	Section 11.13

	 	Counterparts
	 	 	96	 
	Section 11.14

	 	Benefits of Indenture
	 	 	96	 
	Section 11.15

	 	Language of Notices, Etc
	 	 	96	 






iv









 






APPENDIX AND ANNEXES




			
	RULE 144A/REGULATION S APPENDIX
	 	App. - 1
	 	 	 
	EXHIBIT 1 Form of Initial Note
	 	Exhibit 1 to App. - 1
	 	 	 
	EXHIBIT 2 Form of Exchange Note
	 	Exhibit 2 to App. - 1
	 	 	 
	ANNEX A Form of Supplemental Indenture
	 	A - 1






v









 






     This INDENTURE, dated as of April 6, 2010 is among LINN ENERGY, LLC, a Delaware limited
liability company (the “Company”), LINN ENERGY FINANCE CORP., a Delaware corporation (“Finance
Corp.” and, together with the Company, the “Issuers”), the guarantors listed on the signature page
hereof (each, a “Guarantor” and, collectively, the “Guarantors”) and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (the “Trustee”).



     The Issuers, the Guarantors and the Trustee agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the Issuers’ Initial Notes, Exchange Notes and
Additional Notes:



ARTICLE 1

DEFINITIONS AND INCORPORATION

BY REFERENCE


Section 1.01 Definitions.




     “Additional Assets” means:




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




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




     (3) Capital Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary; provided, however, that any such Restricted Subsidiary described in
clause (2) or (3) is primarily engaged in the Oil and Gas Business.



     “Additional Interest” means all Additional Interest then owing pursuant to Section 5 of the
Registration Rights Agreement referred to in clause (1) of the definition of “Registration Rights
Agreement” in the Appendix. Unless the context indicates otherwise, all references to “interest”
in this Indenture or the Notes shall be deemed to include any Additional Interest.



     “Additional Notes” means, subject to the Company’s compliance with Section 4.09,
8.625% Senior Notes due 2020 issued from time to time after the Initial Issuance Date under the
terms of this Indenture (other than pursuant to Section 2.06, 2.07, 2.09,
3.06, 4.10, 4.15 or 9.05 of this Indenture or Sections 2.3
or 2.4 of the Appendix and other than Exchange Notes issued pursuant to an exchange offer
for Initial Notes outstanding under this Indenture).



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




     (1) the sum of:




     (a) discounted future net revenue from proved crude oil and natural gas
reserves of such Person and its Restricted Subsidiaries calculated in



 









 






accordance with SEC guidelines before any state or federal or other income
taxes, as estimated by the Company in a reserve report prepared as of the end of the
fiscal year of such Person for which audited financial statements are available, as
increased by, as of the date of determination, the estimated discounted future net
revenue from:




     (i) estimated proved crude oil and natural gas reserves of such Person
and its Restricted Subsidiaries attributable to acquisitions consummated
since the date of such reserve report, which reserves were not reflected in
such reserve report, and




     (ii) estimated crude oil and natural gas reserves of such Person and
its Restricted Subsidiaries attributable to extensions, discoveries and
other additions and upward revisions of estimates of proved crude oil and
natural gas reserves (including previously estimated development costs
incurred during the period and the accretion of discount since the prior
period end) due to exploration, development or exploitation, production or
other activities which would, in accordance with standard industry practice,
cause such revisions, in the case of clauses (i) and (ii) calculated in
accordance with SEC guidelines (utilizing the prices for the fiscal quarter
ending prior to the date of determination),




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




     (A) estimated proved crude oil and natural gas reserves of such
Person and its Restricted Subsidiaries reflected in such reserve
report produced or disposed of since the date of such reserve report,
and




     (B) reductions in the estimated crude oil and natural gas
reserves of such Person and its Restricted Subsidiaries reflected in
such reserve report since the date of such reserve report due to
changes in geological conditions or other factors which would, in
accordance with standard industry practice, cause such revisions, in
the case of clauses (A) and (B) calculated in accordance with SEC
guidelines (utilizing the prices for the fiscal quarter ending prior
to the date of determination);




provided, however, that, in the case of each of the determinations made pursuant to
clauses (i), (ii), (A) and (B) above, such increases and decreases shall be
estimated by the Company’s petroleum engineers;




     (b) the capitalized costs that are attributable to crude oil and natural gas
properties of such Person and its Restricted Subsidiaries to which no proved crude
oil and natural gas reserves are attributable, based on such Person’s books



2









 






and records as of a date no earlier than the date of such Person’s latest
available annual or quarterly financial statements;




     (c) the Net Working Capital of such Person as of a date no earlier than the
date of such Person’s latest available annual or quarterly financial statements; and




     (d) the greater of:




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




     (ii) the appraised value, as estimated by independent appraisers, of
other tangible assets of such Person and its Restricted Subsidiaries as of a
date no earlier than the date of such Person’s latest available annual or
quarterly financial statements (provided that such Person shall not be
required to obtain such an appraisal of such assets if no such appraisal has
been performed);



          minus




          (2) the sum of:





     (a) Minority Interests;




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




     (c) to the extent included in clause (1)(a) above, the discounted future net
revenue, calculated in accordance with SEC guidelines (utilizing the prices utilized
in such Person’s year end reserve report), attributable to reserves subject to
participation interests, overriding royalty interests or other interests of third
parties, pursuant to participation, partnership, vendor financing or other
agreements then in effect, or which otherwise are required to be delivered to third
parties;




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




     (e) the discounted future net revenue, calculated in accordance with SEC
guidelines, attributable to reserves subject to Dollar-Denominated



3









 






Production Payments that, based on the estimates of production and price
assumptions included in determining the discounted future net revenue specified in
clause (1)(a) above, would be necessary to satisfy fully the obligations of such
Person and its Restricted Subsidiaries with respect to Dollar-Denominated Production
Payments on the schedules specified with respect thereto.



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



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



     “Agent” means any Registrar or Paying Agent.



     “Applicable Law,” except as the context may otherwise require, means all applicable laws,
rules, regulations, ordinances, judgments, decrees, injunctions, writs and orders of any court or
governmental or congressional agency or authority and rules, regulations, orders, licenses and
permits of any United States federal, state, municipal, regional, or other governmental body,
instrumentality, agency or authority.



     “Applicable Procedures” of a Depository means, with respect to any matter at any time, the
policies and procedures of such Depository, if any, that are applicable to such matter at such
time.



     “Asset Sale” means:




     (1) the sale, lease, conveyance or other disposition of any properties or assets
(including by way of a Production Payment or a sale and leaseback transaction or mergers,
consolidations or otherwise); provided, however, that the disposition of all or
substantially all of the properties or assets of the Company and its Restricted Subsidiaries
taken as a whole will not be an “Asset Sale,” but will be governed by the provisions of
Section 4.15 and/or the provisions of Section 5.01 and not by the provisions
of Section 4.10; and




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



4









 






Notwithstanding the preceding, the following items will not be deemed to be Asset Sales:




     (1) any single transaction or series of related transactions that involves properties
or assets having a fair market value of less than $10.0 million;




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




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




     (4) any disposition of equipment, inventory, products, accounts receivable or other
properties or assets in the ordinary course of business;




     (5) the disposition of cash or Cash Equivalents, Hedging Contracts or other financial
instruments in the ordinary course of business;




     (6) a Restricted Payment that is permitted by Section 4.07 or a Permitted
Investment;




     (7) the farm-out, lease or sublease of developed or undeveloped crude oil or natural
gas properties owned or held by the Company or any of its Restricted Subsidiaries in the
ordinary course of business or in exchange for crude oil and natural gas properties owned or
held by another Person;




     (8) any trade or exchange by the Company or any of its Restricted Subsidiaries of oil
and gas properties or other properties or assets for oil and gas properties or other
properties or assets owned or held by another Person, provided that the fair market value of
the properties or assets traded or exchanged by the Company or such Restricted Subsidiary
(together with any cash) is reasonably equivalent to the fair market value of the properties
or assets (together with any cash) to be received by the Company or such Restricted
Subsidiary, and provided further that any cash received must be applied in accordance with
the provisions of Section 4.10;




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




     (10) 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;




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




     (12) the grant in the ordinary course of business of any non-exclusive license or
sublicense of patents, trademarks, registrations therefor and other similar intellectual
property, including without limitation licenses of seismic data; and



5









 






     (13) the disposition of oil and natural gas properties in connection with tax credit
transactions complying with Section 29 of the Internal Revenue Code or any successor or
analogous provisions of the Internal Revenue Code.



     “Attributable Debt” in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP. As used in the preceding sentence, the “net
rental payments” under any lease for any period shall mean the sum of rental and other payments
required to be paid with respect to such period by the lessee thereunder, excluding any amounts
required to be paid by such lessee on account of maintenance and repairs, insurance, taxes,
assessments, water rates or similar charges. In the case of any lease that is terminable by the
lessee upon payment of penalty, such net rental payment shall also include the amount of such
penalty, but no rent shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated.



     “Available Cash” has the meaning assigned to such term in the LLC Agreement, as in effect on
the date of this Indenture.



     “Bankruptcy Law” means Title 11, United States Code, as may be amended from time to time, or
any similar federal or state law for the relief of debtors.



     “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any particular “person”
(as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to
have beneficial ownership of all securities that such “person” has the right to acquire by
conversion or exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and
“Beneficially Owned” have correlative meanings.



     “Board of Directors” means:




     (1) with respect to Finance Corp., the board of directors of Finance Corp.;




     (2) with respect to the Company, the board of directors of the Company or any
authorized committee thereof; and




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



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



6









 





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



     “Capital Lease Obligation” means, at the time any determination is to be made, the amount of
the liability in respect of a capital lease that would at that time be required to be capitalized
on a balance sheet 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.



     “Capital Stock” means:




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




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




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




     (4) any other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing Person,


but excluding from all of the foregoing any debt securities convertible into Capital Stock,
regardless of whether such debt securities include any right of participation with Capital Stock.




     “Cash Equivalents” means:




     (1) United States dollars;




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




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




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



7









 






     (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; and




     (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.



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




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




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




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




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



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



     “Clearstream” means Clearstream Banking, S.A., or any successor securities clearing agency.



8









 





     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
successor statute.



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




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




     (2) 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




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




     (4) depreciation, depletion, amortization (including amortization of intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior period),
impairment and other non-cash expenses (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) unrealized non-cash losses resulting from foreign currency balance sheet
adjustments required by GAAP to the extent such losses were deducted in computing such
Consolidated Net Income; plus




     (6) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or
expense; minus




     (7) 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




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


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




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



9









 






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




     (2) the Net Income of any Restricted Subsidiary of the Company 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, partners or members;




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




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




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




     (6) unrealized losses and gains under Hedging Contracts included in the determination
of Consolidated Net Income, including, without limitation, those resulting from the
application of Statement of Financial Accounting Standards No. 133, will be excluded;




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




     (8) items classified as extraordinary or nonrecurring gains and losses (less all fees
and expenses related thereto) and the related tax effects, in each case according to GAAP,
will be excluded; and




     (9) income resulting from transfers of assets (other than cash) between such Person or
any of its Restricted Subsidiaries, on the one hand, and an Unrestricted Subsidiary of such
Person, on the other hand, will be excluded.



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




10











 






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




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



     “Continuing 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 date of this Indenture; or




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



     “Corporate Trust Office of the Trustee” means the office of the Trustee in the City of New
York at which at any time its corporate trust business shall be administered, which office at the
date hereof is located at 100 Wall Street, Suite 1600, New York, New York 10005, Attn: Corporate
Trust Department, or such other address in the City of New York as the Trustee may designate from
time to time by notice to the Holders and the Issuers, or the principal corporate trust office in
the City of New York of any successor Trustee (or such other address as a successor Trustee may
designate from time to time by notice to the Holders and the Issuers).



     “Credit Agreement” means that certain Fourth Amended and Restated Credit Agreement, dated as
of April 28, 2009, among the Company, BNP Paribas, as Administrative Agent, and the other lenders
party thereto, including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, in each case as amended, restated, modified, renewed,
refunded, replaced or refinanced from time to time.



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



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



     “date of this Indenture” means April 6, 2010.



11









 





     “Debt Issuance” means, with respect to the Company or any of its Restricted Subsidiaries, one
or more issuances after the date of this Indenture of Indebtedness evidenced by notes, debentures,
bonds or other similar securities or instruments.



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



     “De Minimis Guaranteed Amount” means a principal amount of Indebtedness that does not exceed
$5.0 million.



     “Depository” has the meaning provided in the Appendix.



     “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
final stated maturity date of the Notes. Notwithstanding the preceding sentence, any Capital Stock
that would constitute Disqualified Stock solely because the holders of the Capital Stock have the
right to require the Company to repurchase or redeem such Capital Stock upon the occurrence of a
change of control or an asset sale will not constitute Disqualified Stock if (x) the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant
to such provisions unless such repurchase or redemption complies with Section 4.07 or (y)
the terms of such Capital Stock provide that the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions prior to the Company’s purchase of the Notes as is
required to be purchased pursuant to the terms of this Indenture. The amount (or principal amount)
of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be
the maximum amount that the Company and its Restricted Subsidiaries may become obligated to pay
upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified
Stock, exclusive of accrued dividends.



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



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



     “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 any public or private sale of Capital Stock (other than Disqualified
Stock) made for cash on a primary basis by the Company after the date of this Indenture.



     “Equity Repurchase” means the repurchase or other acquisition or retirement for value of any
Equity Interests of the Company pursuant to any stock repurchase plan of the Company



12









 




approved by the Board of Directors of the Company and effected in accordance with Rule 10b-18
under the Securities Exchange Act of 1934, as amended, or otherwise in accordance with Applicable
Law.




     “Euroclear” means Euroclear Bank S.A./N.V. or any successor securities clearing agency.



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



     “Exchange Notes” has the meaning specified in the Appendix.



     “Existing Immaterial Subsidiaries” means, collectively, Linn Western Processing, LLC, Linn
Western Operating, Inc., Mid Atlantic Well Service, Inc. and Penn West Storage, LLC.



     “Existing Indebtedness” means the aggregate principal amount of Indebtedness of the Company
and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement and
intercompany Indebtedness, but including the Existing Senior Notes) in existence on the date of
this Indenture, until such amounts are repaid.



     “Existing
Senior Notes” means the $255,927,000 aggregate principal
amount of
97/8% Senior Notes
due 2018 issued by the Issuers on June 27, 2008 and the $250,000,000 aggregate principal amount of
113/4% Senior Notes due 2017 issued by the Issuers on May 18, 2009.



     “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 applicable
four-quarter reference period 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 the Oil and Gas Business), or any Person or any of its
Restricted Subsidiaries acquired by the specified Person or any of its Restricted
Subsidiaries, and including in each case any related financing transactions and increases in
ownership of Restricted Subsidiaries, during the applicable 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 the Consolidated Cash Flow for such reference period will



13









 






be calculated giving pro forma effect to any expense and cost reductions or synergies
that have occurred or are reasonably expected to occur, in the reasonable judgment of the
chief financial or accounting officer of the Company (regardless of whether those cost
savings or operating improvements could then be reflected in pro forma financial statements
in accordance with Regulation S-X promulgated under the Securities Act or any other
regulation or policy of the 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 of the specified Person on the
Calculation Date will be deemed to have been a Restricted Subsidiary of the specified Person
at all times during such four-quarter period;




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




     (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 obligations arising under
any Hedging Contract applicable to such Indebtedness if such Hedging Contract has a
remaining term as at the Calculation Date in excess of 12 months).



     “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 any interest attributable to
Dollar-Denominated Production Payments but including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of letter of
credit or bankers’ acceptance financings), and net of the effect of all payments made or
received pursuant to interest rate Hedging Contracts; plus




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



14









 






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




     (4) all dividends on any series of preferred securities of such Person or any of its
Restricted Subsidiaries, whether paid or accrued and whether or not in cash, 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 of the Company,


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




     “GAAP” means generally accepted accounting principles in the United States, which are in
effect on the date of this Indenture.



     “Global Note” has the meaning provided in the Appendix.



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



     The term “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 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). When used as a verb, “guarantee”
has a correlative meaning.



     “Guarantors” means each of (a) the Restricted Subsidiaries of the Company, other than Finance
Corp. and the Existing Immaterial Subsidiaries, executing this Indenture as initial Guarantors,
(b) any other Restricted Subsidiary of the Company that executes a supplement to this Indenture in
accordance with Section 4.13 or 10.02 hereof and (c) the respective successors and
assigns of such Restricted Subsidiaries in each case until such time as any such Restricted
Subsidiary shall be released and relieved of its obligations pursuant to Section 4.13,
8.02, 8.03 or 10.04 hereof.



     “Hedging Contracts” means, with respect to any specified Person:




     (1) interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements entered into with one of more financial institutions and designed to
protect the Person or any of its Restricted Subsidiaries entering into the agreement against
fluctuations in interest rates, or to otherwise reduce the cost of borrowing of such Person
or any of such Restricted Subsidiaries, with respect to Indebtedness incurred;




     (2) foreign exchange contracts and currency protection agreements entered into with one
of more financial institutions and designed to protect the Person or any of



15









 






its Restricted Subsidiaries entering into the agreement against fluctuations in
currency exchange rates;




     (3) any commodity futures contract, commodity swap, commodity option, commodity forward
sale or other similar agreement or arrangement designed to protect against fluctuations in
the price of Hydrocarbons used, produced, processed or sold by that Person or any of its
Restricted Subsidiaries at the time; and




     (4) other agreements or arrangements designed to protect such Person or any of its
Restricted Subsidiaries against fluctuations in interest rates, commodity prices or currency
exchange rates,


and in each case are entered into only in the normal course of business and not for speculative
purposes.




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



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



     “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent:




     (1) in respect of borrowed money;




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




     (3) in respect of bankers’ acceptances;




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




     (5) representing the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade payable; or




     (6) representing any obligations under Hedging Contracts,


if and to the extent any of the preceding items (other than letters of credit and obligations under
Hedging Contracts) would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness
of other Persons secured by a Lien on any asset of the specified Person, whether or not such
Indebtedness is assumed by the specified Person (provided that the amount of such Indebtedness will
be the lesser of (a) the fair market value of such asset at such date of determination and (b) the
amount of such Indebtedness of such other Person), and, to the extent not otherwise included, the
guarantee by the specified Person of any Indebtedness of any other Person (including, with respect
to any Production Payment, any warranties or guarantees of






16









 







production or payment by such Person with respect to such Production Payment, but excluding other
contractual obligations of such Person with respect to such Production Payment).




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




     (i) any indebtedness which has been defeased in accordance with GAAP or defeased
pursuant to the deposit of cash or Cash Equivalents (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;




     (ii) any obligation of a Person in respect of a farm-in agreement or similar
arrangement whereby such 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 interest 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;




     (iii) any obligations arising from agreements of a Person providing for
indemnification, guarantees, adjustment of purchase price, holdbacks, contingent payment
obligations based on a final financial statement or performance of acquired or disposed of
assets or similar obligations (other than guarantees of Indebtedness), in each case,
incurred or assumed by such Person in connection with the acquisition or disposition of
assets (including through mergers, consolidations or otherwise);




     (iv) subject to the parenthetical at the end of the preceding sentence, any
Dollar-Denominated Production Payments or Volumetric Production Payments; and




     (v) any Disqualified Stock.



     The amount (or principal amount) of any Indebtedness outstanding as of any date will be:




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




     (2) in the case of obligations under any Hedging Contracts, the termination value of
the agreement or arrangement giving rise to such obligations that would be payable by such
Person at such date; and




     (3) the principal amount of the Indebtedness, together with any interest on the
Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.



     The amount of Indebtedness of any Person at any date will be the outstanding balance at such
date of all unconditional obligations as described above and the maximum liability, upon



17









 




the occurrence of the contingency giving rise to the obligation, of any contingent obligations
at such date.




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



     “Initial Issuance Date” means April 6, 2010.



     “Initial Notes” has the meaning provided in the Appendix.



     “Initial Purchasers” has the meaning provided in the Appendix.



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



     “Joint Venture” means any Person that is not a direct or indirect Subsidiary of the Company in
which the Company or any of its Restricted Subsidiaries makes any Investment.



     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under Applicable Law, including any conditional sale or other title retention agreement,
any lease in the nature thereof, any option or other agreement to sell or give a security interest
in and 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.



18









 





     “LLC Agreement” means the Second Amended and Restated Limited Liability Company Agreement of
Linn Energy, LLC, dated as of January 19, 2006, as in effect on the date of this Indenture and as
such may be further amended, modified or supplemented from time to time.



     “Make Whole Premium” means, with respect to a Note at any time, the excess, if any, of (a) the
present value at such time of (i) the redemption price of such Note at April 15, 2015 pursuant to
Section 3.07(a) plus (ii) any required interest payments due on such Note through April 15,
2015 (except for currently accrued and unpaid interest), computed using a discount rate equal to
the Treasury Rate at such time plus 50 basis points, discounted to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), over (b) the
principal amount of such Note.



     “Measurement Date” means June 27, 2008.



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



     “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 preferred stock
dividends, excluding, however:




     (1) any gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of
any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Restricted Subsidiaries; and




     (2) any extraordinary gain (but not loss), together with any related provision for
taxes on such extraordinary gain (but not 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 limitation, any cash
received upon the sale or other disposition of any non-cash consideration received in any Asset
Sale), net of:




     (1) the direct costs relating to such Asset Sale, including, without limitation, legal,
accounting and investment banking fees, title and recording tax expenses and sales
commissions, and any relocation expenses incurred as a result of the Asset Sale,




     (2) taxes paid or payable or required to be accrued as a liability under GAAP as a
result of the Asset Sale, in each case, after taking into account any available tax credits
or deductions and any tax sharing arrangements,



19









 






     (3) amounts required to be applied to the repayment of Indebtedness secured by a Lien
on the properties or assets that were the subject of such Asset Sale,




     (4) all distributions and other payments required to be made to minority interest
holders in Restricted Subsidiaries or joint ventures as a result of such Asset Sale, and




     (5) any amounts to be set aside in any reserve established in accordance with GAAP or
any amount placed in escrow, in either case for adjustment in respect of the sale price of
such properties or assets or for liabilities associated with such Asset Sale and retained by
the Company or any of its Restricted Subsidiaries until such time as such reserve is
reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include
only the amount of the reserve so reversed or the amount returned to the Company or its
Restricted Subsidiaries from such escrow arrangement, as the case may be.



     “Net Working Capital” means (a) all current assets of the Company and its Restricted
Subsidiaries except current assets from commodity price risk management activities arising in the
ordinary course of business, less (b) all current liabilities of the Company and its Restricted
Subsidiaries, except current liabilities included in Indebtedness and any current liabilities from
commodity price risk management activities arising in the ordinary course of business, 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 FAS 133).



     “Non-Recourse Debt” means Indebtedness:




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




     (2) no default with respect to which (including any rights that the holders of the
Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment of the Indebtedness 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.



     For purposes of determining compliance with Section 4.09, in the event that any
Non-Recourse Debt of any of the Company’s Unrestricted Subsidiaries ceases to be Non-Recourse Debt
of such Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary of the Company.



     “Notes” has the meaning specified in the Appendix.



20









 





     “Notes Custodian” has the meaning specified in the Appendix.



     “Obligations” means any principal, premium, if any, interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization, whether or not a claim for
post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses,
indemnifications, reimbursement obligations, damages, guarantees, and other liabilities or amounts
payable under the documentation governing any Indebtedness or in respect thereto.



     “Offering Memorandum” means the offering memorandum of the Issuers dated March 30, 2010
relating to the offering of the Initial Notes.



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



     “Officers’ Certificate” means a certificate signed on behalf of each of the Company and
Finance Corp. by two of its Officers, one of whom must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer of the Company or
Finance Corp., as the case may be, that meets the requirements of Section 11.05 hereof.



     “Oil and Gas Business” means:




     (1) the acquisition, exploration, development, production, operation and disposition of
interests in oil, gas and other Hydrocarbon properties;




     (2) the gathering, marketing, treating, processing (but not refining), storage,
distribution, selling and transporting of any production from such interests or properties;




     (3) any business relating to exploration for or development, production, treatment,
processing (but not refining), storage, transportation or marketing of oil, gas and other
minerals and products produced in association therewith;




     (4) any other business that generates gross income that constitutes “qualifying income”
under Section 7704(d) of the Code; and




     (5) any activity that is ancillary, complementary or incidental to or necessary or
appropriate for the activities described in clauses (1) through (4) of this definition.



     “Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the
Trustee, that meets the requirements of Section 11.05 hereof. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.



     “Pari Passu Indebtedness” means, with respect to any Excess Proceeds from Asset Sales,
Indebtedness of an Issuer or any Guarantor that ranks equally in right of payment with the Notes or
the Subsidiary Guarantees, as the case may be, and the terms of which require the Company or any of
its Restricted Subsidiaries to apply such Excess Proceeds to offer to repurchase such Indebtedness.



21









 





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




     (1) immediately after giving effect to such transaction on a pro forma basis as if the
same had occurred at the beginning of the applicable four-quarter period, the Company or
such Restricted Subsidiary, 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 the
first paragraph of Section 4.09,




     (2) immediately after giving effect to such transaction on a pro forma basis as if the
same had occurred at the beginning of the applicable four-quarter period, the Fixed Charge
Coverage Ratio of the Company would be equal to or greater than the Fixed Charge Coverage
Ratio of the Company immediately prior to such transaction, or




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



     “Permitted Business Investments” means Investments made in the ordinary course of, and of a
nature that is or shall have become customary in, the Oil and Gas Business, including investments
or expenditures for actively exploring for, acquiring, developing, producing, processing,
gathering, marketing or transporting Hydrocarbons through agreements, transactions, interests or
arrangements that permit one to share risk or costs, comply with regulatory requirements regarding
local ownership or satisfy other objectives customarily achieved through the conduct of the Oil and
Gas Business jointly with third parties, including without limitation:




     (1) direct or indirect ownership of crude oil, natural gas, other restricted
Hydrocarbon properties or any interest therein, gathering, transportation, processing,
storage or related systems, or ancillary real property interests and interests therein; and




     (2) the entry into operating agreements, joint ventures, processing agreements, working
interests, royalty interests, mineral leases, farm-in agreements, farm-out agreements,
development agreements, production sharing agreements, area of mutual interest agreements,
contracts for the sale, transportation or exchange of crude oil and natural gas and related
Hydrocarbons and minerals, unitization agreements, pooling arrangements, joint bidding
agreements, service contracts, partnership agreements (whether general or limited), or other
similar or customary agreements, transactions, properties, interests or arrangements, and
Investments and expenditures in connection therewith or pursuant thereto, in each case made
or entered into in the ordinary course of the Oil and Gas Business, excluding, however,
Investments in corporations and publicly-traded limited partnerships.



22









 





     “Permitted Investments” means:




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




     (2) any Investment in cash and Cash Equivalents;




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




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




     (b) such Person is merged, consolidated or amalgamated 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 of the Company;




     (4) any Investment made as a result of the receipt of non-cash consideration from:




     (a) an Asset Sale that was made pursuant to and in compliance with
Section 4.10;




     (b) pursuant to clause (8) of the items deemed not to be Asset Sales under the
definition of “Asset Sale;”




     (5) any Investment in any Person solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;




     (6) any Investments received in compromise or resolution of, or upon satisfaction of
judgments with respect to, (a) obligations of trade creditors or customers that were
incurred in the ordinary course of business, 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 (including pursuant
to any bankruptcy or insolvency proceedings) with Persons who are not Affiliates;




     (7) Hedging Contracts;




     (8) Guarantees of Indebtedness permitted under Section 4.09;




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




     (10) Permitted Business Investments;




     (11) Investments that are in existence on the date of this Indenture;



23









 






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




     (13) guarantees of performance or other obligations (other than Indebtedness) arising
in the ordinary course in the Oil and Gas Business, including obligations under oil and
natural gas exploration, development, joint operating and related agreements and licenses or
concessions related to the Oil and Gas Business;




     (14) loans or advances to officers, directors or employees made in the ordinary course
of business consistent with past practices of the Company or the applicable Restricted
Subsidiary and otherwise in compliance with Section 4.11 of this Indenture;




     (15) Investments of a Restricted Subsidiary acquired after the date of this Indenture
or of any entity merged into or consolidated with the Company or a Restricted Subsidiary in
accordance with Section 5.01 of this Indenture, 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;




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




     (17) other Investments in any Person having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this clause (17)
that are at the time outstanding, not to exceed the greater of $50.0 million and 1.0% of the
Company’s Adjusted Consolidated Net Tangible Assets determined at the time of such
Investment;




provided, however, that with respect to any Investment, the Company may, in its sole
discretion, allocate all or any portion of any Investment and later re-allocate all or any
portion of any Investment to one or more of the above clauses (1) through (17) so that the
entire Investment would be a Permitted Investment.



     “Permitted Liens” means:




     (1) Liens securing any Indebtedness under any of the Credit Facilities;




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




     (3) Liens on property (including Capital Stock) of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any Restricted Subsidiary
of the Company, provided that such Liens were in existence prior to the contemplation of
such merger or consolidation and do not extend to any assets



24









 






other than those of the Person merged into or consolidated with the Company or the
Restricted Subsidiary;




     (4) Liens on property existing at the time of acquisition of the property by the
Company or any Restricted Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such acquisition;




     (5) any interest or title of a lessor to the property subject to a Capital Lease
Obligation;




     (6) Liens on any asset or property acquired, constructed or improved by the Company or
any of its Restricted Subsidiaries; provided that (a) such Liens are in favor of the seller
of such asset or property, in favor of the Person or Persons developing, constructing,
repairing or improving such asset or property, or in favor of the Person or Persons that
provided the funding for the acquisition, development, construction, repair or improvement
cost, as the case may be, of such asset or property, (b) such Liens are created within 360
days after the acquisition, development, construction, repair or improvement, (c) the
aggregate principal amount of the Indebtedness secured by such Liens is otherwise permitted
to be incurred under this Indenture and does not exceed the greater of (i) the cost of the
asset or property so acquired, constructed or improved plus related financing costs and (ii)
the fair market value (as determined by an executive officer involved in or otherwise
familiar with such acquisition, construction or improvement of such asset or property, or,
if such fair market value is $40.0 million or more, the Board of Directors of the Company)
of the asset or property so acquired, constructed or improved, measured at the date of such
acquisition, or the date of completion of such construction or improvement, and (d) such
Liens are limited to the asset or property so acquired, constructed or improved (including
the proceeds thereof, accessions thereto, upgrades thereof and improvements thereto);




     (7) Liens existing on the date of this Indenture other than Liens securing the Credit
Facilities;




     (8) Liens to secure the performance of tenders, bids, statutory obligations, surety or
appeal bonds, government contracts, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;




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




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




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




     (12) Liens arising under operating agreements, joint venture agreements, partnership
agreements, oil and gas leases, farm-out agreements, farm-in agreements, division orders,
contracts for the sale, transportation or exchange of crude oil and natural



25









 






gas and related Hydrocarbons and minerals, unitization and pooling declarations and
agreements, area of mutual interest agreements and other agreements arising in the ordinary
course of business of the Company and its Restricted Subsidiaries that are customary in the
Oil and Gas Business;




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




     (14) Liens upon specific items of inventory, receivables or other goods or proceeds of
the Company or any of its Restricted Subsidiaries securing such Person’s obligations in
respect of bankers’ acceptances or receivables securitizations issued or created for the
account of such Person to facilitate the purchase, shipment or storage of such inventory,
receivables or other goods or proceeds and permitted by Section 4.09;




     (15) Liens securing Obligations of the Issuers or the Guarantors under the Notes or the
Subsidiary Guarantees, as the case may be, and Liens securing other obligations of the
Issuers or the Guarantors under this Indenture;




     (16) Liens to secure payment and performance of Hedging Contracts of the Company or any
of its Restricted Subsidiaries;




     (17) Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been made therefor;




     (18) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
like 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;




     (19) pledges or deposits made in the ordinary course of business (A) in connection with
leases, tenders, bids, statutory obligations, surety or appeal bonds, government contracts,
performance bonds and similar obligations, or (B) in connection with workers’ compensation,
unemployment insurance and other social security or similar legislation;




     (20) any attachment or judgment Lien that does not constitute an Event of Default;




     (21) survey exceptions, 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 property that were
not incurred in connection with Indebtedness and that 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 the Company or any of its Restricted Subsidiaries;



26









 






     (22) 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 of its Restricted Subsidiaries to provide collateral to the depositary
institution;




     (23) 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;




     (24) leases or subleases granted to others that do not materially interfere with the
ordinary course of business of the Company and its Restricted Subsidiaries, taken as a
whole;




     (25) 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,
however, that such Liens are solely for the benefit of the trustees, agents or
representatives in their capacities as such and not for the benefit of the holders of such
Indebtedness;




     (26) Liens arising from the deposit of funds or securities in trust for the purpose of
decreasing or defeasing Indebtedness so long as such deposit of funds or securities and such
decreasing or defeasing of Indebtedness are permitted under Section 4.07 of this
Indenture;




     (27) Liens (other than Liens securing Indebtedness) on, or related to, assets to secure
all or part of the costs incurred in the ordinary course of the Oil and Gas Business for the
exploration, drilling, development, production, processing, transportation, marketing,
storage or operation thereof;




     (28) Liens arising from royalties, overriding royalties, revenue interests, net revenue
interests, net profit interests, reversionary interests, production payments, preferential
rights of purchase, working interests and other similar interests, all as ordinarily exist
with respect to properties and assets of the Company and its Restricted Subsidiaries or
otherwise as are customary in the Oil and Gas Business;




     (29) Liens incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company, provided that, after giving effect to any such incurrence, the
aggregate principal amount of all Indebtedness then outstanding and secured by any Liens
incurred pursuant to this clause (29) does not exceed the amount set forth in clause (17) of
the second paragraph of Section 4.09 of this Indenture; and




     (30) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred
under this Indenture and incurred to refinance Indebtedness that was previously



27









 






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.



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




     (1) the principal amount, or in the case of Disqualified Stock, the amount thereof as
determined in accordance with the definition of Disqualified Stock, of such Permitted
Refinancing Indebtedness does not exceed the principal amount of the Indebtedness or amount
of the Disqualified Stock being exchanged, extended, refinanced, renewed, replaced,
defeased, discharged, refunded or retired (plus all accrued and unpaid interest on the
Indebtedness or accrued and unpaid dividends on the Disqualified Stock, as the case may be,
and the amount of all fees, expenses and premiums incurred in connection therewith);




     (2) such Permitted Refinancing Indebtedness has a final maturity date or redemption
date, as applicable, later 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 or Disqualified Stock being exchanged,
extended, refinanced, renewed, replaced, defeased, discharged, refunded or retired;




     (3) if the Indebtedness or Disqualified Stock being exchanged, extended, refinanced,
renewed, replaced, defeased, discharged, refunded or retired is contractually subordinated
or otherwise junior in right of payment to the Notes or the Subsidiary Guarantees, such
Permitted Refinancing Indebtedness is contractually subordinated or otherwise junior in
right of payment to the Notes or the Subsidiary Guarantees on terms at least as favorable to
the Holders of Notes as those contained in the documentation governing the Indebtedness or
Disqualified Stock being exchanged, extended, refinanced, renewed, replaced, defeased,
discharged, refunded or retired; and




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



     Notwithstanding the foregoing, any Indebtedness incurred under Credit Facilities shall be
subject to the refinancing provision of the definition of Credit Facilities and not pursuant to the
requirements set forth in this definition of Permitted Refinancing Indebtedness.



28









 





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



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



     “Production Payments and Reserve Sales” means the grant or transfer by the Company or a
Restricted Subsidiary of the Company to any Person of a royalty, overriding royalty, net profits
interest, production payment (whether volumetric or dollar denominated), partnership or other
interest in oil and gas properties, reserves or the right to receive all or a portion of the
production or the proceeds from the sale of production attributable to such properties, 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 Agreement” has the meaning provided in the Appendix.



     “QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities
Act.



     “Registered Exchange Offer” has the meaning provided in the Appendix.



     “Registration Rights Agreement” has the meaning provided in the Appendix.



     “Regulation S” has the meaning provided in the Appendix.



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



     “Responsible Officer,” when used with respect to the Trustee, means any officer within the
corporate trust department of the Trustee having direct responsibility for the administration of
this Indenture.



     “Restricted Global Note” has the meaning provided in the Appendix.



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



     “Restricted Notes Legend” means the legend set forth in Section 2.3(b)(i) of the Appendix.



     “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary. Notwithstanding anything in this Indenture to the contrary, Finance Corp.
shall be a Restricted Subsidiary of the Company.



     “Rule 144A” has the meaning provided in the Appendix.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
or any successor to the rating agency business thereof.



29









 





     “SEC” means the Securities and Exchange Commission.



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



     “Senior Debt” means




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




     (2) 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 Restricted Subsidiaries
to the Company or any of its Affiliates; or




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



     For the avoidance of doubt, “Senior Debt” will not include any trade payables or taxes owed or
owing by the Company or any of its Restricted Subsidiaries.



     “Shelf Registration Statement” has the meaning provided in the Appendix.



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



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



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




     (1) any corporation, association or other business entity (other than a partnership or
limited liability company) of which more than 50% of the total voting power of 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



30









 






     (2) any partnership (whether general or limited) or limited liability company (a) the
sole general partner or member of which is such Person or a Subsidiary of such Person, or
(b) if there is more than a single general partner or member, either (x) the only managing
general partners or managing members of which are such Person or one or more Subsidiaries of
such Person (or any combination thereof) or (y) such Person owns or controls, directly or
indirectly, a majority of the outstanding general partner interests, member interests or
other Voting Stock of such partnership or limited liability company, respectively.



     “Subsidiary Guarantee” means the joint and several guarantee pursuant to Article 10
hereof by a Guarantor of the Obligations of the Issuers under this Indenture and the Notes.



     “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) and the rules and
regulations thereunder, as in effect on the date on which this Indenture is qualified under the TIA
(except as provided in Sections 9.01(i) and 9.03 hereof).



     “Transfer Restricted Securities” has the meaning provided in the Appendix.



     “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption
date of United States Treasury securities with a constant maturity (as compiled and published in
the most recent Federal Reserve Statistical Release H.15(519) which has become publicly available
at least two Business Days prior to the redemption date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most nearly equal to the
period from the redemption date to April 15, 2015; provided, however, that if such period is not
equal to the constant maturity of a United States Treasury security for which a weekly average
yield is given, the Company shall obtain the Treasury Rate by linear interpolation (calculated to
the nearest one-twelfth of a year) from the weekly average yields of United States Treasury
securities for which such yields are given, except that if the period from the redemption date to
April 15, 2015 is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used. The Company will
(a) calculate the Treasury Rate on the second Business Day preceding the applicable redemption date
and (b) prior to such redemption date file with the Trustee an Officers’ Certificate setting forth
the Make Whole Premium and the Treasury Rate and showing the calculation of each in reasonable
detail.



     “Trustee” means the party named as such in the introductory paragraph hereto until a successor
replaces it in accordance with the applicable provisions of this Indenture, and thereafter means
the successor serving hereunder.



     “Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to
time.



     “Unrestricted Subsidiary” means any Subsidiary of the Company (other than Finance Corp.) that
is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:




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



31









 






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




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




     (4) has not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries.



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



     “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 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) to vote in the election of
the Board of Directors of such Person.



     “Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified
Stock 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 or redemption, in respect of the Indebtedness
or Disqualified Stock, 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 aggregate principal amount of such Indebtedness or
Disqualified Stock.


Section 1.02 Other Definitions.



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	Term	 	Defined in Section	 
	“Affiliate Transaction”
	 	 	4.11	 
	“Appendix”
	 	 	2.01	 
	“Asset Sale Offer”
	 	 	3.09	 
	“Change of Control Offer”
	 	 	4.15	 
	“Change of Control Payment”
	 	 	4.15	 
	“Change of Control Purchase Date”
	 	 	4.15	 
	“Change of Control Settlement Date”
	 	 	4.15	 
	“Covenant Defeasance”
	 	 	8.03	 
	“Discharge”
	 	 	8.08	 
	“Event of Default”
	 	 	6.01	 
	“Excess Proceeds”
	 	 	4.10	 
	“Incremental Funds”
	 	 	4.07	 
	“incur”
	 	 	4.09	 
	“Legal Defeasance”
	 	 	8.02	 
	“Offer Amount”
	 	 	3.09	 
	“Offer Period”
	 	 	3.09	 
	“Paying Agent”
	 	 	2.03	 
	“Payment Default”
	 	 	6.01	 
	“Permitted Debt”
	 	 	4.09	 
	“Register”
	 	 	2.03	 
	“Registrar”
	 	 	2.03	 
	“Restricted Payments”
	 	 	4.07	 
	“Settlement Date”
	 	 	3.09	 
	“Termination Date”
	 	 	3.09	 





Section 1.03 Incorporation by Reference of Trust Indenture Act.




     Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. Any terms incorporated in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.


Section 1.04 Section 1.04 Rules of Construction.




     Unless the context otherwise requires:




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




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




     (3) “or” is not exclusive;




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




     (5) provisions apply to successive events and transactions;



33









 






     (6) references to sections of or rules under the Securities Act or the Exchange Act
shall be deemed to include substitute, replacement or successor sections or rules adopted by
the SEC from time to time;




     (7) “herein,” “hereof” and other words of similar import refer to this Indenture as a
whole (as amended or supplemented from time to time) and not to any particular Article,
Section or other subdivision of this Indenture; and




     (8) “including” means “including, without limitation.”



ARTICLE 2

THE NOTES



Section 2.01 Form and Dating.




     Provisions relating to the Initial Notes and the Exchange Notes are set forth in the
Rule 144A/Regulation S Appendix attached hereto (the “Appendix”) which is hereby incorporated in
and expressly made part of this Indenture. The Initial Notes and the Trustee’s certificate of
authentication therefor shall be substantially in the form of Exhibit 1 to the Appendix which is
hereby incorporated in and expressly made a part of this Indenture. The Exchange Notes and the
Trustee’s certificate of authentication therefor shall be substantially in the form of Exhibit 2 to
the Appendix, which is hereby incorporated in and expressly made a part of this Indenture. The
Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements
to which an Issuer is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Note shall be dated the date of its
authentication. The terms of the Notes set forth in the Appendix are part of the terms of this
Indenture.


Section 2.02 Execution and Authentication.




     An Officer of each Issuer shall sign the Notes on behalf of such Issuer by manual or facsimile
signature.



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



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



     On the Initial Issuance Date, the Trustee shall authenticate and deliver $1,300,000,000 of
8.625% Senior Notes due 2020 and, at any time and from time to time thereafter, the Trustee shall
authenticate and deliver Notes for original issue in an aggregate principal amount specified in a
written order of the Issuers. Such order shall specify the amount of the Notes to be
authenticated, the date on which the original issue of Notes is to be authenticated and to whom the
Notes shall be registered and delivered and, in the case of an issuance of Additional Notes
pursuant to Section 2.13 after the Initial Issuance Date, shall certify that such issuance
is in compliance with Section 4.09.



34









 





     The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to
authenticate the Notes. Unless limited by the terms of such appointment, an authenticating agent
may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices and demands.


Section 2.03 Registrar and Paying Agent.




     The Issuers shall at all times maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (the “Registrar”) and an office or agency in New York, New
York where Notes may be presented for payment (the “Paying Agent”). The Registrar shall keep a
register of the Notes and of their transfer and exchange (the “Register”). The Issuers may have
one or more co-registrars and one or more additional paying agents. The term “Registrar” includes
any co-registrar, and the term “Paying Agent” includes any additional paying agent.



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



     The Issuers initially appoint the Trustee as Registrar and Paying Agent in connection with the
Notes at the Corporate Trust Office of the Trustee.


Section 2.04 Paying Agent to Hold Money in Trust.




     Prior to 11:00 a.m. New York City time, on each due date of the principal and interest on any
Note, an Issuer shall deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Issuers shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of
Noteholders or the Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Notes and shall notify the Trustee of any default by the Issuers in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by
it as Paying Agent and hold it as a separate trust fund. The Issuers at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.


Section 2.05 Noteholder Lists.




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



35









 




such form and as of such date as the Trustee may reasonably require of the names and addresses
of Noteholders.



Section 2.06 Transfer and Exchange.




     The Notes shall be issued in registered form and shall be transferable only upon the surrender
of a Note for registration of transfer. When a Note is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of this Indenture and Section 8-401(a) of the Uniform Commercial Code
are met. When Notes are presented to the Registrar with a request to exchange them for an equal
principal amount of Notes of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. The Issuers may require payment of a sum sufficient to
cover any taxes, assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer pursuant to Section 3.06,
4.10, 4.15 or 9.05).


Section 2.07 Replacement Notes.




     If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the
Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code
are met and the Holder satisfies any other reasonable requirements of the Trustee. If required by
the Trustee or the Issuers, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Issuers and the Trustee to protect the Issuers, the Trustee, the Paying Agent and the
Registrar from any loss which any of them may suffer if a Note is replaced. The Issuers and the
Trustee may charge the Holder for their expenses in replacing a Note. In the event any such Note
shall have matured, instead of issuing a new Note, the Trustee may pay the same without surrender
thereof upon the Holder furnishing the Issuers and the Trustee with indemnity satisfactory to them
and complying with such other reasonable regulations as the Trustee may prescribe and paying such
reasonable expenses as the Issuer and the Trustee may incur in connection therewith.



     Every replacement Note is an additional obligation of the Issuers.


Section 2.08 Outstanding Notes.




     Notes outstanding at any time are all Notes authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in this Section as not
outstanding. Except as otherwise provided in TIA § 316(a), a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.



     If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the
Trustee, any provider of an indemnity bond and the Issuers receive proof satisfactory to them that
the replaced Note is held by a bona fide purchaser.



     If the Paying Agent segregates and holds in trust, in accordance with this Indenture, by
11:00 a.m. New York time, on a redemption date or other maturity date money sufficient to pay



36









 




all principal, interest, premium, and Additional Interest, if any, payable on that date with
respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on
and after that date such Notes (or portions thereof) shall cease to be outstanding and interest and
Additional Interest, if any, on them shall cease to accrue.



Section 2.09 Temporary Notes.




     Until definitive Notes are ready for delivery, the Issuers may prepare and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Issuers consider appropriate for temporary Notes. Without
unreasonable delay, the Issuers shall prepare and the Trustee shall authenticate definitive Notes
and deliver them in exchange for temporary Notes.


Section 2.10 Cancellation.




     An Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and
the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange, replacement or payment. The Trustee and no one else shall cancel and destroy
(subject to the record retention requirements of the Exchange Act) all Notes surrendered for
registration of transfer, exchange, replacement, payment or cancellation. Upon written request,
the Trustee will deliver a certificate of such cancellation to the Issuers unless the Issuers
direct the Trustee to deliver canceled Notes to the Issuers instead. The Issuers may not issue new
Notes to replace Notes they have redeemed, paid or delivered to the Trustee for cancellation.


Section 2.11 Defaulted Interest.




     If the Issuers default in a payment of interest on the Notes, the Issuers shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The
Issuers may pay the defaulted interest to the Persons who are Noteholders on a subsequent special
record date. The Issuers shall fix or cause to be fixed any such special record date and payment
date to the reasonable satisfaction of the Trustee and shall promptly mail to each Noteholder a
notice that states the special record date, the payment date and the amount of defaulted interest
to be paid.


Section 2.12 CUSIP Numbers.




     The Issuers in issuing the Notes may use “CUSIP” numbers and corresponding “ISINs” (if then
generally in use) and, if so, the Trustee shall use “CUSIP” numbers and corresponding “ISINs” in
notices of redemption as a convenience to Holders; provided, however, that any such notice may
state that no representation is made as to the correctness of such numbers either as printed on the
Notes or as contained in any notice of a redemption and that reliance may be placed only on the
other identification numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers.


Section 2.13 Issuance of Additional Notes.




     The Issuers shall be entitled, subject to their compliance with Section 4.09, to issue
Additional Notes under this Indenture which shall have identical terms as the Initial Notes issued



37









 




on the Initial Issuance Date, other than with respect to the date of issuance and issue price.
The Initial Notes issued on the Initial Issuance Date, and any Additional Notes and all Exchange
Notes issued in exchange therefor shall be treated as a single class for all purposes under this
Indenture, including, without limitation, waivers, consents, directions, declarations, amendments,
redemptions and offers to purchase.




     With respect to any Additional Notes, the Issuers shall set forth in an Officers’ Certificate,
which shall be delivered to the Trustee, the following information:




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




     (2) the issue price, the issue date (and the corresponding date from which interest
shall accrue thereon and the first interest payment date therefor) and the CUSIP number and
any corresponding ISIN of such Additional Notes; provided, however, that any issuance of
Additional Notes (i) is treated as part of the same issue as the Initial Notes within the
meaning of Treasury Regulation § 1.1275-1(f), (ii) is a qualified reopening of the Initial
Notes within the meaning of Treasury Regulation § 1.1275-2(k), or (iii) is otherwise
fungible with the Initial Notes for U.S. federal income tax purposes, in the case of each of
clauses (i), (ii) and (iii), so that such Additional Notes will trade as part of a single
class with the Initial Notes; and




     (3) whether such Additional Notes shall be Transfer Restricted Securities and issued in
the form of Initial Notes as set forth in Exhibit 1 to the Appendix or shall be issued in
the form of Exchange Notes as set forth in Exhibit 2 to the Appendix.


Section 2.14 Persons Deemed Owners.




     Prior to due presentment of a Note for registration of transfer, the Company, the Trustee, any
Agent or any other agent of the Company or the Trustee may treat the Person in whose name such Note
is registered as the absolute owner of such Note for the purpose of receiving payment of principal
of (and premium, if any) and interest on, such Note and for all other purposes whatsoever, whether
or not such Note be overdue, and neither the Company, the Trustee, any Agent nor any other agent of
the Company or the Trustee shall be affected by notice to the contrary.



ARTICLE 3

REDEMPTION AND PREPAYMENT



Section 3.01 Notices to Trustee.




     If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of
Section 3.07 hereof, they shall furnish to the Trustee, at least five Business Days (unless
a shorter period shall be agreeable to the Trustee) before the date of giving notice of the
redemption pursuant to Section 3.03, an Officers’ Certificate setting forth (i) the clause
of Section 3.07 pursuant to which the redemption shall occur, (ii) the redemption date,
(iii) the principal amount of Notes to be redeemed, (iv) the redemption price, and (v) whether the
Issuers request that the Trustee give notice of such redemption. Any such notice may be cancelled
at



38









 




any time prior to the mailing of notice of such redemption to any Holder and shall thereupon
be void and of no effect.



Section 3.02 Selection of Notes to Be Redeemed.




     If less than all of the Notes are to be redeemed at any time, the Trustee shall select the
Notes to be redeemed among the Holders of the Notes as follows: (1) if the Notes are listed on any
national securities exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or (2) if the Notes are not listed on any
national securities exchange, on a pro rata basis. In the event of partial redemption other than
on a pro rata basis, the particular Notes to be redeemed shall be selected, not less than five (5)
Business Days (unless a shorter period shall be agreeable to the Trustee) prior to the giving of
notice of the redemption pursuant to Section 3.03, by the Trustee from the outstanding
Notes not previously called for redemption.



     The Trustee shall promptly notify the Issuers in writing of the Notes selected for redemption
and, in the case of any Note selected for partial redemption, the principal amount thereof to be
redeemed. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of
$1,000 in excess of $2,000; 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 not a multiple of $1,000, shall be
redeemed. Provisions of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption.



     The provisions of the two preceding paragraphs of this Section 3.02 shall not apply
with respect to any redemption affecting only a Global Note, whether such Global Note is to be
redeemed in whole or in part. In case of any such redemption in part, the unredeemed portion of
the principal amount of the Global Note shall be in an authorized denomination.


Section 3.03 Notice of Redemption.




     Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than
60 days before a redemption date (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 Legal Defeasance, Covenant
Defeasance or Discharge), the Issuers 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.



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




     (a) the redemption date;




     (b) the redemption price or, if the redemption price is not then determinable, the
manner in which it is to be determined;




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



39









 






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




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




     (f) that, unless the Issuers default in making such redemption payment, interest and
Additional Interest, if any, on Notes called for redemption shall cease to accrue on and
after the redemption date and the only remaining right of the Holders of such Notes is to
receive payment of the redemption price upon surrender to the Paying Agent of the Notes
redeemed;




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




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



     If any of the Notes to be redeemed is in the form of a Global Note, then the Issuers shall
modify such notice to the extent necessary to accord with the procedures of the Depository
applicable to redemption.



     At the Issuers’ request, the Trustee shall give the notice of optional redemption in the
Issuers’ names and at their expense; provided, however, that the Issuers shall have delivered to
the Trustee, as provided in Section 3.01, an Officers’ Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such notice as provided
in the second preceding paragraph.


Section 3.04 Effect of Notice of Redemption.




     Once notice of redemption is mailed in accordance with Section 3.03 hereof, subject to
the following sentence, Notes called for redemption become irrevocably due and payable on the
applicable redemption date at the applicable redemption price. Notice of any redemption,
including, without limitation, upon an Equity Offering, 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. If mailed in the manner provided for in Section 3.03, the notice
of redemption shall be conclusively presumed to have been given whether or not a Holder receives
such notice. Failure to give timely notice or any defect in the notice shall not affect the
validity of the redemption.


Section 3.05 Deposit of Redemption Price.




     Prior to 11:00 a.m., New York City time, on the redemption date, the Issuers shall deposit
with the Paying Agent (or, if the Company or a Subsidiary thereof is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.04 hereof) money sufficient in
same day funds to pay the redemption price of and accrued interest and Additional Interest, if any,
on all Notes to be redeemed on that date. The Paying Agent shall promptly return to the Issuers
any money deposited with the Paying Agent by an Issuer in excess of the amounts necessary to pay




40











 




the redemption price of and accrued interest and Additional Interest, if any, on all Notes to
be redeemed.




     If the Issuers comply with the provisions of the preceding paragraph, on and after the
redemption date, interest and Additional Interest, if any, shall cease to accrue on the Notes or
the portions of Notes called for redemption whether or not such Notes are presented for payment,
and the only remaining right of the Holders of such Notes shall be to receive payment of the
redemption price upon surrender to the Paying Agent of the Notes redeemed. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the failure of an Issuer
to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, and to the extent lawful, on any interest and
Additional Interest, if any, not paid on such unpaid principal, in each case at the rate provided
in the Notes and in Section 4.01 hereof.


Section 3.06 Notes Redeemed in Part.




     Upon surrender of a Note that is redeemed in part, the Issuers shall issue in the name of the
applicable Holder and the Trustee shall authenticate for such Holder at the expense of the Issuers
a new Note equal in principal amount to the unredeemed portion of the Note surrendered.


Section 3.07 Optional Redemption.





     (a) Except as set forth in clauses (b) and (c) of this Section 3.07, the
Issuers shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to April 15, 2015. On or after April 15, 2015, the Issuers shall have the option to
redeem the Notes, in whole or in part at any time, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid interest and
Additional Interest, if any, on the Notes redeemed to the applicable redemption date
(subject to the right of Holders of record on the relevant record date to receive interest
due on an interest payment date that is on or prior to the redemption date), if redeemed
during the twelve-month period beginning on April 15 of the years indicated below:



	 	 	 	 	 
	YEAR	 	PERCENTAGE
	2015
	 	 	104.313	%
	2016
	 	 	102.875	%
	2017
	 	 	101.438	%
	2018 and thereafter
	 	 	100.000	%







     (b) Notwithstanding the provisions of clause (a) of this Section 3.07, at any
time prior to April 15, 2013, the Issuers may on one or more occasions redeem up to 35% of
the aggregate principal amount of Notes (including any Additional Notes) issued under this
Indenture at a redemption price of 108.625% of the principal amount thereof, plus accrued
and unpaid interest, if any, and Additional Interest, if any, thereon to the redemption date
(subject to the right of Holders of record on the relevant record date to receive interest
due on an interest payment date that is on or prior to the redemption date), with the net
cash proceeds of one or more Equity Offerings, provided that, with respect to each such
redemption:



41









 






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




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




     (c) Prior to April 15, 2015, the Issuers may redeem on one or more occasions all or
part of the Notes at a redemption price equal to the sum of:




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




     (2) accrued and unpaid interest, if any, to the redemption date (subject to the right
of Holders of record on the relevant record date to receive interest due on an interest
payment date that is on or prior to the redemption date), plus




     (3) the Make Whole Premium at the redemption date.




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


Section 3.08 Mandatory Redemption.




     Except as set forth under Sections 4.10 and 4.15 hereof, neither of the
Issuers shall be required to make mandatory redemption or sinking fund payments with respect to the
Notes or to repurchase the Notes at the option of the Holders.


Section 3.09 Offer to Purchase by Application of Excess Proceeds.




     In the event that, pursuant to Section 4.10 hereof, the Company shall be required to
commence an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it shall follow the
procedures specified below.



     The Asset Sale Offer shall remain open for a period of 20 Business Days following its
commencement and no longer, except to the extent that a longer period is required by Applicable Law
(the “Offer Period”). No later than five Business Days after the termination of the Offer Period
(the “Settlement Date”), the Company shall purchase and pay for the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the “Offer Amount”) or, if less
than the Offer Amount has been tendered, all Notes validly tendered in response to the Asset Sale
Offer. Payment for any Notes so purchased shall be made in the manner prescribed in the Notes.



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



42









 






     (a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and
Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open,
including the time and date the Asset Sale Offer will terminate (the “Termination Date”);




     (b) the Offer Amount and the purchase price;




     (c) that any Note not tendered or accepted for payment shall continue to accrue
interest and Additional Interest, if any;




     (d) that, unless the Company defaults in making such payment, any Note accepted for
payment pursuant to the Asset Sale Offer shall cease to accrue interest and Additional
Interest, if any, after the Settlement Date;




     (e) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer
shall be required to surrender the Note, properly endorsed for transfer, together with the
form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed and
such customary documents as the Company may reasonably request, to the Company or a Paying
Agent at the address specified in the notice, before the Termination Date;




     (f) that Holders shall be entitled to withdraw their election if the Company or the
Paying Agent, as the case may be, receives, prior to the Termination Date, 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;




     (g) that, if the aggregate principal amount of Notes surrendered by Holders, and Pari
Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount the
Company is required to repurchase, the Trustee shall select the Notes and Pari Passu
Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal
amount of tendered Notes and Pari Passu Indebtedness (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $2,000, or integral
multiples of $1,000 in excess of $2,000, shall be purchased); and




     (h) that Holders whose Notes were purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of
$1,000 in excess of $2,000.



     If any of the Notes subject to an Asset Sale Offer is in the form of a Global Note, then the
Company shall modify such notice to the extent necessary to accord with the procedures of the
Depository applicable to repurchases.



     Promptly after the Termination Date, the Company shall, to the extent lawful, accept for
payment Notes or portions thereof tendered pursuant to the Asset Sale Offer in the aggregate
principal amount required by Section 4.10 hereof, and prior to the Settlement Date it shall
deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section 3.09 and
Section 4.10.



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Prior to 11:00 a.m., New York City time, on the Settlement Date, the Company or the Paying
Agent, as the case may be, shall 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 shall issue a new Note, and the Trustee shall authenticate and mail or deliver such new
Note to such Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on or
before the Settlement Date.




ARTICLE 4

COVENANTS



Section 4.01 Payment of Notes.




     The Issuers shall pay or cause to be paid the principal of, interest, premium, and Additional
Interest, if any, on, the Notes on the dates and in the manner provided in the Notes. Principal,
interest, premium, and Additional Interest, if any, shall be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 11:00 a.m., New York
City time, on the due date money deposited by an Issuer or a Guarantor in immediately available
funds and designated for and sufficient to pay all principal, interest, premium, and Additional
Interest, if any, then due.



     The Issuers shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate specified therefor in the Notes to the extent
lawful; and they shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Additional Interest, if any, (without
regard to any applicable grace period), at the same rate to the extent lawful.


Section 4.02 Maintenance of Office or Agency.




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



     The Issuers may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations. Further, if at any time there shall be no such office or agency in the
City of New York where the Notes may be presented or surrendered for payment, the Issuers shall
forthwith designate and maintain such an office or agency in the City of New York, in order that
the Notes shall at all times be payable in the City of New York. The Issuers



44









 




shall give prompt written notice to the Trustee of any such designation or rescission and of
any change in the location of any such other office or agency.




     The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or
agency of the Company in accordance with Section 2.03.



     With respect to any Global Notes, the Corporate Trust Office of the Trustee shall be the
office or agency where such Global Notes may be presented or surrendered for payment or for
registration of transfer or exchange, or where successor Notes may be delivered in exchange
therefor; provided, however, that any such presentation, surrender or delivery effected pursuant to
the Applicable Procedures of the Depository shall be deemed to have been effected at such office or
agency in accordance with the provisions of this Indenture.


Section 4.03 Reports.




     (a) Notwithstanding that the Company may not be subject to the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act, 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
furnish to the Trustee and, upon its prior request, to any of the Holders of the Notes, within the
time periods specified in the SEC’s rules and regulations):




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




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


The Company shall at all times comply with TIA § 314(a).





     (b) For as long as the Notes remain outstanding, if at any time the Company is not
required to file the reports required by this Section 4.03 with the SEC, the Company
and the Guarantors shall furnish to the Holders of the Notes, and to securities analysts and
prospective investors in the Notes, upon their request, the information, if any, required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act. The Company will be
deemed to have provided such information to the Holders of the Notes, securities analysts
and prospective investors in the Notes if it has filed reports containing such information
with the SEC via the EDGAR filing system and such reports are publicly available.




     (c) If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries,
then, to the extent material, the quarterly and annual financial information required by
paragraph (a) of this Section 4.03 shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes to the



45









 







financial statements and in Management’s Discussion and Analysis of Financial Condition
and Results of Operations, of the financial condition and results of operations of the
Company and its Restricted Subsidiaries separate from the financial condition and results of
operations of the Unrestricted Subsidiaries of the Company.




     (d) Delivery of reports, information and documents to the Trustee under this Section is
for informational purposes only and the Trustee’s receipt of the foregoing shall not
constitute constructive notice of any information contained therein or determinable from
information contained therein.


Section 4.04 Compliance Certificate.





     (a) The Issuers shall deliver to the Trustee, within 90 days after the end of each
fiscal year ending on or after December 31, 2010, an Officers’ Certificate stating that a
review of the activities of the Issuers and their Restricted Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Issuers have kept, observed, performed and fulfilled their
obligations under this Indenture, and further stating, as to each such Officer signing such
certificate, that, to the best of his or her knowledge, the Issuers have kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and are not in
default in the performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred, describing all
such Defaults or Events of Default of which he or she may have knowledge and what action the
Issuers are taking or propose to take with respect thereto).




     (b) The Issuers shall, so long as any of the Notes are outstanding, deliver to the
Trustee, forthwith upon any of their respective Officers becoming aware of any Default or
Event of Default, an Officers’ Certificate specifying such Default or Event of Default and
what action the Issuers are taking or propose to take with respect thereto.


Section 4.05 Taxes.




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


Section 4.06 Stay, Extension and Usury Laws.




     Each of the Issuers and each of the Guarantors covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this Indenture; and each
Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.



46









 




Section 4.07 Limitation on Restricted Payments.




     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 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 or
payable to the Company or a Restricted Subsidiary of the Company);




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




     (3) make any principal payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated in right of
payment to the Notes or any Subsidiary Guarantee (excluding (a) any intercompany
Indebtedness between or among the Company and any of its Restricted Subsidiaries, (b) the
purchase, repurchase or other acquisition of Indebtedness that is subordinated in right of
payment to the Notes or the Subsidiary Guarantees purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each case due within
one year of the date of purchase, repurchase or acquisition, and (c) any payment of
principal at the Stated Maturity thereof); or




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


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





     (I) if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full
fiscal quarters for which internal financial statements are available at the time of such
Restricted Payment is not less than 2.25 to 1.0, such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and its Restricted
Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (8),
(9), (11) and (12) of the next succeeding paragraph) with respect to the quarter for which
such Restricted Payment is made, is less than the sum, without duplication, of:




     (a) Available Cash with respect to the Company’s preceding fiscal quarter, plus



47









 






     (b) 100% of the aggregate net cash proceeds and the fair market value of any
Capital Stock of Persons engaged primarily in the Oil and Gas Business or any other
assets that are used or useful in the Oil and Gas Business, in each case received by
the Company after the Measurement 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 Restricted
Subsidiary of the Company), plus




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




     (i) repurchases or redemptions of such Restricted Investments by such
Person, proceeds realized upon the sale of such Restricted Investment to a
purchaser other than the Company or a Subsidiary of the Company, repayments
of loans or advances or other transfers of assets (including by way of
dividend or distribution) by such Person to the Company or any Restricted
Subsidiary of the Company; or




     (ii) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
“Investment”) not to exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made by the Company or any Restricted
Subsidiary of the Company in such Unrestricted Subsidiary,




in each case to the extent such amounts have not been included in Available Cash for
any period commencing on or after the Measurement Date (items (b) and (c) being
referred to as “Incremental Funds”), minus




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




     (II) if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full
fiscal quarters for which internal financial statements are available at the time of such
Restricted Payment is less than 2.25 to 1.0, such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and its Restricted
Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (8),
(9), (11) and (12) of the next succeeding paragraph) with respect to the quarter for which
such Restricted Payment is made (such Restricted Payments for purposes of this clause (II)
meaning only distributions on units of the Company), is less than the sum, without
duplication, of:



48









 






     (a) $290.0 million less the aggregate amount of all prior Restricted Payments
made by the Company and its Restricted Subsidiaries pursuant to this clause (II)(a)
since the date of this Indenture, plus




     (b) Incremental Funds to the extent not previously expended pursuant to this
clause (II) or clause (I) above.



     The preceding provisions will not prohibit:




     (1) the payment of any dividend or distribution within 60 days after the date of its
declaration, if at the date of declaration the payment would have complied with the
provisions of this Indenture;




     (2) the redemption, repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the
Company in exchange for, or out of the net cash proceeds of the substantially concurrent
(a) contribution (other than from a Restricted Subsidiary of the Company) to the equity
capital of the Company or (b) sale (other than to a Restricted Subsidiary of the Company)
of, Equity Interests of the Company (other than Disqualified Stock), with a sale being
deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or
acquisition occurs not more than 120 days after such sale; provided, however, that the
amount of any such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition will be excluded or deducted from the
calculation of Available Cash and Incremental Funds;




     (3) the defeasance, redemption, repurchase, retirement or other acquisition of
subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from a
substantially concurrent incurrence of, or in exchange for, Permitted Refinancing
Indebtedness, with an incurrence of Permitted Refinancing Indebtedness being deemed
substantially concurrent if such defeasance, redemption, repurchase, retirement or
acquisition occurs not more than 120 days after such incurrence;




     (4) the payment of any dividend or distribution by a Restricted Subsidiary of the
Company to the holders of such Restricted Subsidiary’s Equity Interests on a pro rata basis;




     (5) so long as no Default (other than a Reporting Default) or Event of Default shall
have occurred and be continuing or would be caused thereby, the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company pursuant to any director or employee equity
subscription agreement or equity option agreement or other employee benefit plan or to
satisfy obligations under any Equity Interests appreciation rights or option plan or similar
arrangement; provided, however, that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests may not exceed $3.0 million in any calendar
year (with any portion of such $3.0 million amount that is unused in any calendar year to be
carried forward to successive calendar years and added to such amount) plus, to the extent
not previously applied or included,



49









 






     (a) the cash proceeds received by the Company or any of its Restricted
Subsidiaries from sales of Equity Interests of the Company to employees or directors
of the Company or its Affiliates that occur after the date of this Indenture (to the
extent the cash proceeds from the sale of such Equity Interests have not otherwise
been applied to the payment of Restricted Payments by virtue of clauses (I)(b) or
(II)(b) of the first paragraph of this Section 4.07) and




     (b) the cash proceeds of key man life insurance policies received by the
Company or any of its Restricted Subsidiaries after the date of this Indenture.




     (6) repurchases of Indebtedness that is subordinated in right of payment to the Notes
or a Subsidiary Guarantee at a purchase price not greater than (i) 101% of the principal
amount of such subordinated Indebtedness in the event of a Change of Control or (ii) 100% of
the principal amount of such subordinated Indebtedness in the event of an Asset Sale, in
each case plus accrued and unpaid interest thereon, in connection with any change of control
offer or asset sale offer required by the terms of such Indebtedness, but only if:




     (a) in the case of a Change of Control, the Company has first complied with and
fully satisfied its obligations under Section 4.15; or




     (b) in the case of an Asset Sale, the Company has complied with and fully
satisfied its obligations in accordance with Section 4.10;




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




     (8) repurchases of Equity Interests deemed to occur upon the exercise or conversion of
stock options, warrants or other convertible securities if such Equity Interests represent a
portion of the exercise or conversion price thereof;




     (9) the defeasance, repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by
any current or former officers, directors or employees of the Company or any of its
Restricted Subsidiaries 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 any tax withholding obligation with respect to such exercise or
vesting;




     (10) any payments in connection with a consolidation, merger or transfer of assets in
connection with a transaction that is not prohibited by this Indenture not to exceed $10.0
million since the date of this Indenture;



50









 






     (11) Equity Repurchases on or after the date of this Indenture that, when combined with
any Equity Repurchases on or after the Measurement Date and prior to the date of this
Indenture, are in an aggregate amount not in excess of $100.0 million; or




     (12) so long as no Default (other than a Reporting Default) or Event of Default shall
have occurred and be continuing or would be caused thereby, other Restricted Payments in an
aggregate amount not to exceed $10.0 million since the date of this Indenture.



     The amount of all Restricted Payments (other than cash) will be the fair market value on the
date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued
by the Company or any of its Restricted Subsidiaries, as the case may be, pursuant to the
Restricted Payment. The fair market value of any assets or securities that are required to be
valued by this covenant will be determined, in the case of amounts under $25.0 million, by an
officer of the Company and, in the case of amounts over $25.0 million, by the Board of Directors of
the Company, whose determination shall be evidenced by a Board Resolution. For purposes of
determining compliance with this Section 4.07, (x) in the event that a Restricted Payment
meets the criteria of more than one of the categories of Restricted Payments described in the
preceding clauses (1) — (12), the Company will be permitted to divide or classify (or later divide,
classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any
manner that complies with this Section 4.07; and (y) in the event a Restricted Payment is
made pursuant to clause (I) or (II) of the second preceding paragraph, the Company will be
permitted to classify whether all or any portion thereof is being (and in the absence of such
classification shall be deemed to have classified the minimum amount possible as having been) made
with Incremental Funds.


Section 4.08 Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.




     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 of the Company to:




     (1) pay dividends or make any other distributions on its Capital Stock to the Company
or any of its Restricted Subsidiaries, or pay any Indebtedness or other obligations owed to
the Company or any of its Restricted Subsidiaries;




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




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



     However, the preceding restrictions of this Section 4.08 will not apply to
encumbrances or restrictions existing under or by reason of:




     (1) agreements (including in respect of any Credit Facilities) as in effect on the date
of this Indenture and any amendments, modifications, restatements, renewals,



51









 







increases, supplements, refundings, replacements or refinancings of those agreements
(or the agreements referred to in this clause (1)) or the Indebtedness to which those
agreements (or the agreements referred to in this clause (1)) relate, provided that the
amendments, modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a whole, with respect to such
dividend, distribution and other payment restrictions than those contained in those
agreements on the date of this Indenture, as determined by the Board of Directors of the
Company in its reasonable and good faith judgment;




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




     (3) Applicable Law or similar restriction;




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




     (5) instruments governing other Indebtedness of the Company or any of its Restricted
Subsidiaries permitted to be incurred pursuant to an agreement entered into subsequent to
the date of this Indenture in accordance with Section 4.09; provided that the
provisions relating to such encumbrance or restriction contained in such instruments are not
materially more restrictive, taken as a whole, than the provisions contained in the Credit
Agreement and in this Indenture as in effect on the date of this Indenture, as determined by
the Board of Directors of the Company in its reasonable and good faith judgment;




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




     (7) Capital Lease Obligations, mortgage financings or purchase money obligations, in
each case for property acquired in the ordinary course of business that impose restrictions
on that property purchased or leased of the nature described in clause (3) of the preceding
paragraph;




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




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



52









 







governing the Indebtedness being refinanced, as determined by the Board of Directors of
the Company in its reasonable and good faith judgment;




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




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




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




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




     (14) customary encumbrances and restrictions contained in agreements of the types
described in the definition of “Permitted Business Investments”;




     (15) Hedging Contracts permitted from time to time under this Indenture;




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




     (17) any Permitted Investment.


Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock.




     The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness, the
Company will not issue any Disqualified Stock, and the Company will not permit any of its
Restricted Subsidiaries to issue any preferred securities; provided, however, that the Company and
any of its Restricted Subsidiaries may incur Indebtedness or the Company may issue Disqualified
Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal
quarters for which internal financial statements are available immediately



53









 




preceding the date on which such additional Indebtedness is incurred or such Disqualified
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 Disqualified Stock had been issued, as the case may be, at the
beginning of such four-quarter period.




     The first paragraph of this Section 4.09 will not prohibit the incurrence of any of
the following items of Indebtedness or the issuance of any Disqualified Stock described in
clause (5), (12) or (15) or any preferred securities described in clause (11) below (collectively,
“Permitted Debt”):




     (1) the incurrence by the Company or any of its Restricted Subsidiaries of additional
Indebtedness (including letters of credit) under one or more Credit Facilities, provided
that, after giving effect to any such incurrence, the aggregate principal amount of all
Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company and its
Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2.0
billion and (b) an amount equal to 35.0% of the Company’s Adjusted Consolidated Net Tangible
Assets determined as of the date of such incurrence;




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




     (3) the incurrence by the Company and the Guarantors of Indebtedness represented by
(a) the Notes issued and sold on the Initial Issuance Date and the related Subsidiary
Guarantees to be issued on the Initial Issuance Date and (b) the Exchange Notes and the
related Subsidiary Guarantees to be issued pursuant to any Registration Rights Agreement;




     (4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money obligations,
in each case incurred for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment used in the business of
the Company or such Restricted Subsidiary and related financing costs, and Attributable Debt
in respect of sale and leaseback transactions, including all Permitted Refinancing
Indebtedness incurred to extend, refinance, renew, replace, defease or refund any
Indebtedness incurred pursuant to this clause (4), provided that after giving effect to any
such incurrence, the aggregate principal amount of all Indebtedness incurred pursuant to
this clause (4) and then outstanding does not exceed $25.0 million;




     (5) 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, refinance, renew, replace, defease, discharge, refund or otherwise retire for value,
in whole or in part, Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness) or Disqualified Stock of



54









 







the Company, in each case that was permitted by this Indenture to be incurred under
this Indenture (including Indebtedness previously incurred pursuant to this clause (5));




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




     (a) if the Company is the obligor on such Indebtedness and a Guarantor is not
the obligee, such Indebtedness must be expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Notes, or if a Guarantor is
the obligor on such Indebtedness and neither the Company nor another Guarantor is
the obligee, such Indebtedness must be expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Subsidiary Guarantee of such
Guarantor; and




     (b) (i) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company and (ii) any sale or other transfer of any such
Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of
the Company will be deemed, in each case, to constitute an incurrence (as of the
date of such issuance, sale or transfer) of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by this
clause (6);




     (7) the incurrence by the Company or any of its Restricted Subsidiaries of obligations
under Hedging Contracts;




     (8) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness
of the Company or any of its Restricted Subsidiaries that was permitted to be incurred by
another provision of this Section 4.09;




     (9) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
relating to net gas balancing positions arising in the ordinary course of business and
consistent with past practice;




     (10) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness in respect of bid, performance, surety and similar bonds issued for the account
of the Company and any of its Restricted Subsidiaries in the ordinary course of business,
including guarantees and obligations of the Company or any of its Restricted Subsidiaries
with respect to letters of credit supporting such obligations (in each case other than an
obligation for money borrowed);




     (11) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to
any of its Restricted Subsidiaries of any preferred securities; provided, however, that:



55









 






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




     (b) any sale or other transfer of any such preferred securities to a Person
that is not either the Company or a Restricted Subsidiary of the Company shall be
deemed, in each case, to constitute an issuance (as of the date of such issuance,
sale or transfer) of such preferred securities by such Restricted Subsidiary that
was not permitted by this clause (11);




     (12) Permitted Acquisition Indebtedness;




     (13) the incurrence by the Company or its Restricted Subsidiaries 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 in the ordinary course of
business;




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




     (15) accounts payable or other obligations of the Company or any of its Restricted
Subsidiaries to trade creditors created or assumed by the Company or such Restricted
Subsidiary in the ordinary course of business in connection with the obtaining of goods or
services;




     (16) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness arising from agreements of the Company or any Restricted Subsidiary of the
Company providing for indemnification, adjustment of purchase price, earn outs, or similar
obligations, in each case, incurred or assumed in connection with the disposition or
acquisition of any business, assets or Capital Stock of a Subsidiary in a transaction
permitted by this Indenture, other than guarantees of Indebtedness incurred or assumed by
any Person acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition; and




     (17) the incurrence by the Company or any of its Restricted Subsidiaries of additional
Indebtedness or the issuance by the Company of additional Disqualified Stock, provided that,
after giving effect to any such incurrence or issuance, the aggregate principal amount of
all Indebtedness and Disqualified Stock incurred or issued under this clause (17) and then
outstanding does not exceed the greater of (a) $50.0 million and (b) 1.0% of the Company’s
Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or
issuance.



     For purposes of determining compliance with this Section 4.09, in the event that an
item of Indebtedness or Disqualified Stock meets the criteria of more than one of the categories of
Permitted Debt described in clauses (1) through (17) above, or is entitled to be incurred or issued
pursuant to the first paragraph of this Section 4.09, the Company will be permitted to
divide and



56









 




classify (or later classify, reclassify or re-divide in whole or in part in its sole
discretion) such item of Indebtedness or Disqualified Stock in any manner that complies with this
Section 4.09. Any Indebtedness under Credit Facilities on the date of this Indenture shall
be considered incurred under the first paragraph of this Section 4.09. For purposes of
determining any particular amount of Indebtedness under this covenant, (i) guarantees of, or
obligations in respect of letters of credit relating to, Indebtedness otherwise included in the
determination of such amount shall not also be included and (ii) if obligations in respect of
letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred
pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to
other Indebtedness, then such other Indebtedness shall not be included.




     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, and the
payment of dividends on Disqualified Stock or preferred securities in the form of additional shares
of the same class of Disqualified Stock or preferred securities will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock or preferred securities for
purposes of this Section 4.09, provided, in each such case, that the amount thereof is
included in Fixed Charges of the Company as accrued.


Section 4.10 Limitation on Asset Sales.




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




     (1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration (including by way of relief from, or any Person assuming responsibilities for,
any liabilities, contingent or otherwise) at the time of the Asset Sale at least equal to
the fair market value of the assets or Equity Interests issued or sold or otherwise disposed
of; and




     (2) at least 75% of the aggregate consideration received by the Company and its
Restricted Subsidiaries in the Asset Sale 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 or such Restricted Subsidiary’s
most recent balance sheet, of the Company or any Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated in right of payment
to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any
such assets pursuant to a customary novation agreement that releases the Company or
such Subsidiary from further liability;




     (b) any securities, notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are, within 180 days after the
Asset Sale, converted by the Company or such Subsidiary into cash, to the extent of
the cash received in that conversion; and




     (c) accounts receivable of a business retained by the company or any of its
Restricted Subsidiaries, as the case may be, following the sale of such



57









 







business, provided that such accounts receivable (i) are not past due more than
90 days and (ii) do not have a payment date greater than 120 days from the date of
the invoices creating such accounts receivable.



     Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company (or the
applicable Restricted Subsidiary, as the case may be) may apply those Net Proceeds at its option to
any combination of the following:




     (I) to prepay, repay, redeem or repurchase Senior Debt;




     (II) to invest in or acquire Additional Assets; or




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



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



     Pending the final application of any Net Proceeds, the Company or any Restricted Subsidiary of
the Company may invest the Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding
paragraph will constitute “Excess Proceeds.”



     On the 366th day after an Asset Sale (or, at the Company’s option, any earlier date), if the
aggregate amount of Excess Proceeds then exceeds $20.0 million, the Company will make an Asset Sale
Offer to all Holders of Notes, and to all holders of Pari Passu Indebtedness then outstanding, to
purchase the maximum principal amount of Notes and such 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 principal amount plus accrued and unpaid interest and Additional Interest, if any, thereon
to the Settlement Date, subject to the right of Holders of record on the relevant record date to
receive interest due on an interest payment date that is on or prior to the Settlement Date, and
will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and Pari Passu Indebtedness tendered into
such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the Notes and
such Pari Passu Indebtedness to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Trustee so that only Notes in denominations of $2,000, or integral
multiples of $1,000 in excess of $2,000, shall be purchased). Upon surrender of a Note that is
repurchased in part, the Issuers shall issue in the name of the applicable Holder and the Trustee
shall authenticate for such Holder at the expense of the Issuers a new Note equal in principal
amount to the non-repurchased portion of the Note



58









 




surrendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be
reset at zero.




     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 provisions of
this Section 4.10, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under such provisions by virtue
of such compliance.


Section 4.11 Limitation on Transactions with Affiliates.




     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:




     (1) 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 an unrelated Person or, if in
the good faith judgment of the Company’s Board of Directors, no comparable transaction is
available with which to compare such Affiliate Transaction, such Affiliate Transaction is
otherwise fair to the Company or the relevant Restricted Subsidiary from a financial point
of view; and




     (2) the Company delivers to the Trustee:




     (a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $25.0 million, an
Officers’ Certificate certifying that such Affiliate Transaction complies with this
Section 4.11; and




     (b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $50.0 million, a
resolution of the Board of Directors of the Company set forth in an Officers’
Certificate certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors of the Company.



     The following items will not be deemed to be Affiliate Transactions and, therefore, will not
be subject to the provisions of the prior paragraph of this Section 4.11:




     (1) any employment agreement or arrangement, equity award, equity option or equity
appreciation agreement or plan, employee benefit plan, officer or director indemnification
agreement, severance agreement or other compensation plan or arrangement entered into by the
Company or any of its Restricted Subsidiaries in the



59









 







ordinary course of business, and payments, awards, grants or issuances of securities
pursuant thereto;




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




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




     (4) customary compensation, indemnification and other benefits made available to
officers, directors or employees of the Company or a Restricted Subsidiary or Affiliate of
the Company, including reimbursement or advancement of out-of-pocket expenses and provisions
of officers’ and directors’ liability insurance;




     (5) sales of Equity Interests (other than Disqualified Stock) to, or receipt of capital
contributions from, Affiliates of the Company;




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




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




     (8) the existence of, and 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 is a party on the date of this Indenture and which is
described in the Offering Memorandum, as such agreements may be amended, modified or
supplemented from time to time; provided, however, that any amendment, modification or
supplement entered into after the date of this Indenture will be permitted to the extent
that its terms are not materially more disadvantageous, taken as a whole, to the Holders of
the Notes than the terms of the agreements in effect on the date of this Indenture;




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




     (10) (a) guarantees by the Company or any of its Restricted Subsidiaries of performance
of obligations of the Company’s Unrestricted Subsidiaries in the ordinary course of
business, except for guarantees of Indebtedness in respect of borrowed money, and
(b) pledges by the Company or any Restricted Subsidiary of the Company of Equity



60









 







Interests in Unrestricted Subsidiaries for the benefit of lenders or other creditors of
the Company’s Unrestricted Subsidiaries;




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




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


Section 4.12 Limitation on Liens.




     The Company will not, and will not permit any of its Restricted Subsidiaries to, create,
incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other
than Permitted Liens) upon any of its property or assets (whether now owned or hereafter acquired),
securing Indebtedness, unless the Notes or the Subsidiary Guarantee of such Restricted Subsidiary,
as applicable, is secured on an equal and ratable basis with (or, in the case of obligations
subordinated in right of payment to the Notes or such Subsidiary Guarantee, as the case may be, on
a basis senior (to at least the same extent as the Notes are senior in right of payment) to) the
obligations so secured until such time as such obligations are no longer secured by a Lien.



     Any Lien on any property or assets of the Company or any of its Restricted Subsidiaries
created for the benefit of the Holders of the Notes pursuant to the preceding paragraph shall
provide by its terms that such Lien shall be automatically and unconditionally released and
discharged at such time as there are no other Liens of any kind (other than Permitted Liens) on
such property or assets securing Indebtedness.


Section 4.13 Additional Subsidiary Guarantees.




     If, after the date of this Indenture, any Restricted Subsidiary of the Company that is not
already a Guarantor guarantees any other Indebtedness of either of the Issuers or any Indebtedness
of any Guarantor in excess of the De Minimis Guaranteed Amount, or any Domestic Subsidiary, if not
then a Guarantor, incurs any Indebtedness under any of the Credit Facilities, then in either case
that Subsidiary shall become a Guarantor by executing a supplemental indenture substantially in the
form of Exhibit B hereto and delivering it to the Trustee within 30 Business Days of the date on
which it guaranteed or incurred such



61









 




Indebtedness, as the case may be, together with any Officers’ Certificate or Opinion of
Counsel required by Section 9.06; provided, however, that the preceding shall not apply to
Subsidiaries of the Company that have properly been designated as Unrestricted Subsidiaries in
accordance with this Indenture for so long as they continue to constitute Unrestricted
Subsidiaries. Notwithstanding the preceding, any Subsidiary Guarantee of a Restricted Subsidiary
that was incurred pursuant to this Section 4.13 shall provide by its terms that it shall be
automatically and unconditionally released at such time as such Guarantor ceases both (x) to
guarantee any other Indebtedness of either of the Issuers and any Indebtedness of any other
Guarantor (except as a result of payment under any such other guarantee) and (y) to be an obligor
with respect to any Indebtedness under any Credit Facility.




     Each Subsidiary Guarantee shall also be released in accordance with Article 10.


Section 4.14 Existence.




     Except as otherwise permitted pursuant to the terms hereof (including consolidation and merger
permitted by Section 5.01), the Company shall do or cause to be done all things necessary
to preserve and keep in full force and effect its limited liability company existence, and the
corporate, partnership, limited liability company or other existence of each of its Restricted
Subsidiaries, in accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Restricted Subsidiary; provided, however,
that the Company shall not be required to preserve the existence of any of its Restricted
Subsidiaries (except Finance Corp.) if the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and its Restricted
Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect to
the Holders of the Notes.


Section 4.15 Offer to Repurchase Upon Change of Control.




     Within 30 days following the occurrence of a Change of Control, the Company shall make an
offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess of $2,000) of each Holder’s Notes at a purchase price (the “Change of
Control Payment”) in cash equal to 101% of the aggregate principal amount of Notes repurchased,
plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of settlement
(the “Change of Control Settlement Date”), subject to the right of Holders of record on the
relevant record date to receive interest due on an interest payment date that is on or prior to the
Change of Control Settlement Date. Within 30 days following a Change of Control, the Company shall
mail a notice of the Change of Control Offer to each Holder and the Trustee describing the
transaction that constitutes the Change of Control and stating:




     (a) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes validly tendered and not withdrawn pursuant to the
Change of Control Offer will be accepted for payment;




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



62









 






     (c) that the Change of Control Offer will expire as of the time specified in such
notice on the Change of Control Purchase Date and that the Company shall pay the Change of
Control Purchase Price for all Notes purchased as of the Change of Control Purchase Date
promptly thereafter on the Change of Control Settlement Date;




     (d) that any Note not tendered will continue to accrue interest and Additional
Interest, if any;




     (e) 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 shall cease to accrue
interest and Additional Interest, if any, after the Change of Control Settlement Date;




     (f) that Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to surrender the Notes, properly endorsed for transfer, together with
the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes completed
and such customary documents as the Company may reasonably request, to the Paying Agent at
the address specified in the notice prior to the termination of the Change of Control Offer
on the Change of Control Purchase Date;




     (g) that Holders will be entitled to withdraw their election if the Paying Agent
receives, prior to the termination of the Change of Control Offer, a telegram, 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 its election to have
the Notes purchased; and




     (h) 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, which
unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of
$1,000 in excess of $2,000.



     If any of the Notes subject to a Change of Control Offer is in the form of a Global Note, then
the Company shall modify such notice to the extent necessary to accord with the procedures of the
Depository applicable to repurchases. Further, the Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the repurchase of Notes as a
result of a Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.15, the Company will comply with
the applicable securities laws and regulations and will not be deemed to have breached its
obligations under such provisions by virtue of such compliance.



     On the Change of Control Purchase Date, the Company shall, to the extent lawful, accept for
payment all Notes or portions thereof (in integral multiples of $1,000) properly tendered pursuant
to the Change of Control Offer. Promptly thereafter on the Change of Control Settlement Date, the
Company shall:



63









 






     (i) deposit with the Paying Agent by 11:00 a.m., New York City time, an amount equal to
the Change of Control Payment in respect of all Notes or portions thereof so tendered; and




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



     On the Change of Control Settlement Date, the Paying Agent shall mail 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 Depository) and the Trustee shall
authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any; provided, however,
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. The Company shall publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Settlement Date.



     The Change of Control provisions described in this Section 4.15 shall be applicable
whether or nor any other provisions of this Indenture are applicable.



     Prior to complying with any of the provisions of this Section 4.15, but in any event
no later than the Change of Control Purchase Date, the Company or any Guarantor shall either repay
all of its other outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing such Senior Debt to permit the repurchase of Notes required by this
Section 4.15.



     The Company shall not be required to make a Change of Control Offer following a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at the time and
otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of
Control Offer made by the Company and purchases all Notes properly tendered and not withdrawn under
such Change of Control Offer or (2) notice of redemption of all Notes has been given pursuant to
Section 3.07, unless there is a default in payment of the applicable redemption price.



     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 such Change of
Control at the time of making the Change of Control Offer.



     In the event that Holders of not less than 90% of the aggregate principal amount of the
outstanding Notes accept a Change of Control Offer and the Company 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 the purchase pursuant to such Change of Control
Offer, to redeem all of the Notes that remain outstanding following such purchase at a purchase
price equal to the Change of Control Payment plus, to the extent not included in the Change of
Control Payment, accrued and unpaid interest on the 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 that is on or prior to such date of redemption).



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Section 4.16 No Partial Inducements.




     The Company shall not, and the Company shall not permit any of its Subsidiaries, either
directly or indirectly, to pay (or cause to be paid) any consideration, whether by way of interest,
fee or otherwise, to any Beneficial Owner or Holder of the Notes for or as an inducement to any
consent to any waiver, supplement or amendment of any terms or provisions of this Indenture or the
Notes, unless such consideration is offered to be paid (or agreed to be paid) to all Beneficial
Owners and Holders of the Notes which so consent in the time frame set forth in the solicitation
documents relating to such consent.


Section 4.17 Limitations on Finance Corp. Activities.




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


Section 4.18 Designation of Restricted and Unrestricted Subsidiaries.




     The Board of Directors of the Company may designate any Restricted Subsidiary of the Company
to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted
Subsidiary of the Company is designated as an Unrestricted Subsidiary, the aggregate fair market
value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary properly designated as an Unrestricted Subsidiary will be deemed to be an Investment
made as of the time of the designation and will reduce the amount available for Restricted Payments
under the first paragraph of Section 4.07 or represent Permitted Investments, as determined
by the Company. That designation shall only be permitted if the Investment would be permitted at
that time and if the Subsidiary so designated otherwise meets the definition of an Unrestricted
Subsidiary.



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



ARTICLE 5

SUCCESSORS



Section 5.01 Merger, Consolidation, or Sale of Assets.




     Neither of the Issuers may, directly or indirectly, (x) consolidate or merge with or into
another Person (whether or not such Issuer is the survivor), or (y) sell, assign, transfer, lease,



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convey or otherwise dispose of all or substantially all of its properties or assets, in one or
more related transactions to another Person, unless:





     (a) either (1) such Issuer is the survivor or (2) the Person formed by or surviving any
such consolidation or merger (if other than such Issuer) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a Person organized
or existing under the laws of the United States, any state of the United States or the
District of Columbia; provided, however, that Finance Corp. may not consolidate or merge
with or into any Person other than a corporation satisfying such requirement so long as the
Company is not a corporation;




     (b) the Person formed by or surviving any such consolidation or merger (if other than
such Issuer) or the Person to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made assumes all the obligations of such Issuer under the
Notes, this Indenture and the applicable Registration Rights Agreement pursuant to a
supplemental indenture or other agreement in a form reasonably satisfactory to the Trustee;




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




     (d) in the case of a transaction involving the Company and not Finance Corp., either




     (i) 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 shall have been made will, at the time of
such transaction immediately after giving pro forma effect thereto and any related
financing transaction as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof; or




     (ii) immediately after giving effect to such transaction and any related
financing transactions on a pro forma basis as if the same had occurred at the
beginning of the Company’s most recently ended four full quarters for which internal
financial statements are available immediately preceding the date of the
transactions, the Fixed Charge Coverage Ratio of the Company or the Person formed by
or surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition has
been made, will be equal to or greater than the Fixed Charge Coverage Ratio of the
Company immediately prior to such transaction; or




     (iii) immediately after giving effect to such transaction and any related
financing transactions on a pro forma basis, the Consolidated Net Worth of the
Company will be greater than the Consolidated Net Worth of the Company immediately
prior to such transaction; and



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



     Notwithstanding the restrictions described in the foregoing clause (d), any Restricted
Subsidiary of the Company (other than an Issuer) may consolidate with, merge into or dispose of all
or part of its properties and assets to the Company, and the Company will not be required to comply
with the preceding clause (e) in connection with any such consolidation, merger or disposition.



     Notwithstanding the second preceding paragraph of this Section 5.01, the Company may
reorganize as any other form of entity in accordance with the following procedures provided that:




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




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




     (3) the entity so formed by or resulting from such reorganization assumes all the
obligations of the Company under the Notes, this Indenture and the applicable Registration
Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee;




     (4) immediately after such reorganization no Default or Event of Default exists; and




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



     For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a
single transaction or series of transactions) of all or substantially all of the properties or
assets of one or more Restricted Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of the Company.


Section 5.02 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 an Issuer in
accordance with Section 5.01 hereof, in which such Issuer is not the surviving entity, the
successor formed



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by such consolidation or into or with which such Issuer is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, such Issuer under this Indenture with
the same effect as if such successor had been named as such Issuer herein and shall be substituted
for such Issuer (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” or “Finance Corp.,” as the case may be, shall refer instead to the successor and not to
the Company or Finance Corp., as the case may be); and thereafter, if an Issuer is dissolved
following a transfer of all or substantially all of its properties or assets in accordance with
this Indenture (except in the case of a lease of all or substantially all of such Issuer’s assets),
it shall be discharged and released from all obligations and covenants under this Indenture and the
Notes. The Trustee shall enter into a supplemental indenture to evidence the succession and
substitution of such successor and such discharge and release of such Issuer.




ARTICLE 6

DEFAULTS AND REMEDIES



Section 6.01 Events of Default.




     An “Event of Default” occurs if one of the following shall have occurred and be continuing
(whatever the reason for such Event of Default and whether it shall be involuntary or be effected
by operation of law):




     (a) an Issuer defaults in the payment when due of interest or Additional Interest, if
any, with respect to the Notes, and such default continues for a period of 30 days;




     (b) an Issuer defaults in the payment of the principal of or premium, if any, on the
Notes when due at their Stated Maturity, upon optional redemption, upon required repurchase,
upon acceleration or otherwise;




     (c) the Company fails to comply with the provisions of Section 5.01 hereof or
to consummate a purchase of Notes when required pursuant to the provisions of
Section 3.09, 4.10 or 4.15 hereof;




     (d) the Company fails to comply with the provisions of Section 4.03 for 90 days after
notice to the Company by the Trustee or the Holders of at least 25% in principal amount of
the Notes then outstanding of such failure;




     (e) the Company fails to comply with any other covenant or other agreement in this
Indenture or the Notes (including the provisions of Section 3.09, 4.10 or
4.15 to the extent not described in clause (c) of this Section 6.01) for 60
days after notice to the Company by the Trustee or the Holders of at least 25% in principal
amount of the Notes then outstanding of such failure;




     (f) a default occurs 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



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which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the Initial Issuance Date, if such
default:




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




     (2) results in the acceleration of such Indebtedness prior to its Stated
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 $40.0 million or more;
provided, however, that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 30 days from the expiration of
the applicable grace period or the occurrence of such acceleration, as the case may be, such
Event of Default and any consequential acceleration of the Notes shall be automatically
rescinded, so long as such rescission does not conflict with any judgment or decree;




     (g) the Company or any of its Restricted Subsidiaries fails to pay final judgments
aggregating in excess of $40.0 million (to the extent not covered by insurance by a
reputable and creditworthy insurer as to which the insurer has not disclaimed coverage),
which judgments are not paid, discharged or stayed for a period of 60 consecutive days;




     (h) (1) any Subsidiary Guarantee is held in any judicial proceeding to be unenforceable
or invalid or ceases for any reason to be in full force and effect or (2) any Guarantor, or
any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its
Subsidiary Guarantee, except, in each case, by reason of the release of such Subsidiary
Guarantee in accordance with the provisions of this Indenture; and




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




     (1) commences a voluntary case,




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




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




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



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     (5) admits in writing it generally is not paying its debts as they become due;
or




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




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




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




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



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


Section 6.02 Acceleration.




     If any Event of Default occurs and is continuing, the Trustee, by notice to the Issuers, or
the Holders of at least 25% in principal amount of the then outstanding Notes, by notice to the
Issuers and the Trustee, may declare all the Notes to be due and payable immediately. Upon any
such declaration, the Notes shall become due and payable immediately, together with all accrued and
unpaid interest, Additional Interest, if any, and premium, if any, thereon. Notwithstanding the
preceding, if an Event of Default specified in clause (i) or (j) of Section 6.01 hereof
occurs with respect to the Company, Finance Corp., any of the Company’s Restricted Subsidiaries
that is a Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the
Company that, taken together, would constitute a Significant Subsidiary of the Company, all
outstanding Notes shall become due and payable immediately without further action or notice,
together with all accrued and unpaid interest, Additional Interest, if any, and premium, if any,
thereon. The Holders of a majority in principal amount of the then outstanding Notes by notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing Events of Default
(except with respect to nonpayment of principal, interest, premium or Additional Interest, if any,
that have become due solely because of the acceleration) have been cured or waived.




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	Section 6.03	 	Other Remedies.





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



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




			
	Section 6.04	 	Waiver of Past Defaults.





     Holders of a majority in principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of the Holders of all of the Notes waive (including, without limitation, in
connection with a purchase of, or tender offer or exchange offer for, Notes) any existing Default
or Event of Default and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, or interest, premium, or Additional Interest, if any, on, the
Notes. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right consequent thereon.




			
	Section 6.05	 	Control by Majority.





     Holders of a majority in principal amount of the then outstanding Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal
liability. In case an Event of Default has occurred and is continuing, prior to taking any action
hereunder, the Trustee shall be entitled to reasonable indemnification against all loss, liability
and expenses caused by the taking or not taking of such action.




			
	Section 6.06	 	Limitation on Suits.





     A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:




     (a) the Holder of a Note gives to the Trustee written notice of a continuing Event of
Default;




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



71









 






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




     (d) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer and, if requested, the provision of indemnity; and




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


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





			
	Section 6.07	 	Rights of Holders of Notes to Receive Payment.





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




			
	Section 6.08	 	Collection Suit by Trustee.





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




			
	Section 6.09	 	Trustee is Authorized to File Proofs of Claim.





     The Trustee is authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes), their creditors or their property and shall be entitled and
empowered to collect, receive and distribute any money or other property payable or deliverable on
any such claims, and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent
that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of
the estate in any such proceeding, shall be denied



72









 




for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties that the Holders may
be entitled to receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any
Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.





			
	Section 6.10	 	Priorities.





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




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




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




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



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




			
	Section 6.11	 	Undertaking for Costs.





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



ARTICLE 7

TRUSTEE





			
	Section 7.01	 	Duties of Trustee.






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



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




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




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




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




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




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




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




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




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




     (f) No provision of this Indenture shall require the Trustee to expend or risk its own
funds or incur any liability. In case an Event of Default occurs and is continuing, the
Trustee will be under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holder unless such Holder has offered to the Trustee
reasonable indemnity or security against any loss, liability or expense.




     (g) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder and in its capacity as
Trustee under any other agreement executed in connection with the Indenture to which the
Trustee is a party.



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	Section 7.02	 	Rights of Trustee.






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




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




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




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




     (e) Unless otherwise specifically provided in this Indenture, any demand, request,
direction or notice from an Issuer shall be sufficient if signed by an Officer of such
Issuer. The Trustee may, from time to time or at any time, request that the Issuers deliver
an Officers’ Certificate setting forth the names of individuals and/or titles of officers of
each Issuer authorized at such time to deliver, on behalf of such Issuer, an Officers’
Certificate or order to, or otherwise take specified actions on behalf of such Issuer with
respect to, the Trustee pursuant to this Indenture, which Officers’ Certificate may be
signed on behalf of such Issuer by any person authorized, on behalf of such Issuer, to sign
an Officers’ Certificate, including any person specified as so authorized in any such
certificate previously delivered by such Issuer.




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




     (g) The Trustee shall have no duty to inquire as to the performance of the Company’s
covenants in Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except: (1) any Event of Default occurring
pursuant to Section 6.01(a) or 6.01(b) hereof; or (2) any Default or Event
of Default of which a Responsible Officer shall have received written notification or
obtained actual knowledge.




     (h) The permissive right of the Trustee to act hereunder shall not be construed as a
duty.



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     (i) In no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of
profit) irrespective of whether the Trustee has been advised of the likelihood of such loss
or damage and regardless of the form of action.




     (j) The delivery of documents and information to the Trustee under Section 4.03
is for informational purposes only, and the Trustee’s receipt of the foregoing shall not
constitute constructive notice of any information contained therein or determinable from the
information contained therein, including the Company’s compliance with any of its covenants
hereunder, except to the extent that such documents and information would constitute notice
under Section 7.02(g) of this Indenture.




			
	Section 7.03	 	Individual Rights of Trustee.





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




			
	Section 7.04	 	Trustee’s Disclaimer.





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




			
	Section 7.05	 	Notice of Defaults.





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




			
	Section 7.06	 	Reports by Trustee to Holders of the Notes.





     Within 60 days after each April 15 beginning with the April 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of
the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no
event described in TIA § 313(a) has occurred within the twelve months preceding the reporting



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date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2), to
the extent applicable, and § 313(b)(1). The Trustee shall also transmit by mail all reports as
required by TIA § 313(c).




     A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to
the Issuers and filed with the SEC and each stock exchange (if any) on which the Notes are listed
in accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Notes are
listed on or de-listed from any stock exchange.




			
	Section 7.07	 	Compensation and Indemnity.





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



     The Issuers and the Guarantors shall indemnify the Trustee, jointly and severally, against any
and all losses, liabilities, damages, claims or expenses, including taxes (other than those based
upon, measured by or determined by the income of the Trustee) and the reasonable out of pocket fees
and expenses of counsel, incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Issuers and the Guarantors (including this Section 7.07) and
defending itself against any claim (whether asserted by an Issuer, any Guarantor or any Holder or
any other Person) or liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent any such loss, liability, damage, claim or expense may be
attributable to its gross negligence, bad faith or willful misconduct. The Trustee shall notify
the Issuers and the Guarantors promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Issuers and the Guarantors shall not relieve the Issuers or the
Guarantors of their obligations hereunder. The Issuers and the Guarantors shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the
Issuers and the Guarantors shall pay the reasonable fees and expenses of such counsel; provided
that the Issuers and the Guarantors will not be required to pay such fees and expenses if they
assume the Trustee’s defense with counsel acceptable to and approved by the Trustee (such approval
not to be unreasonably withheld) and there is no conflict of interest between the Issuers and the
Trustee in connection with such defense. The Issuers and the Guarantors need not pay for any
settlement made without their consent, which consent shall not be unreasonably withheld.



     The obligations of the Issuers and the Guarantors under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.



     To secure the Issuers’ and the Guarantors’ payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien



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shall survive the satisfaction and discharge of this Indenture and the resignation or removal
of the Trustee.




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



     The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.




			
	Section 7.08	 	Replacement of Trustee.





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



     The Trustee may resign in writing upon thirty (30) days notice at any time and be discharged
from the trust hereby created by so notifying the Issuers. The Holders of Notes of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee
and the Issuers in writing and may appoint a successor trustee with the consent of the Issuers.
The Issuers may remove the Trustee if:




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




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




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




     (d) the Trustee becomes incapable of acting.



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



     If a successor Trustee does not take office within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Issuers or the Holders of Notes of at least 10% in
aggregate principal amount of the then outstanding Notes may petition any court of competent
jurisdiction, at the expense of the Issuers, for the appointment of a successor Trustee.



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



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




			
	Section 7.09	 	Successor Trustee by Merger, etc.





     If the Trustee consolidates with, or merges or converts into, or transfers or sells all or
substantially all of its corporate trust business or assets to, another corporation or banking
association, the successor corporation or banking association without any further act shall be the
successor Trustee. As soon as practicable, the successor Trustee shall mail a notice of its
succession to the Issuers and the Holders of the Notes.




			
	Section 7.10	 	Eligibility; Disqualification.





     There shall at all times be a Trustee hereunder that is a corporation organized and doing
business under the laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition. No obligor upon the
Notes shall serve as a Trustee.



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




			
	Section 7.11	 	Preferential Collection of Claims Against Issuers.





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



ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE





			
	Section 8.01	 	Option to Effect Legal Defeasance or Covenant Defeasance.





     The Issuers may, at the option of their respective Boards of Directors evidenced by a
resolution set forth in an Officers’ Certificate, at any time, exercise their rights under either
Section 8.02 or 8.03 hereof with respect to all outstanding Notes upon compliance
with the conditions set forth below in this Article 8.



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	Section 8.02	 	Legal Defeasance and Discharge.





     Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this
Section 8.02, the Issuers shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be deemed to have discharged their obligations with respect to all
outstanding Notes, and each Guarantor shall be deemed to have discharged its obligations with
respect to its Subsidiary Guarantee, on the date the conditions set forth in Section 8.04
below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means
that the Issuers shall be deemed to have paid and discharged the entire Indebtedness represented by
the outstanding Notes, and each Guarantor shall be deemed to have paid and discharged its
Subsidiary Guarantee (which in each case shall thereafter be deemed to be “outstanding” only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in
(a) and (b) below) and to have satisfied all its other obligations under such Notes or Subsidiary
Guarantee and this Indenture (and the Trustee, on demand of and at the expense of the Issuers,
shall execute proper instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof,
and as more fully set forth in such Section, payments in respect of the principal of and interest,
premium, and Additional Interest, if any, on, such Notes when such payments are due, (b) the
Issuers’ obligations with respect to such Notes under Sections 2.03, 2.04,
2.07, 2.09 and 4.02 hereof and the Appendix, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Issuers’ and the Guarantors’
obligations in connection therewith and (d) the Legal Defeasance provisions of this Article
8. Subject to compliance with this Article 8, the Issuers may exercise their option
under this Section 8.02 notwithstanding the prior exercise of their option under
Section 8.03 hereof.



     If the Issuers exercise their Legal Defeasance option, each Guarantor will be released and
relieved of any obligations under its Subsidiary Guarantee, and any security for the Notes (other
than the trust) will be released.




			
	Section 8.03	 	Covenant Defeasance.





     Upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, the Issuers shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be released from their obligations under the covenants contained in
Article 4 (other than those in Sections 4.01, 4.02 and 4.06 and,
solely with respect to the Issuers, 4.14) and in clause (d) of Section 5.01 hereof
on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter,
“Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes
of any direction, waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all
other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Issuers and any Guarantor may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by
reason of any reference in any such covenant to any other provision herein or in any other document
and such omission to comply shall not constitute a



80









 




Default or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition,
upon the Issuers’ exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, Section 6.01(d) and Sections 6.01(f) through 6.01(h)
hereof shall not constitute Events of Default.




     If the Issuers exercise their Covenant Defeasance option, each Guarantor will be released and
relieved of any obligations under its Subsidiary Guarantee and any security for the Notes (other
than the trust) will be released.




			
	Section 8.04	 	Conditions to Legal or Covenant Defeasance.





     In order to exercise either Legal Defeasance or Covenant Defeasance:




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




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




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




     (2) since the Initial Issuance Date, there has been a change in the applicable
federal income tax law,




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




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




     (d) no Default or Event of Default shall have occurred and be continuing on the date of
such deposit (other than a Default or Event of Default resulting from the



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incurrence of Indebtedness or other borrowing of funds or the grant of Liens securing
such Indebtedness or other borrowing, all or a portion of the proceeds of which will be
applied to such deposit pursuant to this Section 8.04);




     (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any material agreement or instrument (other
than this Indenture) to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound;




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




     (g) the Issuers shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.




			
	Section 8.05	 	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.





     Subject to Section 8.06 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee pursuant to Section 8.04 or
8.08 hereof in respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company or any of its Subsidiaries acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, interest, premium, and Additional Interest, if any, but
such money need not be segregated from other funds except to the extent required by law.



     The Issuers shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the cash or non-callable Government Securities deposited pursuant to
Section 8.04 or 8.08 hereof or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the account of the Holders
of the outstanding Notes.



     Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver
or pay to the Issuers from time to time upon the written request of the Issuers any money or
non-callable Government Securities held by it as provided in Section 8.04 or 8.08
hereof which, in the opinion of a nationally recognized investment banking, appraisal firm or firm
of independent public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of
the amount thereof that would then be required to be deposited to effect an equivalent Legal
Defeasance, Covenant Defeasance or Discharge, as the case may be.




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Section 8.06 Repayment to Issuers.




     Subject to applicable escheat and abandoned property laws, any money or non-callable
Government Securities deposited with the Trustee or any Paying Agent, or then held by an Issuer, in
trust for the payment of the principal of, or interest, premium, or Additional Interest, if any,
on, any Note and remaining unclaimed for two years after such principal, interest, premium, or
Additional Interest, if any, has become due and payable shall be paid to the Issuers on their
written request or (if then held by an Issuer) shall be discharged from such trust; and the Holder
of such Note shall thereafter, as an unsecured creditor, look only to the Issuers for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money or
non-callable Government Securities, and all liability of the Issuers as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to
make any such repayment, may at the expense of the Issuers cause to be published once, in the New
York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then remaining will be repaid
to the Issuers.



Section 8.07 Reinstatement.




     If the Trustee or Paying Agent is unable to apply any money or non-callable Government
Securities in accordance with Section 8.05 hereof, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers’ obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.05 hereof; provided, however, that, if an Issuer makes any
payment of principal of, interest, premium, or Additional Interest, if any, on, any Note following
the reinstatement of its obligations, such Issuer shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the money or Government Securities deposited with or
held by the Trustee or Paying Agent.



Section 8.08 Discharge.




     This Indenture shall be satisfied and discharged and shall cease to be of further effect as to
all Notes issued hereunder (except for (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in clause (b) of this Section 8.08, and as more fully
set forth in such clause (b), payments in respect of the principal of and interest, premium and
Additional Interest, if any, on, such Notes when such payments are due, (b) the Issuers’
obligations with respect to such Notes under Sections 2.03, 2.04, 2.07,
2.09 and 4.02 hereof and the Appendix and (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Issuers’ obligations in connection therewith), and
the Trustee, at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to all the Notes, when:



          (1) either:






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          (a) all Notes that have been authenticated, except lost, stolen or destroyed
Notes that have been replaced or paid and Notes for whose payment money has been
deposited in trust and thereafter repaid to the Issuers, have been delivered to the
Trustee for cancellation; or




          (b) all Notes that have not been delivered to the Trustee for cancellation have
become due and payable or will become due and payable within one year by reason of
the mailing of a notice of redemption or otherwise, and the Issuers or any Guarantor
has irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars and non-callable
Government Securities, in amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire indebtedness on the Notes
not delivered to the Trustee for cancellation for principal, accrued interest,
premium, if any, and Additional Interest, if any, to the date of fixed maturity or
redemption;




     (2) no Default or Event of Default has occurred and is continuing on the date of the
deposit or will occur as a result of the deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness or other borrowing of funds or the grant of
Liens securing such Indebtedness or other borrowing, all or a portion of the proceeds of
which will be applied to such deposit) and the deposit will not result in a breach or
violation of, or constitute a default under, any material agreement or instrument (other
than this Indenture) to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound;




     (3) the Issuers and the Guarantors have paid or caused to be paid all other sums
payable by them under this Indenture;




     (4) the Issuers have delivered irrevocable instructions to the Trustee to apply the
deposited money toward the payment of the Notes at fixed maturity or the redemption date, as
the case may be; and




     (5) the Issuers have delivered an Officers’ Certificate and an Opinion of Counsel to
the Trustee stating that all conditions precedent to satisfaction and discharge of this
Indenture (“Discharge”) have been satisfied.



ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER




Section 9.01 Without Consent of Holders of Notes.




     Notwithstanding Section 9.02 of this Indenture, the Issuers, the Guarantors and the
Trustee may amend or supplement this Indenture or the Notes without the consent of any Holder of a
Note:




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



84









 






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




     (c) to provide for the assumption of an Issuer’s obligations to the Holders of Notes
pursuant to Article 5 hereof;




     (d) to make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights hereunder of any
such Holder, provided that any change to conform this Indenture to the Offering Memorandum
shall not be deemed to adversely affect the legal rights hereunder of any Holder;




     (e) to secure the Notes or the Subsidiary Guarantees pursuant to the requirements of
Section 4.12 or otherwise;




     (f) to provide for the issuance of Additional Notes in accordance with the limitations
set forth in this Indenture;




     (g) to add any additional Guarantor with respect to the Notes or to evidence the
release of any Guarantor from its Subsidiary Guarantee in accordance with Article 10
hereof;




     (h) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;




     (i) to evidence or provide for the acceptance of appointment under this Indenture of a
successor Trustee; or




     (j) to conform the text of this Indenture, the Subsidiary Guarantees or the Notes to
any provision described in the “Description of Notes” contained in the Offering Memorandum.



     Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the
Issuers and the Guarantors in the execution of any amended or supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or immunities under this
Indenture or otherwise.



Section 9.02 With Consent of Holders of Notes.




     Except as provided above in Section 9.01 and below in this Section 9.02, the
Issuers, the Guarantors and the Trustee may amend or supplement this Indenture and the Notes may be
amended or supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.04
and 6.07



85









 




hereof, any existing Default or Event of Default or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including consents obtained in connection
with a purchase of, tender offer or exchange offer for Notes). However, without the consent of
each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by
a non-consenting Holder):





     (a) reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;




     (b) reduce the principal of or change the fixed maturity of any Note or alter any of
the provisions with respect to the redemption or repurchase of the Notes (other than the
provisions relating to the covenants in Sections 3.09, 4.10 and 4.15
hereof);




     (c) reduce the rate of or change the time for payment of interest, including default
interest, on any Note;




     (d) waive a Default or Event of Default in the payment of principal of, or interest,
premium, or Additional Interest, if any, on, the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in principal amount of the Notes and a
waiver of the payment default that resulted from such acceleration);




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




     (f) make any change in the provisions of this Indenture relating to waivers of past
Defaults or Events of Default or the rights of Holders of Notes to receive payments of
principal of, or interest, premium, or Additional Interest, if any, on, the Notes (except as
permitted in clause (g) below);




     (g) waive a redemption or repurchase payment with respect to any Note (other than a
payment required by Sections 3.09, 4.10 and 4.15 hereof);




     (h) release any Guarantor from any of its obligations under its Subsidiary Guarantee or
this Indenture, except in accordance with the terms of this Indenture; or




     (i) make any change in the preceding amendment, supplement and waiver provisions.



     Upon the request of the Issuers accompanied by Board Resolutions authorizing their execution
of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt
by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join
with the Issuers and the Guarantors in the execution of such amended or supplemental indenture,
unless such amended or supplemental indenture affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental indenture.



86









 





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



     After an amendment, supplement or waiver under this Section becomes effective, the Company
shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amended or supplemental
Indenture or waiver.



Section 9.03 Compliance with Trust Indenture Act.




     Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended
or supplemental Indenture that complies with the TIA as then in effect.



     A consent to any amendment, supplement or waiver under this Indenture by any Holder given in
connection with a purchase, tender or exchange of such Holder’s Notes shall not be rendered invalid
by such purchase, tender or exchange.



Section 9.04 Revocation and Effect of Consents.




     Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a
Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of
the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and, except as provided in the second
succeeding paragraph, thereafter binds every Holder.



     The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the second to last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment or waiver or revoke any
consent previously given, whether or not such Persons continue to be Holders after such record
date. No consent shall be valid or effective for more than 90 days after such record date except
to the extent that the requisite number of consents to the amendment, supplement or waiver have
been obtained within such 90-day period or as set forth in the next paragraph of this Section
9.04.



     After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless
it makes a change described in any of clauses (a) through (i) of Section 9.02, in which
case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented
to it and every subsequent Holder of a Note or portion of a Note that evidences the same
indebtedness as the consenting Holder’s Note.



87









 





Section 9.05 Notation on or Exchange of Notes.




     The Trustee may place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Issuers, in exchange for all Notes, may issue and the Trustee
shall authenticate new Notes that reflect the amendment, supplement or waiver.



     Failure to make the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.



Section 9.06 Trustee to Sign Amendments, etc.




     The Trustee shall sign any amended or supplemental indenture authorized pursuant to this
Article 9 if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If any such amendment or supplement does adversely
affect the rights, duties, liabilities or immunities of the Trustee, the Trustee may, but need not,
sign such amended or supplemented Indenture. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted by this Indenture.



Section 9.07 Acts of Holders.





     (a) Any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given, made or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the “Act” of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to Section
7.01) conclusive in favor of the Trustee and the Company, if made in the manner provided
in this Section.




     Without limiting the generality of this Section, unless otherwise provided in or
pursuant to this Indenture, (i) a Holder, including a Depository or its nominee that is a
Holder of a Global Note, may give, make or take, by an agent or agents duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver or other
action provided in or pursuant to this Indenture to be given, made or taken by Holders, and
a Depository or its nominee that is a Holder of a Global Note may duly appoint in writing as
its agent or agents members of, or participants in, such Depository holding interests in
such Global Note in the records of such Depository; and (ii) with respect to any Global Note
the Depository for which is The Depository Trust Company (“DTC”), any consent or other
action given, made or taken by an “agent member” of DTC by electronic means in accordance
with the Automated Tender Offer Procedures system or other customary procedures of, and
pursuant to authorization by, DTC shall be deemed to



88









 






constitute the “Act” of the Holder of such Global Note, and such Act shall be deemed to
have been delivered to the Company and the Trustee upon the delivery by DTC of an “agent’s
message” or other notice of such consent or other action having been so given, made or taken
in accordance with the customary procedures of DTC.




     (b) The fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a certificate of a
notary public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a Person acting in a capacity other than such
Person’s individual capacity, such certificate or affidavit shall also constitute sufficient
proof of the authority of the Person executing the same. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient.




     (c) The ownership of Notes shall be proved by the Register.




     (d) Without limiting the foregoing, a Holder entitled hereunder to give, make or take
any action hereunder with regard to any particular Note may do so, or duly appoint in
writing any Person or Persons as its agent or agents to do so, with regard to all or any
part of the principal amount of such Note.



ARTICLE 10

GUARANTEES OF NOTES




Section 10.01 Subsidiary Guarantees.




     Subject to this Article 10, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees, on a senior unsecured basis, to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Notes held thereby and the Obligations of the
Issuers hereunder and thereunder, that: (a) the principal of, and interest, premium and Additional
Interest, if any, on, the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at Stated Maturity, by acceleration, upon repurchase or redemption or
otherwise, and interest on the overdue principal of, premium, and (to the extent permitted by law)
interest and Additional Interest, if any, on, the Notes, and all other payment Obligations of the
Issuers to the Holders or the Trustee under the Indenture or the Notes will be promptly paid in
full and performed, all in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other Obligations, the same
will be promptly paid in full when due or performed in accordance with the terms of the extension
or renewal, subject to any applicable grace period, whether at Stated Maturity, by acceleration,
upon repurchase or redemption or otherwise. Failing payment when so due of any amount so
guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the
same immediately. An Event of Default under this Indenture or the Notes shall constitute an event
of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the
obligations of the Guarantors hereunder in the same manner and to the same extent as the
Obligations of the Issuers.



89









 





     The Guarantors hereby agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against an Issuer, any action to enforce
the same or any other circumstance (other than complete performance) which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor further, to
the extent permitted by law, hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of an Issuer, any right to require a
proceeding first against an Issuer, protest, notice and all demands whatsoever and covenants that
its Subsidiary Guarantee will not be discharged except by complete performance of the Obligations
contained in the Notes and this Indenture.



     If any Holder or the Trustee is required by any court or otherwise to return to an Issuer, the
Guarantors, or any Custodian, Trustee or other similar official acting in relation to any of the
Issuers or the Guarantors, any amount paid by an Issuer or any Guarantor to the Trustee or such
Holder, the Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Obligations guaranteed hereby until
payment in full of the Obligations guaranteed hereby.



     Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (a) the maturity of the Obligations guaranteed hereby
may be accelerated as provided in Article 6 hereof for the purposes of its Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration
in respect of the Obligations guaranteed thereby, and (b) in the event of any declaration of
acceleration of such Obligations as provided in Article 6 hereof, such Obligations (whether
or not due and payable) shall forthwith become due and payable by the Guarantor for the purpose of
its Subsidiary Guarantee. The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the rights of the
Holders under the Subsidiary Guarantees.



Section 10.02 Guarantors May Consolidate, etc., on Certain Terms.





     (a) No Guarantor shall sell or otherwise dispose of, in one or more related
transactions, all or substantially all of its properties or assets to, or consolidate with
or merge with or into (whether or not such Guarantor is the surviving Person), another
Person (other than the Company or another Guarantor), unless, (i) either (1) 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 Guarantor)
unconditionally assumes, pursuant to a supplemental indenture substantially in the form of
Annex A hereto, all the obligations of such Guarantor under the Notes, this Indenture and
its Subsidiary Guarantee on terms set forth therein, or (2) such transaction or series of
related transactions complies with the provisions of Section 4.10, and (ii)
immediately after giving effect to such transaction or series of related transactions, no
Default or Event of Default exists.



90









 






     (b) In the case of any such consolidation or merger and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the Trustee and
substantially in the form of Annex A hereto, of the Subsidiary Guarantee of, and the due and
punctual performance of all of the covenants of this Indenture to be performed by, the
applicable Guarantor, such successor Person shall succeed to and be substituted for such
Guarantor with the same effect as if it had been named herein as a Guarantor.



Section 10.03 Releases of Subsidiary Guarantees.




     The Subsidiary Guarantee of a Guarantor shall be released: (1) in connection with any sale or
other disposition of all or substantially all of the properties or assets of such 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 of the Company, if the
sale or other disposition complies with Section 4.10; (2) in connection with any sale or
other disposition of all of the Capital Stock of such Guarantor to a Person that is not (either
before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the
Company, if the sale or other disposition complies with Section 4.10; (3) if such Guarantor
is a Restricted Subsidiary and the Company designates such Guarantor as an Unrestricted Subsidiary
in accordance with Section 4.18 of this Indenture; (4) upon Legal Defeasance or Covenant
Defeasance or Discharge in accordance with Article 8; (5) upon the liquidation or
dissolution of such Guarantor provided no Default or Event of Default has occurred or is
continuing; (6) at such time as such Guarantor ceases both (x) to guarantee any other Indebtedness
of either of the Issuers and any Indebtedness of any other Guarantor (except as a result of payment
under any such other guarantee) and (y) to be an obligor with respect to any Indebtedness under any
Credit Facility; or (7) upon such Guarantor consolidating with, merging into or transferring all of
its properties or assets to the Company or another Guarantor, and as a result of, or in connection
with, such transaction such Guarantor dissolving or otherwise ceasing to exist.



     Upon delivery by the Company to the Trustee of an Officers’ Certificate to the effect that any
of the conditions described in the foregoing clauses (1) — (7) has occurred, the Trustee shall
execute any documents reasonably requested by the Company in order to evidence the release of any
Guarantor from its obligations under its Subsidiary Guarantee. Any Guarantor not released from its
obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of
and interest, premium, and Additional Interest, if any, on, the Notes and for the other obligations
of such Guarantor under this Indenture as provided in this Article 10.



Section 10.04 Limitation on Guarantor Liability.




     The obligations of each Guarantor under its Subsidiary Guarantee will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its Subsidiary
Guarantee or pursuant to its contribution obligations under this Indenture, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal or state law and not otherwise being void or
voidable under any similar laws affecting the rights of creditors generally.



91









 





Section 10.05 “Trustee” to Include Paying Agent.




     In case at any time any Paying Agent other than the Trustee shall have been appointed and be
then acting hereunder, the term “Trustee” as used in this Article 10 shall in each case
(unless the context shall otherwise require) be construed as extending to and including such Paying
Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were
named in this Article 10 in place of the Trustee.



ARTICLE 11

MISCELLANEOUS




Section 11.01 Trust Indenture Act Controls.




     If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by
TIA § 318(c), such TIA-imposed duties shall control. If any provision hereof limits, qualifies or
conflicts with a provision of the TIA which is required to be a part of and govern this Indenture,
such required provision of the TIA shall control. If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA
shall be deemed to apply to this Indenture as so modified or shall be excluded, as the case may be.



Section 11.02 Notices.




     Any notice or communication by an Issuer, any Guarantor or the Trustee to the other parties
hereto is duly given if in writing (in the English language) and delivered in person or mailed by
first class mail (registered or certified, return receipt requested), facsimile or overnight air
courier guaranteeing next day delivery, to their respective addresses:



     If to any of the Issuers or the Guarantors:


Linn Energy, LLC

600 Travis, Suite 5100

Houston, Texas 77002

Attention: Chief Financial Officer

Facsimile No.: (281) 840-4186




     with a copy to (which shall not constitute notice):


Baker Botts L.L.P.

One Shell Plaza, 910 Louisiana

Houston, Texas 77002

Attention: Kelly Rose

Facsimile No.: (713) 229-7996







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     If to the Trustee:


U.S. Bank National Association

Corporate Trust Services

5555 San Felipe Street, Suite 1150

Houston, Texas 77056

Attention: Steven A. Finklea

Facsimile No.: (713) 235-9213




     An Issuer, any of the Guarantors or the Trustee, by notice to the other parties hereto, may
designate additional or different addresses for subsequent notices or communications.



     All notices and communications (other than those sent to Holders) shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if sent by
facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery, in each case to the address shown above.



     Any notice or communication to a Holder shall be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. All notices and communications to a
Holder shall be deemed to have been duly given: five Business Days after being deposited in the
mail, postage prepaid, if mailed, and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery, in each case to the address of the
Holder shown on the register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail
a notice or communication to a Holder or any defect in it shall not affect its sufficiency with
respect to other Holders.



     If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.



     If either of the Issuers mails a notice or communication to Holders, it shall mail a copy to
the Trustee and each Agent at the same time.



     Where this Indenture provides for notice in any manner, such notice may be waived in writing
by the Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.



     Where this Indenture provides for notice of any event to a Holder of a Global Note, such
notice shall be sufficiently given if given to the Depository for such Note (or its designee),
pursuant to its Applicable Procedures, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice.



93









 





Section 11.03 Communication by Holders of Notes with Other Holders of Notes.




     Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Issuers, the Trustee, the Registrar and anyone else
shall have the protection of TIA § 312(c).



Section 11.04 Certificate and Opinion as to Conditions Precedent.




     Upon any request or application by an Issuer to the Trustee to take any action or refrain from
taking any action under this Indenture, such Issuer shall furnish to the Trustee:




     (a) an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 11.05 hereof)
stating that, in the opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been satisfied; and




     (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which shall include the statements set forth in Section 11.05 hereof) stating that,
in the opinion of such counsel, all such conditions precedent and covenants have been
satisfied.



Section 11.05 Statements Required in Certificate or Opinion.




     Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply
with the provisions of TIA § 314(e) and shall include:




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




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




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




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



     In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.



94









 





     Any certificate or opinion of an officer of the Company may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of, or representation by, counsel may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to such factual
matters is in the possession of the Company unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations with respect to
such matters are erroneous.



     Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.



Section 11.06 Rules by Trustee and Agents.




     The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for its functions.



Section 11.07 No Personal Liability of Directors, Officers, Employees and Unitholders.




     No past, present or future director, officer, partner, employee, incorporator, manager or
unitholder or other owner of Capital Stock of the Issuers or any Guarantor, as such, shall have any
liability for any obligations of the Issuers or any Guarantor under the Notes, the Subsidiary
Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for issuance of the Notes.



Section 11.08 Governing Law.




     THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.



Section 11.09 No Adverse Interpretation of Other Agreements.




     This Indenture may not be used to interpret any other indenture, loan or debt agreement of the
Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.



Section 11.10 Successors.




     All agreements of the Issuers and the Guarantors in this Indenture and the Notes shall bind
their respective successors. All agreements of the Trustee in this Indenture shall bind its
successors.



95









 





Section 11.11 Severability.




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



Section 11.12 Table of Contents, Headings, etc.




     The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part of
this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.



Section 11.13 Counterparts.




     This Indenture may be signed in counterparts and by the different parties hereto in separate
counterparts, each of which shall constitute an original and all of which together shall constitute
one and the same instrument.



Section 11.14 Benefits of Indenture.




     Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, and the Holders of Notes, any benefit or
any legal or equitable right, remedy or claim under this Indenture.



Section 11.15 Language of Notices, Etc.




     Any request, demand, authorization, direction, notice, consent, waiver or Act required or
permitted under this Indenture shall be in the English language, except that any published notice
may be in an official language of the country of publication.



[Signatures on following pages]









96









 








SIGNATURES




	 	 	 	 	 
	 	Issuers



Linn Energy, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Linn Energy Finance Corp.

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Guarantors



Linn Operating, Inc.

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Linn Energy Holdings, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Penn West Pipeline, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 



Signature Page to Indenture




 









 








	 	 	 	 	 
	 	Mid-Continent Holdings I, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Mid-Continent Holdings II, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Mid-Continent I, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Linn Gas Marketing, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Mid-Continent II, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 



Signature Page to Indenture




 









 








	 	 	 	 	 
	 	Linn Exploration Midcontinent, LLC

 	 
	 	By:  	/s/ Kolja Rockov
 	 
	 	 	Name:  	Kolja Rockov 	 
	 	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	Trustee



U.S. Bank National Association, As Trustee

 	 
	 	By:  	/s/ Steven Finklea
 	 
	 	 	Name:  	Steven Finklea 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Indenture




 









 








RULE 144A/REGULATION S APPENDIX




PROVISIONS RELATING TO INITIAL NOTES

AND EXCHANGE NOTES



1. Definitions





     1.1 Definitions.



     For the purposes of this Appendix the following terms shall have the meanings indicated below:



     “Depository” means The Depository Trust Company, its nominees and their respective successors
and assigns, or such other depository institution hereinafter appointed by the Company.



     “Exchange Notes” means (1) the 8.625% Senior Notes due 2020 issued pursuant to this Indenture
in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2)
Additional Notes, if any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.



     “Initial Notes” means (1) $1,300,000,000 aggregate principal amount of 8.625% Senior Notes due
2020 issued pursuant to this Indenture on the Initial Issuance Date, (2) Additional Notes, if any,
issued in a transaction exempt from the registration requirements of the Securities Act and (3) any
8.625% Senior Notes due 2020 issued pursuant to Section 2.3(b)(ii) in exchange for any Initial
Notes.



     “Initial Purchasers” means (1) with respect to the Initial Notes issued on the Initial
Issuance Date, RBC Capital Markets Corporation, Barclays Capital Inc., BNP Paribas Securities
Corp., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., RBS Securities Inc.,
Wells Fargo Securities, LLC, BMO Capital Markets Corp., Scotia Capital (USA) Inc., UBS Securities
LLC, Comerica Securities, Inc., ING Financial Markets LLC, SG Americas Securities, LLC, U.S.
Bancorp Investments, Inc., BBVA Securities Inc., Capital One Southcoast, Inc., Credit Suisse
Securities (USA) LLC, DnB NOR Markets, Inc., Macquarie Capital (USA) Inc. and Mitsubishi UFJ
Securities (USA), Inc. and (2) with respect to each issuance of Additional Notes, the Persons
purchasing such Additional Notes under the related Purchase Agreement.



     “Notes” means the Initial Notes (including any Additional Notes, if any, issued in a
transaction exempt from the registration requirements of the Securities Act) and the Exchange Notes
(including any Additional Notes, if any, issued pursuant to a registration statement filed with the
SEC under the Securities Act), treated as a single class.



     “Notes Custodian” means the custodian with respect to a Global Note (as appointed by the
Depository), or any successor Person thereto and shall initially be the Trustee.



     “Purchase Agreement” means (1) with respect to the Initial Notes issued on the Initial
Issuance Date, the Purchase Agreement dated March 30, 2010 among the Issuers, the Guarantors and
the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the



App. - 1









 




purchase agreement or underwriting agreement among the Issuers and the Persons purchasing or
underwriting such Additional Notes.




     “Registered Exchange Offer” means the offer by the Issuers, pursuant to a Registration Rights
Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange
for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the
Securities Act.



     “Registration Rights Agreement” means (1) with respect to the Initial Notes issued on the
Initial Issuance Date, the Registration Rights Agreement dated as of April 6, 2010 among the
Issuers, the Guarantors and the Initial Purchasers and (2) 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 Issuers and the Persons
purchasing such Additional Notes under the related Purchase Agreement, in each case, as amended
from time to time.



     “Shelf Registration Statement” means the registration statement issued by the Company in
connection with the offer and sale of Initial Notes pursuant to a Registration Rights Agreement.



     “Transfer Restricted Securities” means Notes that bear or are required to bear the legend set
forth in Section 2.3(b)(i) hereof.



     “Unrestricted Initial Notes” means any Initial Notes that are not Transfer Restricted
Securities.



     1.2 Other Definitions.



	 	 	 	 	 
	Term	 	Defined in Section:
	“Agent Members”

	 	 	2.1	(b)
	“Distribution Compliance Period”

	 	 	2.1	(b)
	“Global Note”

	 	 	2.1	(a)
	“Regulation S”

	 	 	2.1	(a)
	“Regulation S Notes”

	 	 	2.1	(a)
	“Resale Restriction Termination Date”

	 	 	2.3	(b)
	“Restricted
Global Note”

	 	 	2.1	(a)
	“Rule 144A”

	 	 	2.1	(a)
	“Rule 144A Notes”

	 	 	2.1	(a)






2. The Notes.



(a) Form and Dating. Initial Notes offered and sold to QIBs in reliance on Rule 144A
(“Rule 144A Notes”) under the Securities Act (“Rule 144A”) or in reliance on Regulation S
(“Regulation S Notes”) under the Securities Act (“Regulation S”), in each case as provided in a
Purchase Agreement, shall be issued initially in the form of one or more permanent global Notes in
definitive, fully registered form without interest coupons with the global Notes legend and
Restricted Notes legend set forth in Exhibit 1 hereto (each, unless and until becoming an
Unrestricted Initial Note in accordance with Section 2.3(b)(ii) below, a “Restricted Global






App. - 2









 







Note”), which shall be deposited on behalf of the purchasers of the Initial Notes represented
thereby with the Trustee, as custodian for the Depository (or with such other custodian as the
Depository may direct), and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Issuers and authenticated by the Trustee as hereinafter provided.
Beneficial interests in a Restricted Global Note representing Initial Notes sold in reliance on
either Rule 144A or Regulation S may be held through Euroclear or Clearstream, as indirect
participants in the Depository. The aggregate principal amount of the Global Notes may from time
to time be increased or decreased by adjustments made on the records of the Trustee and the
Depository or its nominee as hereinafter provided. Exchange Notes shall be issued in global form
(with the global Notes legend set forth in Exhibit 1 hereto) or in certificated form as provided in
Section 2.4 of this Appendix. Exchange Notes issued in global form, Unrestricted Initial Notes
issued in global form and Restricted Global Notes are sometimes referred to in this Appendix as
“Global Notes.”




     (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note
deposited with or on behalf of the Depository.



     The Issuers shall execute and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Notes that (a) shall be registered in the
name of the Depository for such Global Note or Global Notes or the nominee of such Depository and
(b) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s
instructions or held by the Trustee as custodian for the Depository. If such Global Notes are
Restricted Global Notes, then separate Global Notes shall be issued to represent Rule 144A Notes
and Regulation S Notes so long as required by law or the Depository.



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



     Prior to the expiration of the period through and including the 40th day after the later of
the commencement of the offering of any Initial Notes and the closing of such offering (such
period, the “Restricted Period”), beneficial interests in the Restricted Global Note representing
Regulation S Notes may be exchanged for beneficial interests in the Rule 144A Restricted Global
Note representing Rule 144A Notes only if (i) such exchange occurs in connection with a transfer of
the notes pursuant to Rule 144A, (ii) the transferor first delivers to the Trustee a written
certificate (in the form provided in Exhibit 1 hereto) to the effect that the notes are being
transferred to a Person who the transferor reasonably believes to be a QIB within the meaning of
Rule 144A and is purchasing for its own account or the account of a QIB, in each case in a
transaction meeting the requirements of Rule 144A, and (iii) the transfer is in accordance with all
applicable securities laws of the states of the United States and other jurisdictions. After the



App. - 3









 




expiration of the Restricted Period, such certification requirements shall not apply to such
transfers of beneficial interests in a Restricted Global Note representing Regulation S Notes.




     Beneficial interests in a Restricted Global Note representing Rule 144A Notes may be
transferred to a Person who takes delivery in the form of an interest in the Restricted Global Note
representing Regulation S Notes, whether before or after the expiration of the Restricted Period,
only if the transferor first delivers to the Trustee a written certificate (in the form provided in
Exhibit 1 hereto) to the effect that such transfer is being made in accordance with Rule 903 or 904
of Regulation S or Rule 144 (if available) and that, if such transfer occurs prior to the
expiration of the Restricted Period, the interest transferred will be held immediately thereafter
through Euroclear or Clearstream.



     (c) Certificated Notes. Except as provided in Section 2.3 or 2.4, owners of
beneficial interests in Restricted Global Notes shall not be entitled to receive physical delivery
of certificated Notes. Certificated Notes shall not be exchangeable for beneficial interests in
Global Notes.



     2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the Initial
Issuance Date, an aggregate principal amount of $1,300,000,000 8.625% Senior Notes due 2020, (2) at
any time or from time to time, any Additional Notes for an original issue in an aggregate principal
amount specified in the written order of the Issuers pursuant to Section 2.02 of the Indenture and
(3) at any time or from time to time, Exchange Notes for issue only in a Registered Exchange Offer
pursuant to a Registration Rights Agreement, for a like principal amount of Initial Notes, in each
case upon a written order of the Issuers. Such order (x) shall specify (i) the aggregate principal
amount of the Notes to be authenticated, the date on which such Notes are to be authenticated and
to whom such Notes shall be registered and delivered; (ii) whether such Notes constitute Initial
Notes or Exchange Notes; (iii) whether or not such Notes constitute Additional Notes; and (iv) if
such Notes constitute Additional Notes, the issue price, the issue date (and the corresponding date
from which interest shall accrue thereon and the first interest payment date therefor) and the
CUSIP number and any corresponding ISIN of such Additional Notes and whether such Additional Notes
shall be Transfer Restricted Securities and issued in the form of Initial Notes as set forth in
Exhibit 1 hereto or shall be issued in the form of Exchange Notes as set forth in Exhibit 2 hereto
and (y) in the case of any issuance of Additional Notes pursuant to Section 2.13 of the Indenture,
shall certify that such issuance is in compliance with Section 4.09 of the Indenture. The Trustee
shall also authenticate and deliver Notes at the times and in the manner specified in Sections 2.3
and 2.4 hereof and in Sections 2.06, 2.07, 2.09, 3.06, 4.10, 4.15 or 9.05 of the Indenture.



     2.3 Transfer and Exchange.



     (a) Transfer and Exchange of Global Notes. (i) The transfer and exchange of Global
Notes or beneficial interests therein shall be effected through the Depository, in accordance with
the Indenture (including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note
shall deliver to the Registrar a written order given in accordance with the Depository’s procedures
containing information regarding the participant account of the Depository to be credited with a
beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions



App. - 4









 




instruct the Depository to credit to the account of the Person specified in such instructions
a beneficial interest in the Global Note and to debit the account of the Person making the transfer
the beneficial interest in the Global Note being transferred.





     (ii) Notwithstanding any other provisions of this Appendix, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such successor
Depository.




     (iii) In the event that a Restricted Global Note is exchanged for Notes in certificated
form pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered
Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such
Notes, such Notes may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial Notes intended to ensure
that such transfers comply with Rule 144A or Regulation S, as the case may be) and such
other procedures as may from time to time be adopted by the Company.



     (b) Legend.




     (i) Except as permitted by the following paragraphs (ii), (iii), (iv) and (v), each
Note certificate evidencing the Restricted Global Notes (and all Notes issued in exchange
therefor or in substitution thereof) shall bear a legend in substantially the following
form:




THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER SUCH NOTES NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, 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, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE HOLDER OF ANY NOTE EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF (1)
REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING SUCH NOTE IN AN
“OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT, PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF SUCH NOTE) OR THE LAST DAY ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WERE THE OWNERS OF SUCH NOTE (OR ANY PREDECESSOR OF SUCH
NOTE) (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE TRANSFER SUCH
NOTE EXCEPT (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO



App. - 5









 






LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
(“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A 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 TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO
RULE 144 UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM SUCH NOTE IS TRANSFERRED PRIOR TO THE RESALE RESTRICTION TERMINATION DATE A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) THAT IS (A) PURSUANT TO CLAUSE (2)(D)
PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (B) PURSUANT TO CLAUSE (2)(F) PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING
CASES IN CLAUSES (i)(A) OR (B), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED AS TO ANY NOTE EVIDENCED HEREBY UPON DELIVERY TO THE TRUSTEE BY THE
COMPANY OR THE HOLDER THEREOF OF A WRITTEN REQUEST FOR THE REMOVAL HEREOF, IN ANY CASE AT
ANY TIME AFTER THE RESALE RESTRICTION TERMINATION DATE AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.




     (ii) The Company, acting in its discretion, may remove the legend set forth in
paragraph (i) above from any Transfer Restricted Security at any time on or after the Resale
Restriction Termination Date applicable to such Transfer Restricted Security. Without
limiting the generality of the preceding sentence, the Company may effect such removal by
issuing and delivering, in exchange for such Transfer Restricted Security, an Unrestricted
Initial Note without such legend, registered to the same Holder and in an equal principal
amount, and upon receipt by the Trustee of a written order of the Company stating that the
Resale Restriction Termination Date applicable to such Transfer Restricted Security has
occurred and requesting the authentication and delivery of an Unrestricted Initial Note in
exchange therefor (which order shall not be required to be accompanied by any Opinion of
Counsel or any other document) given at least three Business Days in advance of the proposed
date of exchange specified therein (which shall be no earlier than such Resale Restriction
Termination Date), the Trustee shall authenticate and deliver such Unrestricted Initial Note
to the Depository or pursuant to



App. - 6









 






such Depository’s instructions or hold such Note as Note Custodian for the Depository
and shall request the Depository to, or, if the Trustee is Note Custodian of such Transfer
Restricted Security, shall itself, surrender such Transfer Restricted Security in exchange
for such Unrestricted Initial Note without such legend and thereupon cancel such Transfer
Restricted Security so surrendered, all as directed in such order. For purposes of
determining whether the Resale Restriction Termination Date has occurred with respect to any
Notes evidenced by a Transfer Restricted Security or delivering any order pursuant to this
Section 2.3(b)(ii) with respect to such Notes, (i) only those Notes which a Principal
Officer of the Company actually knows (after reasonable inquiry) to be or to have been owned
by an Affiliate of the Company shall be deemed to be or to have been, respectively, owned by
an Affiliate of the Company; and (ii) “Principal Officer” means the principal executive
officer, the principal financial officer, the treasurer or the principal accounting officer
of the Company.




For purposes of this Section 2.3(b)(ii), all provisions relating to the removal of the
legend set forth in paragraph (i) above shall relate, if the Resale Restriction Termination
Date has occurred only with respect to a portion of the Notes evidenced by a Transfer
Restricted Security, to such portion of the Notes so evidenced as to which the Resale
Restriction Termination Date has occurred.




Each holder of any Note evidenced by any Restricted Global Note, by its acceptance thereof,
(A) authorizes and consents to, (B) appoints the Company as its agent for the sole purpose
of delivering such electronic messages, executing and delivering such instruments and taking
such other actions, on such holder’s behalf, as the Depository or the Trustee may require to
effect, and (C) upon the request of the Company, agrees to deliver such electronic messages,
execute and deliver such instruments and take such other actions as the Depository or the
Trustee may require, or as shall otherwise be necessary to effect, the removal of the legend
set forth in Section 2.3(b)(i) (including by means of the exchange of all or the portion of
such Restricted Global Note evidencing such Note for a certificate evidencing such Note that
does not bear such legend) at any time after the Resale Restriction Termination Date.




     (iii) Upon any sale or transfer of a Transfer Restricted Security (including any
Transfer Restricted Security represented by a Restricted Global Note) pursuant to Rule 144
under the Securities Act, the Registrar shall permit the transferee thereof to exchange such
Transfer Restricted Security for a certificated Note that does not bear the legend set forth
above and rescind any restriction on the transfer of such Transfer Restricted Security, if
the transferor thereof certifies in writing to the Registrar that such sale or transfer was
made in reliance on Rule 144 (such certification to be in the form set forth on the reverse
of the Note).




     (iv) After a transfer of any Initial Notes pursuant to and during the period of the
effectiveness of a Shelf Registration Statement with respect to such Initial Notes, all
requirements pertaining to legends on such Initial Note will cease to apply, the requirement
that any such Initial Note issued to certain Holders be issued in global form will cease to
apply, and a certificated Initial Note or an Initial Note in global form, in each case
without restrictive transfer legends, will be available to the transferee of the



App. - 7









 






Holder of such Initial Notes upon exchange of such transferring Holder’s certificated
Initial Note or directions to transfer such Holder’s interest in the Global Note, as
applicable.




     (v) Upon the consummation of a Registered Exchange Offer with respect to the Initial
Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will still apply with respect to Holders of such
Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated
or global form will be available to Holders that exchange such Initial Notes in such
Registered Exchange Offer.



     (c) Cancellation or Adjustment of Global Note. At such time as all beneficial
interests in a Global Note have either been exchanged for certificated Notes, redeemed, purchased
or canceled, such Global Note shall be returned to the Trustee for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal
amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on
the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with
respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.



     (d) Obligations with Respect to Transfers and Exchanges of Notes.




     (i) To permit registrations of transfers and exchanges, the Issuers shall execute and
the Trustee shall authenticate certificated Notes and Global Notes at the Registrar’s
request.




     (ii) No service charge shall be made for any registration of transfer or exchange, but
the Issuers may require payment of a sum sufficient to cover any transfer tax, assessments
or similar governmental charge payable in connection therewith (other than any such transfer
taxes, assessments or similar governmental charge payable upon any exchange or transfer
pursuant to Sections 3.06, 4.10, 4.15 and 9.05 of the Indenture).




     (iii) The Registrar shall not be required to register the transfer of or exchange of
any Note or portion of a Note selected for redemption, except for the unredeemed portion of
any Note being redeemed in part. Also, it need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be redeemed.




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




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



App. - 8









 






this Indenture as the Notes surrendered upon such transfer or exchange. Accordingly,
for purposes of clause (3) of the second paragraph of Section 4.09 of this Indenture, “the
Notes issued and sold on the Initial Issuance Date” shall be deemed to refer to and include
any Notes issued in exchange for, or upon registration of transfer of, or in lieu of, any
such Notes (or any predecessor Notes thereof) pursuant to Sections 2.3 or 2.4 hereof or
Sections 2.06, 2.07, 2.09, 3.06, 4.10, 4.15 or 9.05 of this Indenture.




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




     (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as
to compliance with any restrictions on transfer imposed under the Indenture or under
Applicable Law with respect to any transfer of any interest in any Note (including any
transfers between or among Depository participants, members or beneficial owners in any
Global Note) other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly required by, the
terms of the Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.



     2.4 Certificated Notes.



     (a) A Global Note deposited with the Depository or with the Trustee as custodian for the
Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the
form of certificated Notes in an aggregate principal amount equal to the principal amount of such
Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and
(i) the Depository notifies the Issuers that it is unwilling or unable to continue as Depository
for such Global Note or if at any time such Depository ceases to be a “clearing agency” registered
under the Exchange Act and in either case a successor depositary is not appointed by the Issuers
within 90 days, (ii) the Issuers, at their option, notify the Trustee in writing that they elect to
cause the issuance of the Certificated Notes, or (iii) an Event of Default has occurred and is
continuing and DTC notifies the Trustee of its decision to exchange the Global Notes.



     (b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this
Section shall be surrendered by the Depository or the Notes Custodian to the Trustee located at its
Corporate Trust Office to be so transferred, in whole or from time to time in part, without



App. - 9









 




charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Note, an equal aggregate principal amount of certificated Notes of authorized
denominations. Any portion of a Global Note transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations equal to $2,000 or an integral multiple
of $1,000 in excess of $2,000, and registered in such names as the Depository shall direct. Any
certificated Note delivered in exchange for an interest in a Global Note shall, except as otherwise
provided by Section 2.3(b), bear the Restricted Notes legend set forth in Exhibit 1 hereto.




     (c) Subject to the provisions of Section 2.4(b), the Holder of a Global Note shall be entitled
to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is entitled to take under
the Indenture or the Notes.



     (d) In the event of the occurrence of any of the events specified in Section 2.4(a), the
Issuers shall promptly make available to the Trustee a reasonable supply of certificated Notes in
definitive, fully registered form without interest coupons.




App. - 10











 





EXHIBIT 1 TO RULE 144A/REGULATION S APPENDIX




[FORM OF FACE OF INITIAL NOTE]




[Global Notes Legend]




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



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



[Restricted Notes Legend]




     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, 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, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING SUCH NOTE IN AN
“OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES
THAT IT WILL NOT, PRIOR TO THE DATE WHICH IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WERE THE OWNERS OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (THE “RESALE
RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE EXCEPT (A) TO AN ISSUER
OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE



Exhibit 1 to App. – 1




 









 







SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A 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 TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) THAT IS (A) PURSUANT TO CLAUSE (2)(D) PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE
PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (B) PURSUANT TO CLAUSE (2)(F)
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE
FOREGOING CASES IN CLAUSES (i)(A) OR (B), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND
WILL BE REMOVED UPON DELIVERY TO THE TRUSTEE BY THE COMPANY OR THE HOLDER THEREOF OF A WRITTEN
REQUEST FOR THE REMOVAL HEREOF, IN ANY CASE AT ANY TIME AFTER THE RESALE RESTRICTION TERMINATION
DATE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.




Exhibit 1 to App. – 2





 









 








LINN ENERGY, LLC




LINN ENERGY FINANCE CORP.




			
	No. [      ]
	 	Principal Amount $[       ]






CUSIP No. [                    ]




ISIN No. [                    ]




8.625% Senior Note due 2020




     Linn Energy, LLC, a Delaware limited liability company, and Linn Energy Finance Corp., a
Delaware corporation, jointly and severally promise to pay to                     , or registered assigns,
the principal sum of
                     Dollars on April 15, 2020 [or such greater or lesser amount as may
be indicated on Schedule A hereto]1.



     Interest Payment Dates: April 15 and October 15



     Record Dates: April 1 and October 1



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



	 	 	 	 	 
	 	Linn Energy, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Linn Energy Finance Corp.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



TRUSTEE’S CERTIFICATE OF

AUTHENTICATION






 




			
	1	 	If this is a Global note, add this provision.





Exhibit 1 to App. – 3




 









 








	 	 	 	 	 
	 	 	U.S. Bank National Association,

as Trustee, certifies that this is one of the

Notes referred to in the Indenture.

 	 	 
	By:  	 	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	Dated: 	 	 	 
	 



Exhibit 1 to App. – 4





 









 








[FORM OF REVERSE SIDE OF INITIAL NOTE]




8.625% Senior Note due 2020





     Capitalized terms used herein but not defined shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.



     1. Interest. Linn Energy, LLC, a Delaware limited liability company (the “Company”),
and Linn Energy Finance Corp., a Delaware corporation (the “Finance Corp.” and, together with the
Company, the “Issuers”), jointly and severally promise to pay interest on the principal amount of
this Note at 8.625% per annum from April 6, 2010 until maturity and shall pay Additional Interest
payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Issuers
will pay interest and Additional Interest, if any, semi-annually in arrears on April 15 and October
15 of each year (each an “Interest Payment Date”), commencing October 15, 2010. If an Interest
Payment Date falls on a day that is not a Business Day, the interest payment to be made on such
Interest Payment Date will be made on the next succeeding Business Day with the same force and
effect as if made on such Interest Payment Date, and no additional interest will accrue solely as a
result of such delayed payment. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of original issuance;
provided that if there is no existing Default or Event of Default in the payment of interest, and
if this Note is authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment
Date, except in the case of the original issuance of Notes, in which case interest shall accrue
from the date of authentication. The Issuers shall pay (i) interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from
time to time on demand at a rate that is 1% higher than the then applicable interest rate on the
Notes and (ii) interest (including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest and Additional Interest (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.



     2. Method of Payment. The Issuers will pay interest on the Notes (except defaulted
interest) and Additional Interest to the Persons who are registered Holders of Notes at the close
of business on the April 1 or October 1 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest Payment Date, except as
provided in Section 2.11 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, together
with accrued and unpaid interest and Additional Interest, if any, due at maturity. The Notes will
be payable as to principal, interest, premium and Additional Interest, if any, at the office or
agency of the Issuers maintained for such purpose within the City and State of New York, or, at the
option of the Issuers, payment of interest and Additional Interest may be made by check mailed to
the Holders at their addresses set forth in the register of Holders, and provided that payment by
wire transfer of immediately available funds will be required with respect to any amounts due on
all Global Notes and all other Notes the Holders of which shall have provided wire transfer
instructions to the Issuers or the Paying Agent. Notwithstanding the foregoing, if this Note is a
Global Note, payment may be made pursuant to the Applicable Procedures of the



Exhibit 1 to App. – 5




 









 







Depository as permitted in the Indenture. Such payment shall 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 Registrar. Initially, U.S. Bank National Association, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may appoint and change
any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.



     4. Indenture. The Issuers issued the Notes under an Indenture dated as of April 6,
2010 (“Indenture”) among the Issuers, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured senior obligations of the Issuers, and the aggregate principal
amount of the Notes is unlimited.



     5. Optional Redemption.



     (a) Except as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Issuers shall
not have the option to redeem the Notes prior to April 15, 2015. On or after April 15, 2015, the
Issuers shall have the option to redeem the Notes, in whole or in part at any time, upon prior
notice as set forth in Paragraph 6, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, on the
Notes redeemed to the applicable redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on an Interest Payment Date that is on or prior to the
redemption date), if redeemed during the twelve-month period beginning on April 15 of the years
indicated below:



	 	 	 	 	 
	YEAR	 	PERCENTAGE	 
	2015
	 	 	104.313	%
	2016
	 	 	102.875	%
	2017
	 	 	101.438	%
	2018 and thereafter
	 	 	100.000	%






     (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior
to April 15, 2013, the Issuers may on one or more occasions redeem up to 35% of the aggregate
principal amount of Notes (including any Additional Notes) issued under the Indenture at a
redemption price of 108.625% of the principal amount thereof, plus accrued and unpaid interest and
Additional Interest, if any, thereon to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest Payment Date that is on
or prior to the redemption date), with the net cash proceeds of one or more Equity Offerings;
provided that, with respect to each such redemption, (i) at least 65% of the aggregate principal
amount of Notes (including any Additional Notes) issued under the Indenture remains outstanding
immediately after the occurrence of such redemption (excluding any Notes held by the Company and
its Subsidiaries) and (ii) such redemption occurs within 180 days of the date of the closing of the
related Equity Offering.



Exhibit 1 to App. – 6




 









 








     (c) Prior to April 15, 2015, the Issuers may redeem on one or more occasions all or part of
the Notes at a redemption price equal to the sum of (1) 100% of the principal amount thereof, plus
(2) accrued and unpaid interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on an interest payment date that is on
or prior to the redemption date), plus (3) the Make Whole Premium at the redemption date.



     6. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not
more than 60 days (except as otherwise provided in the Indenture if the notice is issued in
connection with a Legal Defeasance, Covenant Defeasance or Discharge) before the redemption date to
each Holder whose Notes are to be redeemed at its registered address. If mailed in the manner
provided for in Section 3.03 of the Indenture, the notice of optional redemption shall be
conclusively presumed to have been given whether or not a Holder receives such notice. Failure to
give timely notice or any defect in the notice shall not affect the validity of the redemption.
Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest and Additional Interest, if any, cease to accrue on the Notes or
portions thereof called for redemption. The notice of redemption with respect to a redemption
described in paragraph 5(c) above need not set forth the Make Whole Premium but only the manner of
calculation thereof.



     7. Mandatory Redemption.



     Except as set forth in Paragraph 8 below, neither of the Issuers shall be required to make
mandatory redemption or sinking fund payments with respect to the Notes or to repurchase the Notes
at the option of the Holders.



     8. Repurchase at Option of Holder.



     (a) Within 30 days following the occurrence of a Change of Control, the Company shall make an
offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess of $2,000) of each Holder’s Notes at a purchase price equal to 101% of
the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest and
Additional Interest, if any, to the date of settlement (the “Change of Control Settlement Date”),
subject to the right of Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the Change of Control Settlement Date. Within 30 days
following a Change of Control, the Company shall mail a notice of the Change of Control Offer to
each Holder and the Trustee describing the transaction that constitutes the Change of Control and
setting forth the procedures governing the Change of Control Offer as required by Section 4.15 of
the Indenture.



     (b) On the 366th day after an Asset Sale (or, at the Company’s option, any earlier date), if
the aggregate amount of Excess Proceeds then exceeds $20.0 million, the Company shall commence an
offer to all Holders of Notes (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture,
and to all holders of any Pari Passu Indebtedness then outstanding, to purchase the maximum
principal amount of Notes and such Pari Passu Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal



Exhibit 1 to App. – 7




 









 







amount of the Notes plus accrued and unpaid interest and Additional Interest, if any, thereon
to the date of settlement, subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the date of settlement, in
accordance with the procedures set forth in the Indenture. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such remaining Excess Proceeds for any
purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and
Pari Passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds,
the Trustee shall select the Notes and Pari Passu Indebtedness to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Trustee so that only Notes in
denominations of $2,000, or integral multiples of $1,000 in excess of $2,000, shall be purchased)
on the basis of the aggregate principal amount of tendered Notes and Pari Passu Indebtedness.
Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from
the Company prior to any related purchase date and may elect to have such Notes purchased by
completing the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.




     9. Guarantees. The payment by the Issuers of the principal of and interest, premium
and Additional Interest, if any, on, the Notes is fully and unconditionally guaranteed on a joint
and several senior unsecured basis by each of the Guarantors to the extent set forth in the
Indenture.



     10. 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
Registrar and the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents, and the Company may require a Holder to pay any taxes due on
transfer or exchange. The Issuers need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, they need not exchange or register the transfer of any Notes for a period
of 15 days before a selection of Notes to be redeemed.



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



     12. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or
the Notes may be amended or supplemented with the written consent of the Holders of at least a
majority in principal amount of the then outstanding Notes, and any existing default or compliance
with any provision of the Indenture or the Notes may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Notes. Without the consent of
any Holder of a Note, the Indenture or the Notes may be amended or supplemented (1) to cure any
ambiguity, defect or inconsistency, (2) to provide for uncertificated Notes in addition to or in
place of certificated Notes, (3) to provide for the assumption of an Issuer’s obligations to
Holders of the Notes pursuant to Article 5 of the Indenture, (4) to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that does not adversely
affect the legal rights under the Indenture of any such Holder, provided that any change to conform
the Indenture to the Offering Memorandum shall not be deemed to adversely affect the legal rights
under the Indenture of any Holder, (5) to secure the Notes or the



Exhibit 1 to App. – 8




 









 







Subsidiary Guarantees pursuant to Section 4.12 of the Indenture or otherwise, (6) to provide
for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture,
(7) to add any additional Guarantor with respect to the Notes or to evidence the release of any
Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, (8) to comply
with the requirements of the SEC in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act, (9) to evidence or provide for the acceptance of appointment under
the Indenture of a successor Trustee or (10) to conform the text of the Indenture, the Subsidiary
Guarantees or the Notes to any provision described in the “Description of Notes” contained in the
Offering Memorandum.




     13. Defaults and Remedies. Events of Default include: (i) default for 30 days in the
payment when due of interest or Additional Interest, if any, on the Notes; (ii) default in payment
when due of the principal of or premium, if any, on the Notes when due at their Stated Maturity,
upon optional redemption, upon required repurchase, upon acceleration or otherwise; (iii) failure
by the Company to comply with Section 5.01 of the Indenture or to consummate a purchase of Notes
when required pursuant to the provisions of Section 3.09, 4.10 or 4.15 of the Indenture; (iv)
failure by the Company for 90 days after notice from the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to comply with Section 4.03 of the Indenture; (v)
failure by the Company for 60 days after notice from the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to comply with any of its other agreements in the
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), whether such Indebtedness or guarantee now exists
or is created after the Initial Issuance Date, if such 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 any
grace period provided in such Indebtedness (a “Payment Default”) or (b) results in the acceleration
of such Indebtedness prior to its Stated 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 $40.0
million or more; provided that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 30 days from the expiration of the
applicable grace period or the occurrence of such acceleration, as the case may be, such Event of
Default and any consequential acceleration of the Notes shall be automatically rescinded, so long
as such rescission does not conflict with any judgment or decree; (vii) failure by the Company or
any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $40.0 million
(to the extent not covered by insurance by a reputable and creditworthy insurer as to which the
insurer has not disclaimed coverage), which judgments are not paid, discharged or stayed for a
period of 60 consecutive days; (viii)(a) any Subsidiary Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect
or (b) any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its
obligations under its Subsidiary Guarantee, except in each case, by reason of the release of such
Subsidiary Guarantee in accordance with the provisions of the Indenture; and (ix) certain events of
bankruptcy, insolvency or reorganization with respect to the Company, Finance Corp., any of the
Company’s Restricted Subsidiaries that is a Significant Subsidiary of the Company or any group of
Restricted Subsidiaries of the Company that, taken together, would constitute a Significant



Exhibit 1 to App. – 9




 









 







Subsidiary of the Company as specified in Section 6.01(i) or 6.01(j) of the Indenture. If any
Event of Default occurs and is continuing, the Trustee, by notice to the Issuers, or the Holders of
at least 25% in principal amount of the then outstanding Notes, by notice to the Issuers and the
Trustee, may declare all the Notes to be due and payable immediately. Notwithstanding the
preceding, in the case of an Event of Default arising from such events of bankruptcy, insolvency or
reorganization described in Section 6.01(i) or 6.01(j) of the Indenture, all outstanding Notes will
become due and payable immediately without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in
its exercise of any trust or power conferred on it. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal, interest, premium or Additional Interest) if a committee of
Responsible Officers in good faith determines that withholding notice is in their interests. The
Holders of a majority in principal amount of the Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all the Notes rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing Events of Default
(except with respect to nonpayment of principal, interest, premium, or Additional Interest, if any,
that have become due solely because of the acceleration) have been cured or waived. The Holders of
a majority in 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
the principal of, or interest, premium, or Additional Interest, if any, on, the Notes. The Issuers
are required to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and, so long as any Notes are outstanding, the Issuers are required upon any of their
respective Officers becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.




     14. Defeasance and Discharge. The Notes are subject to defeasance and discharge upon
the terms and conditions specified in the Indenture.



     15. No Recourse Against Others. No past, present or future director, officer,
partner, employee, incorporator, manager or unitholder or other owner of Capital Stock of the
Issuers or any Guarantor, as such, shall have any liability for any obligations of the Issuers or
any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of the consideration
for the issuance of the Notes.



     16. Authentication. This Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee or an authenticating agent.



     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).



Exhibit 1 to App. – 10





 









 








     18. Removal of Restricted Notes Legend. Each holder of any Note evidenced by any
Restricted Global Note, by its acceptance thereof, (A) authorizes and consents to, (B) appoints the
Company as its agent for the sole purpose of delivering such electronic messages, executing and
delivering such instruments and taking such other actions, on such holder’s behalf, as the
Depository or the Trustee may require to effect, and (C) upon the request of the Company, agrees to
deliver such electronic messages, execute and deliver such instruments and take such other actions
as the Depository or the Trustee may require, or as shall otherwise be necessary to effect, the
removal of the Restricted Notes Legend set forth on the face of such Note (including by means of
the exchange of all or the portion of such Restricted Global Note evidencing such Note for a
certificate evidencing such Note that does not bear such Restricted Notes Legend) at any time after
the Resale Restriction Termination Date.



     19. Additional Rights of Holders of Transfer Restricted Securities. In addition to
the rights provided to Holders of the Notes under the Indenture, Holders of Transfer Restricted
Securities shall have all the rights set forth in the Registration Rights Agreement dated as of
April 6, 2010, among the Issuers, the Guarantors and the Initial Purchasers (the “Registration
Rights Agreement”).



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



     21. Governing Law. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



     22. Successors. In the event a successor assumes all the obligations of an Issuer
under the Notes and the Indenture, pursuant to the terms thereof, such Issuer will be released from
all such obligations.



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


Linn Energy, LLC

600 Travis, Suite 5100

Houston, Texas 77002

Attention: Investor Relations




Exhibit 1 to App. – 11




 









 








ASSIGNMENT FORM




     To assign this Note, fill in the form below:



     I or we assign and transfer this Note to



      



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




      



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



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




	 	 	 	 	 	 	 

	Date:

	 	 	 	Your Signature:	 	 
	 

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





Signature Guarantee:




	 	 	 
	 

(Signature must be guaranteed)

	 	 





Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.




 





[Include the following only if the Restricted Notes Legend is included hereon]



[In connection with any transfer of any of the Notes evidenced by this certificate occurring prior
to one year after the later of the date of original issuance of such Notes and the last date, if
any, on which such Notes were owned by the Company or any Affiliate of the Company (or, in the case
of Regulation S Notes, prior to the expiration of the Distribution Compliance Period), the
undersigned confirms that such Notes are being transferred in accordance with their terms:



CHECK ONE BOX BELOW




	 	 	 	 	 	 	 	 	 

	 

	 	 	(1	)	 	 ̈
	 	to an Issuer or any Subsidiary thereof; or
	 
	 	 	 	 	 	 	 	 
	 

	 	 	(2	)	 	 ̈
	 	pursuant to an effective registration statement under the Securities
Act of 1933; or






Exhibit 1 to App. – 12




 









 








	 	 	 	 	 	 	 	 	 

	 

	 	 	(3	)	 	 ̈
	 	to a person who the undersigned reasonably believes is a “qualified
institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that is
purchasing for its own account or for the account of a qualified institutional buyer to
whom notice is given that such transfer is being made in reliance on Rule 144A, in each
case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
	 
	 	 	 	 	 	 	 	 
	 

	 	 	(4	)	 	 ̈
	 	pursuant to offers and sales to non-U.S. persons that occur outside the
United States within the meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
	 
	 	 	 	 	 	 	 	 
	 

	 	 	(5	)	 	 ̈
	 	pursuant to Rule 144 under the Securities Act of 1933; or
	 
	 	 	 	 	 	 	 	 
	 

	 	 	(6	)	 	 ̈
	 	pursuant to another exemption from registration under the Securities
Act of 1933.





Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced
by this certificate in the name of any person other than the registered holder thereof;
provided, however, that if box (4) or (6) is checked, the Trustee shall be entitled
to require, prior to registering any such transfer of the Notes, such legal opinions,
certifications and other information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.




	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Signature 	 
	 	 	 	 
	 



Exhibit 1 to App. – 13




 









 







TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.



The undersigned represents and warrants that it is purchasing this Note for its own account or an
account with respect to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuers and any Guarantors as the
undersigned has requested pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by Rule 144A.




	 	 	 	 	 

	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Notice: To be executed by an executive officer






Exhibit 1 to App. – 14




 









 








OPTION OF HOLDER TO ELECT PURCHASE




     If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or
4.15 of the Indenture, check the box below:



 ̈      Section 4.10            ̈      Section 4.15




     If you want to elect to have only part of this Note purchased by the Company pursuant to
Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $2,000
or integral multiples of $1,000 in excess of $2,000) you elect to have purchased: $                    



	 	 	 	 	 

	Date:

	 	Your Signature	 	 
	 

	 	 	 	 
	 

	 	 	 	(Sign exactly as your name appears on the other side of this Note)
	 
	 	 	 	 
	 	 	Soc. Sec. or Tax Identification No.:                                                                      
          






	 	 	 	 	 

	Signature Guarantee:
	 	 	 	 
	 

	 	 

(signature must be guaranteed)
	 	 






     Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as
may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.



Exhibit 1 to App. – 15




 









 








[TO BE ATTACHED TO GLOBAL NOTE]




SCHEDULE A




SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE




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



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Principal Amount of	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	this Global Note	 	Signature of
	 	 	 	 	Amount of decrease	 	Amount of increase	 	following such	 	authorized officer
	 	 	 	 	in Principal Amount	 	in Principal Amount	 	decrease or	 	of Trustee or Notes
	Date	 	of this Global Note	 	of this Global Note	 	increase	 	Custodian





Exhibit 1 to App. – 16





 









 








EXHIBIT 2 TO RULE 144A/REGULATION S APPENDIX




[FORM OF FACE OF EXCHANGE NOTE]*/



*/ If the Note is to be issued in global form, add the Global Notes Legend from Exhibit 1 to Rule
144A/Regulation S Appendix and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO
GLOBAL NOTES] — SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE.”



All references to “Additional Interest” in the Note shall be deleted unless if, at the date of
issuance of the Exchange Note, any Registration Default (as defined in the Registration Rights
Agreement) has occurred with respect to the related Initial Notes during the interest period in
which such date of issuance occurs.




Exhibit 2 to App. – 1





 











 





[FORM OF FACE OF EXCHANGE NOTE]




LINN ENERGY, LLC



LINN ENERGY FINANCE CORP.



	 	 	 	 	 

	No. [     ]

	 	 	$	 






CUSIP No. [                    ]




ISIN No. [                    ]




8.625% Senior Note due 2020



     Linn Energy, LLC, a Delaware limited liability company, and Linn Energy Finance Corp., a
Delaware corporation, jointly and severally promise to pay to                     , or registered assigns,
the principal sum of                      Dollars on April 15, 2020 [or such greater or lesser amount as may
be indicated on Schedule A hereto].2



     Interest Payment Dates: April 15 and October 15



     Record Dates: April 1 and October 1



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



	 	 	 	 	 
	 	Linn Energy, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	 	Linn Energy Finance Corp.

 	 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



TRUSTEE’S CERTIFICATE OF

AUTHENTICATION






 




			
	2	 	If this Note is a Global Note, add this provision.




Exhibit 2 to App. - 2 









 









U.S. Bank National Association,

as Trustee, certifies that this is one of the

Notes referred to in the Indenture.




	 	 	 	 	 
	 	 
	By:  	 	 
	 	Authorized Signatory 	 
	 	 	 	 
	 


Dated:






Exhibit 2 to App. - 3 









 








[FORM OF REVERSE SIDE OF EXCHANGE NOTE]




8.625% Senior Note due 2020




     Capitalized terms used herein but not defined shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.



     1. Interest. Linn Energy, LLC, a Delaware limited liability company (the “Company”),
and Linn Energy Finance Corp., a Delaware corporation (the “Finance Corp.” and, together with the
Company, the “Issuers”), jointly and severally promise to pay interest on the principal amount of
this Note at 8.625% per annum from April 6, 2010 until maturity and shall pay Additional Interest
payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Issuers
will pay interest and Additional Interest, if any, semi-annually in arrears on April 15 and October
15 of each year (each an “Interest Payment Date”), commencing October 15, 2010. If an Interest
Payment Date falls on a day that is not a Business Day, the interest payment to be made on such
Interest Payment Date will be made on the next succeeding Business Day with the same force and
effect as if made on such Interest Payment Date, and no additional interest will accrue solely as a
result of such delayed payment. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of original issuance;
provided that if there is no existing Default or Event of Default in the payment of interest, and
if this Note is authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment
Date, except in the case of the original issuance of Notes, in which case interest shall accrue
from the date of authentication. The Issuers shall pay (i) interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from
time to time on demand at a rate that is 1% higher than the then applicable interest rate on the
Notes and (ii) interest (including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest and Additional Interest (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.



     2. Method of Payment. The Issuers will pay interest on the Notes (except defaulted
interest) and Additional Interest to the Persons who are registered Holders of Notes at the close
of business on the April 1 or October 1 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest Payment Date, except as
provided in Section 2.11 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, together
with accrued and unpaid interest and Additional Interest, if any, due at maturity. The Notes will
be payable as to principal, interest, premium and Additional Interest, if any, at the office or
agency of the Issuers maintained for such purpose within the City and State of New York, or, at the
option of the Issuers, payment of interest and Additional Interest may be made by check mailed to
the Holders at their addresses set forth in the register of Holders, and provided that payment by
wire transfer of immediately available funds will be required with respect to any amounts due on
all Global Notes and all other Notes the Holders of which shall have provided wire transfer
instructions to the Issuers or the Paying Agent. Notwithstanding the foregoing, if this Note is a
Global Note, payment may be made pursuant to the Applicable Procedures of the



Exhibit 2 to App. - 4 









 




Depository as permitted in the Indenture. Such payment shall 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 Registrar. Initially, U.S. Bank National Association, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may appoint and change
any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.



     4. Indenture. The Issuers issued the Notes under an Indenture dated as of April 6,
2010 (“Indenture”) among the Issuers, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured senior obligations of the Issuers, and the aggregate principal
amount of the Notes is unlimited.



     5. Optional Redemption.



     (a) Except as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Issuers shall
not have the option to redeem the Notes prior to April 15, 2015. On or after April 15, 2015, the
Issuers shall have the option to redeem the Notes, in whole or in part at any time, upon prior
notice as set forth in Paragraph 6, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, on the
Notes redeemed to the applicable redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on an Interest Payment Date that is on or prior to the
redemption date), if redeemed during the twelve-month period beginning on April 15 of the years
indicated below:



	 	 	 	 	 
	YEAR	 	PERCENTAGE
	2015
	 	 	104.313	%
	2016
	 	 	102.875	%
	2017
	 	 	101.438	%
	2018 and thereafter
	 	 	100.000	%






     (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior
to April 15, 2013, the Issuers may on one or more occasions redeem up to 35% of the aggregate
principal amount of Notes (including any Additional Notes) issued under the Indenture at a
redemption price of 108.625% of the principal amount thereof, plus accrued and unpaid interest and
Additional Interest, if any, thereon to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest Payment Date that is on
or prior to the redemption date), with the net cash proceeds of one or more Equity Offerings;
provided that, with respect to each such redemption, (i) at least 65% of the aggregate principal
amount of Notes (including any Additional Notes) issued under the Indenture remains outstanding
immediately after the occurrence of such redemption (excluding any Notes held by the Company and
its Subsidiaries) and (ii) such redemption occurs within 180 days of the date of the closing of the
related Equity Offering.



Exhibit 2 to App. - 5 









 





     (c) Prior to April 15, 2015, the Issuers may redeem on one or more occasions all or part of
the Notes at a redemption price equal to the sum of (1) 100% of the principal amount thereof, plus
(2) accrued and unpaid interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on an interest payment date that is on
or prior to the redemption date), plus (3) the Make Whole Premium at the redemption date.



     6. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not
more than 60 days (except as otherwise provided in the Indenture if the notice is issued in
connection with a Legal Defeasance, Covenant, Defeasance or Discharge) before the redemption date
to each Holder whose Notes are to be redeemed at its registered address. If mailed in the manner
provided for in Section 3.03 of the Indenture, the notice of optional redemption shall be
conclusively presumed to have been given whether or not a Holder receives such notice. Failure to
give timely notice or any defect in the notice shall not affect the validity of the redemption.
Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000 in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest and Additional Interest, if any, cease to accrue on the Notes or
portions thereof called for redemption. The notice of redemption with respect to a redemption
described in paragraph 5(c) above need not set forth the Make Whole Premium but only the manner of
calculation thereof.



     7. Mandatory Redemption. Except as set forth in Paragraph 8 below, neither of the
Issuers shall be required to make mandatory redemption or sinking fund payments with respect to the
Notes or to repurchase the Notes at the option of the Holders.



     8. Repurchase at Option of Holder.



     (a) Within 30 days following the occurrence of a Change of Control, the Company shall make an
offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess of $2,000) of each Holder’s Notes at a purchase price equal to 101% of
the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest and
Additional Interest, if any, to the date of settlement (the “Change of Control Settlement Date”),
subject to the right of Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the Change of Control Settlement Date. Within 30 days
following a Change of Control, the Company shall mail a notice of the Change of Control Offer to
each Holder and the Trustee describing the transaction that constitutes the Change of Control and
setting forth the procedures governing the Change of Control Offer as required by Section 4.15 of
the Indenture:



     (b) On the 366th day after an Asset Sale (or, at the Company’s option, any earlier date), if
the aggregate amount of Excess Proceeds then exceeds $20.0 million, the Company shall commence an
offer to all Holders of Notes (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture,
and to all holders of any Pari Passu Indebtedness then outstanding, to purchase the maximum
principal amount of Notes and such Pari Passu Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes
plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of
settlement, subject to the right of Holders of record on the relevant record date to



Exhibit 2 to App. - 6 









 




receive interest due on an Interest Payment Date that is on or prior to the date of
settlement, in accordance with the procedures set forth in the Indenture. If any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use such remaining Excess
Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal
amount of Notes and Pari Passu Indebtedness tendered into such Asset Sale Offer exceeds the amount
of Excess Proceeds, the Trustee shall select the Notes and Pari Passu Indebtedness to be purchased
on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only
Notes in denominations of $2,000, or integral multiples of $1,000 in excess of $2,000, shall be
purchased) on the basis of the aggregate principal amount of tendered Notes and Pari Passu
Indebtedness. Holders of Notes that are the subject of an offer to purchase will receive an Asset
Sale Offer from the Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled “Option of Holder to Elect Purchase” on the reverse of
the Notes.




     9. Guarantees. The payment by the Issuers of the principal of and interest, premium
and Additional Interest, if any, on, the Notes is fully and unconditionally guaranteed on a joint
and several senior unsecured basis by each of the Guarantors to the extent set forth in the
Indenture.



     10. 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
Registrar and the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents, and the Company may require a Holder to pay any taxes due on
transfer or exchange. The Issuers need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, they need not exchange or register the transfer of any Notes for a period
of 15 days before a selection of Notes to be redeemed.



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



     12. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or
the Notes may be amended or supplemented with the written consent of the Holders of at least a
majority in principal amount of the then outstanding Notes, and any existing default or compliance
with any provision of the Indenture or the Notes may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Notes. Without the consent of
any Holder of a Note, the Indenture or the Notes may be amended or supplemented (1) to cure any
ambiguity, defect or inconsistency, (2) to provide for uncertificated Notes in addition to or in
place of certificated Notes, (3) to provide for the assumption of an Issuer’s obligations to
Holders of the Notes pursuant to Article 5 of the Indenture, (4) to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that does not adversely
affect the legal rights under the Indenture of any such Holder, provided that any change to conform
the Indenture to the Offering Memorandum shall not be deemed to adversely affect the legal rights
under the Indenture of any Holder, (5) to secure the Notes or the Subsidiary Guarantees pursuant to
Section 4.12 of the Indenture or otherwise, (6) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in the Indenture, (7)



Exhibit 2 to App. - 7 









 




to add any additional Guarantor with respect to the Notes or to evidence the release of any
Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, (8) to comply
with the requirements of the SEC in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act, (9) to evidence or provide for the acceptance of appointment under
the Indenture of a successor Trustee or (10) to conform the text of the Indenture, the Subsidiary
Guarantees or the Notes to any provision described in the “Description of Notes” contained in the
Offering Memorandum.




     13. Defaults and Remedies. Events of Default include: (i) default for 30 days in the
payment when due of interest or Additional Interest, if any, on the Notes; (ii) default in payment
when due of the principal of or premium, if any, on the Notes when due at their Stated Maturity,
upon optional redemption, upon required repurchase, upon acceleration or otherwise; (iii) failure
by the Company to comply with Section 5.01 of the Indenture or to consummate a purchase of Notes
when required pursuant to the provisions of Section 3.09, 4.10 or 4.15 of the Indenture; (iv)
failure by the Company for 90 days after notice from the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to comply with Section 4.03 of the Indenture; (v)
failure by the Company for 60 days after notice from the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to comply with any of its other agreements in the
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), whether such Indebtedness or guarantee now exists
or is created after the Initial Issuance Date, if such 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 any
grace period provided in such Indebtedness (a “Payment Default”) or (b) results in the acceleration
of such Indebtedness prior to its Stated 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 $40.0
million or more; provided that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 30 days from the expiration of the
applicable grace period or the occurrence of such acceleration, as the case may be, such Event of
Default and any consequential acceleration of the Notes shall be automatically rescinded, so long
as such rescission does not conflict with any judgment or decree; (vii) failure by the Company or
any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $40.0 million
(to the extent not covered by insurance by a reputable and creditworthy insurer as to which the
insurer has not disclaimed coverage), which judgments are not paid, discharged or stayed for a
period of 60 consecutive days; (viii) (a) any Subsidiary Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect
or (b) any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its
obligations under its Subsidiary Guarantee, except in each case, by reason of the release of such
Subsidiary Guarantee in accordance with the provisions of the Indenture; and (ix) certain events of
bankruptcy, insolvency or reorganization with respect to the Company, Finance Corp., any of the
Company’s Restricted Subsidiaries that is a Significant Subsidiary of the Company or any group of
Restricted Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary of the Company as specified in Section 6.01(i) or 6.01(j) of the Indenture. If any
Event of Default occurs and is continuing, the Trustee, by notice to the Issuers, or the Holders of



Exhibit 2 to App. - 8 









 




at least 25% in principal amount of the then outstanding Notes, by notice to the Issuers and
the Trustee, may declare all the Notes to be due and payable immediately. Notwithstanding the
preceding, in the case of an Event of Default arising from such events of bankruptcy, insolvency or
reorganization described in Section 6.01(i) or 6.01(j) of the Indenture, all outstanding Notes will
become due and payable immediately without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in
its exercise of any trust or power conferred on it. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal, interest, premium or Additional Interest) if a committee of
Responsible Officers in good faith determines that withholding notice is in their interests. The
Holders of a majority in principal amount of the Notes then outstanding by notice to the Trustee
may on behalf of the Holders of all the Notes rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing Events of Default
(except with respect to nonpayment of principal, interest, premium, or Additional Interest, if any,
that have become due solely because of the acceleration) have been cured or waived. The Holders of
a majority in 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
the principal of, or interest, premium, or Additional Interest, if any, on, the Notes. The Issuers
are required to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and, so long as any Notes are outstanding, the Issuers are required upon any of their
respective Officers becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.




     14. Defeasance and Discharge. The Notes are subject to defeasance and discharge upon
the terms and conditions specified in the Indenture.



     15. No Recourse Against Others. No past, present or future director, officer,
partner, employee, incorporator, manager or unitholder or other owner of Capital Stock of the
Issuers or any Guarantor, as such, shall have any liability for any obligations of the Issuers or
any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of the consideration
for the issuance of the Notes.



     16. Authentication. This Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee or an authenticating agent.



     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. Removal of Restricted Notes Legend. Each holder of any Note evidenced by any
Restricted Global Note, by its acceptance thereof, (A) authorizes and consents to, (B) appoints the
Company as its agent for the sole purpose of delivering such electronic messages, executing



Exhibit 2 to App. - 9 









 




and delivering such instruments and taking such other actions, on such holder’s behalf, as the
Depository or the Trustee may require to effect, and (C) upon the request of the Company, agrees to
deliver such electronic messages, execute and deliver such instruments and take such other actions
as the Depository or the Trustee may require, or as shall otherwise be necessary to effect, the
removal of the Restricted Notes Legend set forth on the face of such Note (including by means of
the exchange of all or the portion of such Restricted Global Note evidencing such Note for a
certificate evidencing such Note that does not bear such Restricted Notes Legend) at any time after
the Resale Restriction Termination Date.




     19. [Additional Rights of Holders of Transfer Restricted Securities. In addition to
the rights provided to Holders of the Notes under the Indenture, Holders of Transfer Restricted
Securities shall have all the rights set forth in the Registration Rights Agreement dated as of
April 6, 2010, among the Issuers, the Guarantors and the Initial Purchasers (the “Registration
Rights Agreement”).]3



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



     21. Governing Law. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



     22. Successors. In the event a successor assumes all the obligations of an Issuer
under the Notes and the Indenture, pursuant to the terms thereof, such Issuer will be released from
all such obligations.



     The Company will furnish to any Holder upon written request and without charge a copy of the
Indenture [or any Registration Rights Agreement].4 Requests may be made to:


Linn Energy, LLC

600 Travis, Suite 5100

Houston, Texas 77002

Attention: Investor Relations






 




			
	3	 	Delete if this Note is not being issued in
exchange for an Initial Note.
	 
	4	 	Delete if this Note is not being issued in
exchange for an Initial Note.




Exhibit 2 to App. - 10 









 










ASSIGNMENT FORM




     To assign this Note, fill in the form below:



     I or we assign and transfer this Note to



 

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



 

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


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




	 	 	 	 	 	 	 

	Date:

	 	 	 	Your Signature:	 	 
	 

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





Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.







Exhibit 2 to App. - 11 









 








OPTION OF HOLDER TO ELECT PURCHASE




     If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or
4.15 of the Indenture, check the box below:



	 	 	 

	o Section 4.10
	 	o Section 4.15






     If you want to elect to have only part of this Note purchased by the Company pursuant to
Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $2,000
or integral multiples of $1,000 in excess of $2,000) you elect to have purchased: $                    





	 	 	 	 	 	 	 

	Date:

	 	 	 	Your Signature	 	 
	 

	 	 	 	 	 	 
	 

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








	 	 	 	 	 	 	 

	 

	 	 	 	Soc. Sec. or Tax Identification No.:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 








     



	 	 	 	 	 
	 	 
	Signature Guarantee:  	 	 
	 	(signature must be guaranteed) 	 
	 	 	 
	 




     Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as
may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.




Exhibit 2 to App. - 12 











 







ANNEX A



 




LINN ENERGY, LLC




LINN ENERGY FINANCE CORP.



and



the Guarantors named herein



 





8.625% SENIOR NOTES DUE 2020



 





FORM OF SUPPLEMENTAL INDENTURE




DATED AS OF                     ,                     



 





U.S. BANK NATIONAL ASSOCIATION,



As Trustee



 






 




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     This SUPPLEMENTAL INDENTURE, dated as of                                         ,                      (this “Supplemental Indenture”)
is among Linn Energy, LLC, a Delaware limited liability company (the “Company”), Linn Energy
Finance Corp., a Delaware corporation ( “Finance Corp.” and, together with the Company, the
“Issuers”), [                                        ] (the “Guaranteeing Subsidiary”), which is a subsidiary of the Company,
each of the existing Guarantors (as defined in the Indenture referred to below) and U.S. Bank
National Association, a national banking association, as Trustee.



RECITALS




     WHEREAS, the Issuers, the initial Guarantors and the Trustee entered into an Indenture, dated
as of April 6, 2010 (as heretofore amended, supplemented or otherwise modified, the “Indenture”),
pursuant to which the Company has issued $1,300,000,000 in principal amount of 8.625% Senior Notes
due 2020 (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 Guarantor (as defined in the Indenture);



     WHEREAS, Section 9.01(g) of the Indenture provides that the Issuers, the Guarantors and the
Trustee may amend or supplement the Indenture in order to add any additional Guarantor with respect
to the Notes, without the consent of the Holders of the Notes; and



     WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of
Incorporation and the Bylaws (or comparable constituent documents) of the Issuers, of the
Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument
legally binding on the Issuers, the Guarantors and the Trustee, in accordance with its terms, have
been duly done and performed;



     NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the
above premises, the Issuers, the Guaranteeing Subsidiary, the other Guarantors and the Trustee
covenant and agree for the equal and proportionate benefit of the respective Holders of the Notes
as follows:



     Section 1. Capitalized Terms. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Indenture.



     Section 2. Relation to Indenture. This Supplemental Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall be construed in connection with
and as part of, the Indenture for any and all purposes.



     Section 3. Effectiveness of Supplemental Indenture. This Supplemental Indenture shall
become effective immediately upon its execution and delivery by each of the Issuers, the
Guaranteeing Subsidiary, the other Guarantors and the Trustee.



     Section 4. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees, by its
execution of this Supplemental Indenture, to be bound by the provisions of the Indenture applicable
to Guarantors to the extent provided for in Article 10 thereof.



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     Section 5. Ratification of Obligations. Except as specifically modified herein, the
Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall
remain in full force and effect in accordance with their terms.



     Section 6. The Trustee. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the
Trustee subject to all the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made applicable to the
Trustee with respect hereto.



     Section 7. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



     Section 8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies
together shall represent the same agreement.



[Signatures on following pages]




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



	 	 	 	 	 
	 	Issuers





Linn Energy, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Linn Energy Finance Corp.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Guaranteeing Subsidiary




[                                        ]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Existing Guarantors1






Trustee



U.S. Bank National Association, as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 




			
	1 	 	
 Insert signature blocks for each of the Guarantors existing at the time of execution
of this Supplemental Indenture.






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