Exhibit 4.1


                                KCS ENERGY, INC.

                          7 1/8 % Senior Notes due 2012





                                    INDENTURE

                            Dated as of April 1, 2004




                         U.S. BANK NATIONAL ASSOCIATION,

                                   as Trustee






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                                TABLE OF CONTENTS


                                    ARTICLE I

              DEFINITIONS AND INCORPORATION BY REFERENCE

<S>     <C>                                                                                        <C>
Section 1.1        Definitions......................................................................1
Section 1.2        Other Definitions...............................................................30
Section 1.3        Incorporation by Reference of Trust Indenture Act...............................31
Section 1.4        Rules of Construction...........................................................31

                                   ARTICLE II

                                 THE SECURITIES

Section 2.1        Form and Dating.................................................................32
Section 2.2        Execution and Authentication....................................................33
Section 2.3        Registrar and Paying Agent......................................................34
Section 2.4        Paying Agent To Hold Money in Trust.............................................35
Section 2.5        Holder Lists....................................................................35
Section 2.6        Transfer and Exchange...........................................................35
Section 2.7        Replacement Securities..........................................................49
Section 2.8        Outstanding Securities..........................................................49
Section 2.9        Temporary Securities............................................................50
Section 2.10       Cancellation....................................................................50
Section 2.11       Defaulted Interest..............................................................50
Section 2.12       CUSIP Numbers...................................................................51

                                   ARTICLE III

                                   REDEMPTION

Section 3.1        Notices to Trustee..............................................................51
Section 3.2        Selection of Securities To Be Redeemed..........................................51
Section 3.3        Notice of Redemption............................................................52
Section 3.4        Effect of Notice of Redemption..................................................52
Section 3.5        Deposit of Redemption Price.....................................................53
Section 3.6        Securities Redeemed in Part.....................................................53
Section 3.7        Optional Redemption.............................................................53

                                   ARTICLE IV

                                    COVENANTS

Section 4.1        Payment of Securities...........................................................54
Section 4.2        SEC Reports.....................................................................54
Section 4.3        Incurrence of Indebtedness......................................................55
Section 4.4        Restricted Payments.............................................................58
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<S>     <C>                                                                                       <C>
Section 4.5        Liens...........................................................................62
Section 4.6        Dividend and Other Payment Restrictions Affecting Subsidiaries..................62
Section 4.7        Asset Sales.....................................................................64
Section 4.8        Transactions With Affiliates....................................................66
Section 4.9        Additional Subsidiary Guarantees................................................67
Section 4.10       Business Activities.............................................................68
Section 4.11       Change of Control...............................................................68
Section 4.12       Maintenance of Office or Agency for Registration of Transfer, Exchange and
                      Payment of Securities........................................................69
Section 4.13       Appointment to Fill a Vacancy in the Office of Trustee..........................70
Section 4.14       Provision as to Paying Agent....................................................70
Section 4.15       Maintenance of Corporate Existence..............................................71
Section 4.16       Compliance Certificate..........................................................71
Section 4.17       Taxes...........................................................................72
Section 4.18       Stay, Extension and Usury Laws..................................................72

                                    ARTICLE V

                                SUCCESSOR COMPANY

Section 5.1        Merger, Consolidation or Sale of Assets.........................................72

                                   ARTICLE VI

                              DEFAULTS AND REMEDIES

Section 6.1        Events of Default...............................................................73
Section 6.2        Acceleration of Maturity; Rescission and Annulment..............................75
Section 6.3        Other Remedies..................................................................76
Section 6.4        Waiver of Past Defaults.........................................................76
Section 6.5        Control by Majority.............................................................76
Section 6.6        Limitation on Suits.............................................................76
Section 6.7        Rights of Holders to Receive Payment............................................77
Section 6.8        Collection Suit by Trustee......................................................77
Section 6.9        Trustee May File Proofs of Claim................................................77
Section 6.10       Priorities......................................................................77
Section 6.11       Undertaking for Costs...........................................................78

                                   ARTICLE VII

                                     TRUSTEE

Section 7.1        Duties of Trustee...............................................................78
Section 7.2        Rights of Trustee...............................................................79
Section 7.3        Individual Rights of Trustee....................................................80
Section 7.4        Trustee's Disclaimer............................................................80
Section 7.5        Notice of Defaults..............................................................80
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<S>     <C>                                                                                       <C>
Section 7.6        Reports by Trustee to Holders...................................................80
Section 7.7        Compensation and Indemnity......................................................81
Section 7.8        Replacement of Trustee..........................................................81
Section 7.9        Successor Trustee by Merger.....................................................82
Section 7.10       Eligibility; Disqualification...................................................83
Section 7.11       Preferential Collection of Claims Against Company...............................83

                             Article VIII

                  Discharge of Indenture; Defeasance

Section 8.1        Discharge of Liability on Securities; Defeasance................................83
Section 8.2        Conditions to Defeasance........................................................85
Section 8.3        Delivery and Application of Trust Money.........................................86
Section 8.4        Repayment to Company............................................................86
Section 8.5        Indemnity for Government Securities.............................................86
Section 8.6        Reinstatement...................................................................86

                                   ARTICLE IX

                                   AMENDMENTS

Section 9.1        Without Consent of Holders......................................................87
Section 9.2        With Consent of Holders.........................................................88
Section 9.3        Compliance with Trust Indenture Act.............................................89
Section 9.4        Revocation and Effect of Consents and Waivers...................................89
Section 9.5        Notation on or Exchange of Securities...........................................89
Section 9.6        Trustee To Sign Amendments......................................................90

                                    ARTICLE X

                              SUBSIDIARY GUARANTEE

Section 10.1       Subsidiary Guarantee............................................................90
Section 10.2       Limitation on Liability.........................................................91
Section 10.3       Execution and Delivery of Subsidiary Guarantee..................................92
Section 10.4       Successors and Assigns..........................................................92
Section 10.5       No Waiver.......................................................................92
Section 10.6       Right of Contribution...........................................................93
Section 10.7       No Subrogation..................................................................93
Section 10.8       Modification....................................................................93
Section 10.9       Merger, Consolidation or Sale of Assets of a Guarantor; Release of a Guarantor..93
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                                   ARTICLE XI

                                  MISCELLANEOUS

<S>     <C>                                                                                       <C>
Section 11.1       Trust Indenture Act Controls....................................................94
Section 11.2       Notices.........................................................................95
Section 11.3       Communication by Holders with other Holders.....................................96
Section 11.4       Certificate and Opinion as to Conditions Precedent..............................96
Section 11.5       Statements Required in Certificate or Opinion...................................96
Section 11.6       When Securities Disregarded.....................................................96
Section 11.7       Legal Holidays..................................................................96
Section 11.8       Governing Law...................................................................97
Section 11.9       No Personal Liability of Directors, Officers, Employees and Shareholders........97
Section 11.10      Successors......................................................................97
Section 11.11      Multiple Originals; Counterparts................................................97
Section 11.12      Severability....................................................................97
Section 11.13      Variable Provisions.............................................................97
Section 11.14      Table of Contents; Headings.....................................................97
Section 11.15      No Adverse Interpretation of Other Agreements...................................98

EXHIBITS

Exhibit A - Form of Security
Exhibit B - Form of Certificate of Transfer
Exhibit C - Form of Certificate of Exchange
Exhibit D - Form of Notation of Subsidiary Guarantee
Exhibit E - Form of Supplemental Indenture to be Delivered by Future Guarantors
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                              CROSS-REFERENCE TABLE

  Trust Indenture Act Section                              Indenture Section
  310  (a)(1)................................................    7.10
       (a)(2)................................................    7.10
       (a)(3)................................................    N.A.
       (a)(4)................................................    N.A.
       (b)...................................................    7.8; 7.10
       (c)...................................................    N.A.
  311  (a)...................................................    7.11
       (b)...................................................    7.11
       (c)...................................................    N.A.
  312  (a)...................................................    2.5
       (b)...................................................    11.3
       (c)...................................................    11.3
  313  (a)...................................................    7.6
       (b)(1)................................................    N.A.
       (b)(2)................................................    7.6
       (c)...................................................    7.6
       (d)...................................................    7.6
  314  (a)...................................................    4.2; 4.11; 11.2
       (b)...................................................    N.A.
       (c)(1)................................................    11.4
       (c)(2)................................................    11.4
       (c)(3)................................................    N.A.
       (d)...................................................    N.A.
       (e)...................................................    11.5
       (f)...................................................    N.A.
  315  (a)...................................................    7.1
       (b)...................................................    7.5; 11.2
       (c)...................................................    7.1
       (d)...................................................    7.1
       (e)...................................................    6.11
  316  (a)(last sentence)....................................    11.6
       (a)(1)(A).............................................    6.5
       (a)(1)(B).............................................    6.4
       (a)(2)................................................    N.A.
       (b)...................................................    6.7
  317  (a)(1)................................................    6.8
       (a)(2)................................................    6.9
       (b)...................................................    2.4
  318   (a)..................................................    11.1

N.A. means Not Applicable.

-----------
Note:  This  Cross-Reference  Table shall not, for any purpose,  be deemed to be
part of the Indenture.



                                       v
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     INDENTURE, dated as of April 1, 2004, among KCS ENERGY, INC., a Delaware
corporation (the "Company"), each of the GUARANTORS (as defined herein) and U.S.
BANK NATIONAL ASSOCIATION, as trustee (the "Trustee").

      Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 7 1/8% Senior
Notes due 2012 issued on the date hereof (the "Initial Securities"), the Holders
of Additional Securities (as defined herein) and, if and when issued in exchange
for the Initial Securities or any Additional Securities as provided in the
Registration Rights Agreement (as hereinafter defined), the Company's 7 1/8%
Senior Notes due 2012 provided in exchange for such Initial Securities or
Additional Securities (the "Exchange Securities"):

                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1       Definitions

     "144A Global Security" means a Global Security substantially in the form of
Exhibit A hereto bearing the Global Security Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Securities sold in reliance on Rule 144A.

                  "ACNTA" 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 the Company and its Restricted Subsidiaries
               calculated in accordance with SEC guidelines before any state or
               federal income taxes, as estimated in a reserve report prepared
               as of the end of the Company's most recently completed fiscal
               year, which reserve report is prepared or reviewed by independent
               petroleum engineers, as increased by, as of the date of
               determination, the discounted future net revenue of:

               (i)  estimated proved crude oil and natural gas reserves of the
                    Company and its Restricted Subsidiaries attributable to
                    acquisitions consummated since the date of such year-end
                    reserve report, and

               (ii) estimated crude oil and natural gas reserves of the Company
                    and its Restricted Subsidiaries attributable to extensions,
                    discoveries and other additions and upward determinations 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 year end) due to exploration,




<PAGE>

                    development or exploitation, production or other activities
                    which reserves were not reflected in such year-end reserve
                    report,

     in the case of the determination made under each of clauses (i) and (ii)
     above, calculated in accordance with SEC guidelines (utilizing the prices
     utilized in such year-end reserve report), and decreased by, as of the date
     of determination, the discounted future net revenue attributable to

               (iii) estimated proved crude oil and natural gas reserves of the
                    Company and its Restricted Subsidiaries reflected in such
                    year-end reserve report produced or disposed of since the
                    date of such year-end reserve report, and

               (iv) reductions in the estimated crude oil and natural gas
                    reserves of the Company and its Restricted Subsidiaries
                    reflected in such year-end reserve report since the date of
                    such year-end reserve report attributable to downward
                    determinations of estimates of proved crude oil and natural
                    gas reserves due to exploration, development or
                    exploitation, production or other activities conducted or
                    otherwise occurring since the date of such year-end reserve
                    report, in each case calculated in accordance with SEC
                    guidelines (utilizing the prices utilized in such year-end
                    reserve report);

               provided, however, that, in the case of each of the
               determinations made pursuant to clauses (i) through (iv), such
               increases and decreases shall be as estimated by the Company's
               engineers, except that if as a result of such acquisitions,
               dispositions, discoveries, extensions or revisions, there is a
               Material Change, then such increases and decreases in the
               discounted future net revenue shall be confirmed in writing by an
               independent petroleum engineer if the amount of ACNTA is required
               to be computed under this Indenture in connection with the
               calculation of clause (b)(1) of Section 4.3 hereof;

          (b)  the capitalized costs that are attributable to crude oil and
               natural gas properties of the Company and its Restricted
               Subsidiaries to which no proved crude oil and natural gas
               reserves are attributed, based on the Company's books and records
               as of a date no earlier than the date of the Company's latest
               annual or quarterly financial statements;

          (c)  the Net Working Capital on a date no earlier than the date of the
               Company's latest annual or quarterly financial statements; and

          (d)  the greater of (I) the net book value on a date no earlier than
               the date of the Company's latest annual or quarterly financial
               statements and (II) the appraised value, as estimated by
               independent appraisers within the immediately preceding 12
               months, of other tangible assets of the Company and its
               Restricted Subsidiaries (provided that the Company shall


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               not be required to obtain such an appraisal of such assets if no
               such appraisal has been performed);

minus

(2)  to the extent not otherwise taken into account in the immediately preceding
     clause (1), the sum of:

               (a)  minority interests;

               (b)  any net gas balancing liabilities of the Company and its
                    Restricted Subsidiaries reflected in the Company's latest
                    audited financial statements;

               (c)  the discounted future net revenue, calculated in accordance
                    with SEC guidelines (utilizing the same prices utilized in
                    the Company's year-end reserve report), attributable to
                    reserves subject to participation interests, royalty
                    interests, overriding royalty interests, net profits
                    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)  the discounted future net revenue, calculated in accordance
                    with SEC guidelines (utilizing the same prices utilized in
                    the Company's year-end reserve report), attributable to
                    reserves that are required to be delivered to third parties
                    to fully satisfy the obligations of the Company and its
                    Restricted Subsidiaries with respect to Volumetric
                    Production Payments on the schedules specified with respect
                    thereto; and

               (e)  the discounted future net revenue, calculated in accordance
                    with SEC guidelines, attributable to reserves subject to
                    Dollar-Denominated Production Payments that, based on the
                    estimates of production included in determining the
                    discounted future net revenue specified in the immediately
                    preceding clause (1)(a) (utilizing the same prices utilized
                    in the Company's year-end reserve report), would be
                    necessary to satisfy fully the obligations of the Company
                    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, ACNTA will continue
to be calculated as if the Company were still using the full cost method of
accounting.

         "Acquired Debt" means, with respect to any specified Person:

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



                                       3

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     Person merging with or into, or becoming a Subsidiary of, such specified
     Person; and

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

     "Additional Interest" means the additional interest, if any, required by
Section 6 of the Registration Rights Agreement.

     "Additional Securities" means any Securities (other than the Initial
Securities or the Exchange Securities) issued under this Indenture in accordance
with Sections 2.2 and 4.3 hereof, as part of the same series as the Initial
Securities to the extent outstanding and any Exchange Securities then
outstanding

     "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, shall mean 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; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.

     "Agent" means any Registrar or Paying Agent.

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

     "Asset Sale" means:

     (1)  the sale, lease, conveyance or other disposition (including, without
          limitation, by means of a sale and leaseback transaction) of any
          assets, including, without limitation, any sale of hydrocarbons or
          other mineral products as a result of the creation of Production
          Payments and Reserve Sales (other than Production Payments and Reserve
          Sales created or sold in connection with the financing of, and within
          90 days after, the acquisition of the properties subject thereto);
          provided that the sale, lease conveyance or other disposition of all
          or substantially all of the assets of the Company and its Restricted
          Subsidiaries taken as a whole will be governed by Section 4.11 hereof
                                                            ------------
          and/or Section 5.1 hereof and not by the provisions of Section 4.7
                 -----------                                     -----------
          hereof; and

     (2)  the issuance of Equity Interests by any of the Company's Restricted
          Subsidiaries or the sale of Equity Interests in any of its
          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).







                                       4
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     Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:

(1)  any single transaction or series of related transactions that: (a) involves
     assets having a Fair Market Value of less than $2.0 million; or (b) results
     in net proceeds to the Company and its Restricted Subsidiaries of less than
     $2.0 million;

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

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

(4)  a disposition of cash or Cash Equivalents;

(5)  a Restricted Payment that is permitted by Section 4.4 hereof;

(6)  a disposition of oil, natural gas or other hydrocarbons or other mineral
     products in the ordinary course of business of the oil and gas production
     operations of the Company and its Subsidiaries;

(7)  any abandonment, relinquishment, farm-in, farm-out, lease and sub-lease of
     developed and/or undeveloped properties made or entered into in the
     ordinary course of business, but excluding any disposition as a result of
     the creation of a Production Payment and Reserve Sale;

(8)  the provision of services, equipment and other assets for the operation and
     development of the Company's and its Restricted Subsidiaries' oil and
     natural gas wells, in the ordinary course of the Company's and its
     Restricted Subsidiaries' Oil and Gas Business, notwithstanding that such
     transactions may be recorded as asset sales in accordance with full cost
     accounting guidelines;

(9)  the creation or perfection of a Lien (but not the sale or other disposition
     of any asset subject to such Lien);

(10) the trade or exchange ("Permitted Asset Exchange") by the Company or any
     Restricted Subsidiary of any crude oil or natural gas property or interest
     therein owned or held by the Company or such Restricted Subsidiary for (a)
     any crude oil or natural gas property or interest therein owned or held by
     another Person or (b) the Capital Stock of another Person that becomes a
     Restricted Subsidiary as a result of such trade or exchange or the Capital
     Stock of another Person that is a joint venture, partnership or other
     similar entity, in each case all or substantially all of whose assets
     consist of crude oil or natural gas properties, including in the case of
     either of clauses (a) or (b), any cash or cash equivalents necessary in
     order to achieve an exchange of equivalent value; provided, however, that
     the value of the property or Capital Stock received by the Company or any
     Restricted Subsidiary in such trade or exchange (including any cash or cash
     equivalents) is at





                                       5
<PAGE>

     least equal to the Fair Market Value of the property (including any cash or
     cash equivalents) so traded or exchanged;

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

(12) any assignment of an overriding royalty or net profits interest to an
     employee or consultant of the Company or any of its Restricted Subsidiaries
     in the ordinary course of business in connection with the generation of
     prospects or the development of oil and natural gas projects.

     "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 such
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.

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

     "Beneficial Owner" has the meaning assigned to such term in Rule l3d-3 and
Rule l3d-5 under the Exchange Act.

     "Board of Directors" means, with respect to any Person, the board of
directors of such Person or any duly authorized committee thereof.

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

     "Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.

     "Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability of a Person in respect of a capital
lease that would at that time be required to be capitalized on a balance sheet
of such Person in accordance with GAAP.

     "Capital Stock" means:

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





                                       6
<PAGE>

     (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
          or membership interests (whether general or limited); and

     (4)  any other interest or participation (other than any debt security
          convertible into an equity interest) 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.

     "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 thereof
          (provided that the full faith and credit of the United States is
          pledged in support thereof) having maturities of not more than one
          year from the date of acquisition;

     (3)  demand accounts, time deposit accounts, certificates of deposit and
          Eurodollar time deposits with maturities of six months or less from
          the date of acquisition, bankers' acceptances with maturities not
          exceeding six months and overnight bank deposits, in each case, with
          any domestic commercial bank having capital and surplus in excess of
          $250.0 million and a Thompson Bank Watch rating of "B" or better (or
          an equivalent rating by any successor to the business of Thompson Bank
          Watch, including Fitch Ratings);

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

     (5)  commercial paper having the highest rating obtainable from Moody's
          Investors Service, Inc. (or its successor) or Standard & Poor's
          Ratings Service (or its successor) and in each case maturing within
          270 days after the date of acquisition;

     (6)  deposits and certificates of deposit with any commercial bank not
          meeting the qualifications specified in clause (3) above, provided all
          such deposits do not exceed $1.0 million in the aggregate at any one
          time; and

     (7)  money market or other mutual 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 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





                                       7
<PAGE>

          substantially all of the assets of the Company and its Subsidiaries
          taken as a whole;

     (2)  the adoption by the Board of Directors of a plan of 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 such term is used in Section 13(d)(3) of the Exchange Act),
          becomes the Beneficial Owner, directly or indirectly, of more than 35%
          of the Voting Stock of the Company, measured by voting power rather
          than number of shares;

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

     (5)  the Company consolidates with, or merges with or into, any Person, or
          any Person consolidates with, or merges with or into, the Company, in
          any such event pursuant to a transaction in which any of the
          outstanding Voting Stock of the Company is converted into or exchanged
          for cash, securities or other property, other than any such
          transaction where the Voting Stock of the Company outstanding
          immediately prior to such transaction is converted into or exchanged
          for Voting Stock (other than Disqualified Stock) of the surviving or
          transferee Person constituting a majority of the outstanding shares of
          such Voting Stock of such surviving or transferee Person immediately
          after giving effect to such issuance.

     "Clearstream" means Clearstream Banking, S.A., or any successor securities
clearance agency.

     "Code" means the U.S. Internal Revenue Code of 1986, as amended.

     "Commodity Agreement" means any oil or natural gas hedging agreement and
other agreement or arrangement entered into in the ordinary course of business
and designed to protect the Company or any Restricted Subsidiary against
fluctuations in oil or natural gas prices.

     "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 there shall be excluded therefrom:

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

     (2)  the net income of any Restricted Subsidiary 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





                                       8
<PAGE>

          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;

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

     (4)  any write-downs of non-current assets; provided, however, that any
          "ceiling limitation" write-downs under SEC guidelines shall be treated
          as capitalized costs, as if such write-downs had not occurred;

     (5)  any unrealized non-cash gains or losses or charges in respect of hedge
          or non-hedge derivatives (including those resulting from the
          application of FAS 133);

     (6)  any gain (or loss), together with any related provision for taxes on
          such gain (or 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;

     (7)  any extraordinary or non-recurring gain (or loss), together with any
          related provision for taxes on such extraordinary or non-recurring
          gain (or loss); and

     (8)  any non-cash compensation charge arising from any grant of stock,
          stock options or other equity-based awards.

     "Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP, as of the end of the most recent fiscal quarter
of the Company ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as the sum of:

     (1)  the par or stated value of all outstanding Capital Stock of the
          Company, plus

     (2)  paid-in capital or capital surplus relating to such Capital Stock,
          plus

     (3)  any retained earnings or earned surplus,

     less (A) any accumulated deficit and (B) any amounts attributable to
Disqualified 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 Issue Date; or

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







                                       9
<PAGE>

     "Credit Facilities" means, with respect to the Company or any Guarantor,
one or more debt facilities or commercial paper facilities (including, without
limitation, the Existing Credit Facilities), in each case with banks or other
lenders in the business of providing loans of the types described hereinafter,
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit or letter of credit guarantees, in each case, as amended, restated,
modified, supplemented, extended, renewed, refunded, replaced or refinanced in
whole or in part from time to time.

     "Currency Agreements" means, at any time as to the Company and its
Restricted Subsidiaries, any foreign currency exchange agreement, option or
future contract or other similar agreement or arrangement entered into in the
ordinary course of business and designed to protect against or manage the
Company or any of its Restricted Subsidiaries' exposure to fluctuations in
foreign currency exchange rates.

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

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

     "Definitive Security" means a certificated Security registered in the name
of the Holder thereof and issued in accordance with Section 2.6 hereof,
                                                    -----------
substantially in the form of Exhibit A hereto except that such Security shall
                             ---------
not bear the Global Security Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Security" attached thereto.

     "Depositary" means The Depository Trust Company, until a successor shall
have been appointed and become such Depositary pursuant to this Indenture and
thereafter shall mean its successor.

     "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 thereof), or upon the
happening of any event, matures or is mandatorily redeemable, for any
consideration other than Capital Stock pursuant to a sinking fund obligation or
otherwise, or is redeemable for any consideration other than Capital Stock at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders thereof have the right to require the Company to
repurchase such Capital Stock upon the occurrence of a change of control or an
asset sale shall not constitute Disqualified Stock if the terms of such Capital
Stock provide that the Company may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 4.4 hereof.
     -----------

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




                                       10
<PAGE>

     "EBITDA" means, with respect to any Person for any period, without
duplication, the Consolidated Net Income of such Person for such period plus:

     (1)  an amount equal to any extraordinary loss plus any net loss realized
          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)  consolidated interest expense of such Person and its Restricted
          Subsidiaries for such period, whether paid or accrued and whether or
          not capitalized (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 aspect to Attributable Debt,
          commissions, discounts and other fees and charges incurred in respect
          of letter of credit or bankers' acceptance financings, and net
          payments, if any, pursuant to Interest Rate Agreements), to the extent
          that any such expense was deducted in computing such Consolidated Net
          Income; plus

     (4)  depreciation, depletion, amortization (including amortization of
          goodwill and other intangibles but excluding amortization of prepaid
          cash expenses that were paid in a prior period) 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 other than non-cash charges resulting from the
          application of FAS 143) of such Person and its Restricted Subsidiaries
          for such period to the extent that such depreciation, depletion,
          amortization and other non-cash expenses were deducted in computing
          such Consolidated Net Income; minus

     (5)  non-cash items increasing such Consolidated Net Income for such
          period, other than items that were accrued in the ordinary course of
          business, in each case, on a consolidated basis and determined in
          accordance with GAAP; minus

     (6)  (to the extent included in determining Consolidated Net Income) the
          sum of

          (a)  the amount of deferred revenues that are amortized during the
               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.

     Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation, depletion and amortization and other
non-cash charges of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute EBITDA of






                                       11
<PAGE>

the Company only to the extent that a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.

     "Employee Stock Purchase Program " means the 1988 KCS Group, Inc. Employee
Stock Purchase Program, as amended on or prior to the Issue Date and any
amendment thereto or any successor employee stock purchase program.

         "Equity Interests" mean 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:

          (1)  any underwritten public offering of common stock of the Company
               registered under the Securities Act (other than on Form S-8 or
               any successor thereto but including any such offering in
               connection with the Employee Stock Purchase Plan) and other than
               any issuance of securities under any benefit plan of the Company;
               and

          (2)  any unregistered offering of common stock of the Company, so long
               as, at the time of the consummation thereof, the Company has a
               class of common equity securities registered pursuant to Section
               12(b) or 12(g) under the Exchange Act.

     "Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
clearance system, or any successor securities clearance agency.

     "Exchange Act" means the Securities Exchange Act of 1934 and any successor
statute thereto, in each case as amended from time to time.

     "Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.

     "Exchange Securities" has the meaning set forth in the Registration Rights
Agreement.

     "Exchanging Dealer" has the meaning set forth in the Registration Rights
Agreement.

     "Existing Credit Facilities" means the secured credit facilities of the
Company under the Second Amended and Restated Credit Agreement, dated as of
November 18, 2003, as amended on or prior to the Issue Date, by and among the
Company and the commercial lending institution that are agents and lenders
thereunder.

     "Existing Indebtedness" means Indebtedness outstanding on the Issue Date.

     "Fair Market Value" means, with respect to any Asset Sale (or Permitted
Asset Exchange) or Restricted Payment (or Investment or Permitted Investment),
the price that would




                                       12
<PAGE>

be negotiated in an arm's-length transaction between a willing seller and a
willing and able buyer, neither of which is under any compulsion to complete the
transaction, as such price is determined in good faith by:

     (1)  if the value of such Asset Sale (or Permitted Asset Exchange having a
          value of more than $2.0 million) or Restricted Payment (or Investment
          or Permitted Investment) is less than $10.0 million, an officer of the
          Company, as evidenced by an Officers' Certificate delivered to the
          Trustee; and

     (2)  if the value of such Asset Sale (or Permitted Asset Exchange) or
          Restricted Payment (or Investment or Permitted Investment) is $10.0
          million or greater, the Board of Directors of the Company, as
          evidenced by a board resolution delivered to the Trustee in the form
          of an Officers' Certificate.

     "Fixed Charges" means, with respect to any 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, including,
          without limitation, original issue discount, non-cash interest
          payments (other than amortization of debt issuance costs), the
          interest component of any deferred payment obligations constituting
          Indebtedness, 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 letters of credit or bankers' acceptance
          financings, and net payments, if any, pursuant to Interest Rate
          Agreements; plus

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

     (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)  the product of:

          (a)  all dividend payments, whether or not in cash, on any series of
               preferred stock of such Person or any of its Restricted
               Subsidiaries, other than dividend payments 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, times

          (b)  a fraction, the numerator of which is one and the denominator of
               which is one minus the then current combined federal, state and
               local statutory tax rate of such Person, expressed as a decimal,
               in each case, on a consolidated basis and in accordance with
               GAAP.






                                       13
<PAGE>

     "Fixed Charge Coverage Ratio" means, with respect to any specified Person
for any period, the ratio of the EBITDA of such Person and its Restricted
Subsidiaries 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, redeems or repays any Indebtedness
(other than revolving credit borrowings) or issues or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but 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 shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, redemption or repayment of
Indebtedness, or such issuance or redemption of preferred stock, 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 or consolidations
          and including any related financing transactions, during the
          four-quarter reference period or subsequent to such reference period
          and on or prior to the Calculation Date shall be deemed to have
          occurred on the first day of the four-quarter reference period;

     (2)  the EBITDA attributable to discontinued operations, as determined in
          accordance with GAAP, and operations or businesses disposed of prior
          to the Calculation Date, shall be excluded; and

     (3)  the Fixed Charges attributable to discontinued operations, as
          determined in accordance with GAAP, and operations or businesses
          disposed of prior to the Calculation Date, shall 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.

     "Foreign Subsidiary" means any Restricted Subsidiary incorporated or
organized under the laws of a foreign jurisdiction and having substantially all
its operations outside the United States of America.

     "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements, and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.

     "Global Securities" means, individually and collectively, each of the
Restricted Global Securities and the Unrestricted Global Securities, in the form
of Exhibit A hereto.

     "Global Security Legend" means the legend set forth in Section 2.6(g)(2),
which is required to be placed on all Global Securities issued under this
Indenture.

     "Government Securities" means direct obligations, or certificates
representing an ownership interest in such obligations, of the United States of
America (including any agency or





                                       14
<PAGE>

instrumentality thereof) for the payment of which the full faith and credit of
the United States of America is pledged and that are not callable at the
issuer's option.

     "Guarantee" means, without duplication, any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of
any other Person and any other obligation, direct or indirect, contingent or
otherwise, of such Person:

     (1)  to purchase or pay (or advance or supply funds for the purchase or
          payment of) such Indebtedness of such other Person (whether arising by
          virtue of partnership arrangements, or by agreements to keep-well, to
          purchase assets, goods, securities or services, to take-or-pay or to
          maintain financial statement conditions or otherwise), or

     (2)  entered into for the purpose of assuring in any other manner the
          obligee of such Indebtedness of the payment therefor to protect such
          obligee against loss in respect thereof (in whole or in part);

provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.

     "Guarantors" means each Subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of this Indenture, and its respective successors
and assigns.

     "Hedging Obligations" means, with respect to any Person, the obligations of
such Person under Currency Agreements, Interest Rate Agreements and Commodity
Agreements.

     "Holder" means a person in whose name a Security is registered on the
Registrar's books.

     "Indebtedness" means, with respect to any specified Person, without
duplication,

(1)  all obligations of such Person, whether or not contingent, in respect of:

     (a)  the principal of and premium, if any, in respect of outstanding (i)
          Indebtedness of such Person for money borrowed and (ii) Indebtedness
          evidenced by notes, debentures, bonds or other similar instruments for
          the payment of which such Person is responsible or liable;

     (b)  all Capital Lease Obligations of such Person and all Attributable Debt
          in respect of sale and leaseback transactions entered into by such
          Person;

     (c)  the deferred purchase price of property, which purchase price is due
          more than six months after the date of taking delivery of title to
          such property, including all obligations of such Person for the
          deferred purchase price of property under any title retention
          agreement, but excluding accrued expenses and trade accounts payable
          arising in the ordinary course of business; and





                                       15
<PAGE>


     (d)  the reimbursement obligation of any obligor for the principal amount
          of any letter of credit, banker's acceptance or similar transaction
          (excluding obligations with respect to letters of credit securing
          obligations (other than obligations described in clauses (a) through
          (c) above) entered into in the ordinary course of business of such
          Person to the extent such letters of credit are not drawn upon or, if
          and to the extent drawn upon, such drawing is reimbursed no later than
          the tenth Business Day following receipt by such Person of a demand
          for reimbursement following payment on the letter of credit);

(2)  all net obligations in respect of Currency Agreements, Interest Rate
     Agreements and Commodity Agreements, except to the extent such net
     obligations are otherwise included in this definition;

(3)  all liabilities of others of the kind described in the preceding clause (1)
     or (2) that such Person has Guaranteed or that are otherwise its legal
     liability;

(4)  with respect to any Production Payment and Reserve Sale, any warranties or
     guaranties of production or payment by such Person with respect to such
     Production Payment and Reserve Sale but excluding other contractual
     obligations of such Person with respect to such Production Payment and
     Reserve Sale;

(5)  Indebtedness (as otherwise defined in this definition) of another Person
     secured by a Lien on any asset of such Person, whether or not such
     Indebtedness is assumed by such Person, the amount of such obligations
     being deemed to be the lesser of

     (a)  the full amount of such obligations so secured and

     (b)  the fair market value of such asset as determined in good faith by
          such specified Person;

(6)  Disqualified Stock of such Person or a Restricted Subsidiary in an amount
     equal to the greater of the maximum mandatory redemption or repurchase
     price (not including, in either case, any redemption or repurchase premium)
     or the liquidation preference thereof;

(7)  the aggregate preference in respect of amounts payable on the issued and
     outstanding shares of preferred stock of any of the Company's Restricted
     Subsidiaries in the event of any voluntary or involuntary liquidation,
     dissolution or winding up (excluding any such preference attributable to
     such shares of preferred stock that are owned by such Person or any of its
     Restricted Subsidiaries; provided, that if such Person is the Company, such
     exclusion shall be for such preference attributable to such shares of
     preferred stock that are owned by the Company or any of its Restricted
     Subsidiaries); and

(8)  any and all deferrals, renewals, extensions, refinancings and refundings
     (whether direct or indirect) of, or amendments, modifications or
     supplements to, any





                                       16
<PAGE>

     liability of the kind described in any of the preceding clauses (1), (2),
     (3), (4), (5), (6), (7) or this clause (8), whether or not between or among
     the same parties.

Subject to clause (4) of the preceding sentence, Production Payments and Reserve
Sales shall not be deemed to be Indebtedness.

     "Indenture" means this Indenture as amended or supplemented from time to
time.

     "Indirect Participant" means a Person who holds a beneficial interest in a
Global Security through a Participant.

     "Initial Purchasers" means with respect to the Initial Securities, Credit
Suisse First Boston LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Jeffries & Company, Inc., Harris Nesbitt Corp., Banc One Capital Markets, Inc.
and BNP Paribas Securities Corp.

     "Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.

     "Interest Rate Agreements" means, with respect to the Company and its
Restricted Subsidiaries, interest rate agreements, interest rate cap agreements
and interest rate collar agreements and other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, with
respect to any Indebtedness that is permitted to be incurred under this
Indenture.

     "Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet 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
shall be deemed to have made an Investment on the date of any such sale or
disposition 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 third to last paragraph of Section 4.4 hereof.

     "Issue Date" means April 1, 2004.

     "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.







                                       17
<PAGE>

     "Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices and changes resulting from the incurrence
of previously estimated future development costs) of more than 25% during a
fiscal quarter in the discounted future net revenues from proved crude oil and
natural gas reserves of the Company and its Restricted Subsidiaries, calculated
in accordance with clause (a)(i) of the definition of ACNTA; provided, however,
that the following will be excluded from the calculation of Material Change:

     (1)  any acquisitions during the fiscal quarter of oil and natural gas
          reserves that have been estimated by independent petroleum engineers
          and with respect to which a report or reports of such engineers exist;
          and

     (2)  any disposition of properties existing at the beginning of such fiscal
          quarter that have been disposed of in compliance with Section 4.7
          hereof.

     "Net Cash Proceeds," with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, listing fees,
discounts or commissions and brokerage, consultant and other fees and charges
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result of such issuance or sale.

     "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, without duplication:

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

     (2)  taxes paid or payable as a result thereof;

     (3)  amounts required to be applied to the repayment of Indebtedness (other
          than under the Credit Facilities) secured by a Lien on the asset or
          assets that were the subject of such Asset Sale;

     (4)  any reserve established in accordance with GAAP against liabilities
          associated with such Asset Sale or any amount placed in escrow for
          adjustment in respect of the purchase price of such Asset Sale, until
          such time as such reserve is reversed or such escrow arrangement is
          terminated, in which case Net Proceeds shall be increased by 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; and

     (5)  any distributions and other payments required to be made to minority
          interest holders in any Restricted Subsidiaries as a result of such
          Asset Sale.

     "Net Working Capital" means:







                                       18
<PAGE>

     (1)  all current assets of the Company and its Restricted Subsidiaries,
          minus

     (2)  all current liabilities of the Company and its Restricted
          Subsidiaries, except current liabilities included in Indebtedness;

     in each case determined in accordance with GAAP.

     "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)
          constitutes the lender; and

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

     "Non-Recourse Purchase Money Indebtedness" means Indebtedness (other than
Capital Lease Obligations) of the Company or any Guarantor incurred in
connection with the acquisition by the Company or such Guarantor of assets used
in the Oil and Gas Business (including office buildings and other real property
used by the Company or such Guarantor in conducting its operations) with respect
to which:

     (1)  the holders of such Indebtedness agree that they will look solely to
          the assets so acquired that secure such Indebtedness, and neither the
          Company nor any Restricted Subsidiary (a) is directly or indirectly
          liable for such Indebtedness or (b) provides credit support, including
          any undertaking, Guarantee, agreement or instrument that would
          constitute Indebtedness (other than the grant of a Lien on such
          acquired assets); and

     (2)  no default or event of default with respect to such Indebtedness would
          cause, or permit (after notice or passage of time or otherwise), any
          holder of any other Indebtedness of the Company or a Guarantor to
          declare a default or event of default on such other Indebtedness or
          cause the payment, repurchase, redemption, defeasance or other
          acquisition or retirement for value thereof to be accelerated or
          payable prior to any scheduled principal payment, scheduled sinking
          fund payment or maturity.

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

     "Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers or by an officer and either an Assistant Treasurer or and
Assistant Secretary of the






                                       19
<PAGE>

Company (for which in the case of the annual Officers' Certificate delivered
pursuant to Section 4.16, at least one of such Officers shall be the principal
            ------------
executive officer, principal financial officer or principal accounting officer
of the Company) and that complies with Sections 11.4 and 11.5 of this Indenture
                                       -------------     ----
and is delivered to the Trustee.

     "Oil and Gas Business" means:

     (1)  the acquisition, exploration, exploitation, development, operation or
          disposition of interests in, or obtaining production from, oil,
          natural gas or other hydrocarbon properties;

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

     (3)  any activity that is ancillary, necessary or appropriate to
          facilitate, or that is incidental to, the activities described in
          clauses (1) and (2) of this definition.

     "Oil and Gas Liens" means:

     (1)  Liens on any specific property or any interest therein, construction
          thereon or improvement thereto to secure all or any part of the costs
          incurred for surveying, exploration, drilling, extraction,
          development, operation, production, construction, alteration, repair
          or improvement of, in, under or on such property and the plugging and
          abandonment of wells located thereon (it being understood that, in the
          case of oil and gas producing properties, or any interest therein,
          costs incurred for "development" will include costs incurred for all
          facilities relating to such properties or to projects, ventures or
          other arrangements of which such properties form a part or that relate
          to such properties or interests);

     (2)  Liens on an oil or gas producing property to secure obligations
          incurred or guarantees of obligations incurred in connection with or
          necessarily incidental to commitments for the purchase or sale of, or
          the transportation or distribution of, the products derived from such
          property;

     (3)  Liens arising under partnership agreements, oil and gas leases,
          overriding royalty agreements, net profits agreements, production
          payment agreements, royalty trust agreements, incentive compensation
          programs on terms that are reasonably customary, in the Oil and Gas
          Business for geologists, geophysicists and other providers of
          technical services to the Company or a Restricted Subsidiary, farm-out
          agreements, farm-in agreements, division orders, contracts for the
          sale, purchase, exchange, transportation, gathering or processing of
          oil, gas or other hydrocarbons, unitizations and pooling designations,
          declarations, orders and agreements, development agreements, operating
          agreements, production sales contracts, area of mutual interest
          agreements, gas balancing or deferred production agreements,
          injection, repressuring and recycling agreements, salt water or other
          disposal agreements, seismic or geophysical permits or agreements, and
          other agreements that are customary in the Oil and Gas Business;
          provided,






                                       20
<PAGE>

          however, that in all instances such Liens are limited to the assets
          that are the subject of the relevant agreement, program, order or
          contract;

     (4)  Liens securing Production Payments and Reserve Sales; provided that
          such Liens are limited to the property that is subject to such
          Production Payments and Reserve Sales, and such Production Payments
          and Reserve Sales either:

          (a)  were in existence on the Issue Date,

          (b)  were created in connection with the acquisition of property after
               the date of the Indenture and such Lien was incurred in
               connection with the financing of, and within 90 days after the
               acquisition of the property subject thereto, or

          (c)  constitute Asset Sales made in compliance with Section 4.7
               hereof.

     (5)  Liens on pipelines or pipeline facilities that arise by operation of
          law.

     "Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee and that complies with Sections 10.4 and
10.5 of this Indenture and is delivered to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.

     "Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).

     "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 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)  ownership of oil, natural gas, other related hydrocarbon and mineral
          properties or any interest therein or gathering, transportation,
          processing, storage or related systems; 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 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 (including for limited liability companies),
          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





                                       21
<PAGE>

          course of the Oil and Gas Business, excluding, however, Investments in
          corporations.

     "Permitted Investments" means:

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

     (2)  any Investment in Cash Equivalents;

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

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

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

     (4)  any Investment made as a result of the receipt of non-cash
          consideration from an Asset Sale that was made pursuant to and in
          compliance with Section 4.7 hereof.
                          -----------

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

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

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

     (8)  loans or advances to employees made in the ordinary course of business
          of the Company or such Restricted Subsidiary made for bona fide
          business purposes;

     (9)  Capital Stock, obligations or securities received in settlement of
          debts created in the ordinary course of business and owing to the
          Company or any Restricted Subsidiary or in satisfaction of judgments
          or pursuant to any plan of reorganization or similar arrangement upon
          the bankruptcy or insolvency of a debtor or received in connection
          with a work-out or recapitalization of the issuer or as a result of a
          foreclosure or other transfer of title or perfection or enforcement of
          any lien with respect to any secured Investment in default;

     (10) Hedging Obligations, which transactions or obligations are incurred in
          compliance with Section 4.3 hereof.
                          -----------



                                       22
<PAGE>

     (11) Permitted Business Investments; and

     (12) 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 (12) since the Issue
          Date, not to exceed $20.0 million.

     "Permitted Liens" means:

     (1)  Liens on any property or assets of the Company and any Guarantor
          securing Indebtedness and other obligations under Credit Facilities
          that were permitted by the terms of the Indenture to be incurred;

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

     (3)  Liens on any property or assets 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 property or assets other than those of the
          Person merged into or consolidated with the Company or the Restricted
          Subsidiary;

     (4)  Liens on any property or assets existing at the time of acquisition
          thereof by the Company or any Restricted Subsidiary of the Company,
          provided that such Liens were not incurred in connection with the
          contemplation of such acquisition;

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

     (6)  Liens existing on the Issue Date;

     (7)  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;

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

     (9)  Liens securing Hedging Obligations of the Company or any of its
          Restricted Subsidiaries;



                                       23
<PAGE>

     (10) Liens securing Non-Recourse Purchase Money Indebtedness granted in
          connection with the acquisition by the Company or any Restricted
          Subsidiary of assets used in the Oil and Gas Business (including the
          office buildings and other real property used by the Company or such
          Restricted Subsidiary in conducting its operations); provided that (i)
          such Liens attach only to the assets acquired with the proceeds of
          such Non-Recourse Purchase Money Indebtedness; and (ii) such
          Non-Recourse Purchase Money Indebtedness is not in excess of the
          purchase price of such fixed assets; and

     (11) any Lien incurred in the ordinary course of business incidental to the
          conduct of the business of the Company or the Restricted Subsidiaries
          or the ownership of their property (including (a) easements, rights of
          way and similar encumbrances, (b) rights or title of lessors under
          leases (other than Capital Lease Obligations), (c) rights of
          collecting banks having rights of setoff, revocation, refund or
          chargeback with respect to money or instruments of the Company or the
          Restricted Subsidiaries on deposit with or in the possession of such
          banks, (d) Liens imposed by law, including Liens under workers'
          compensation or similar legislation and mechanics', carriers',
          warehousemen's, materialmen's, suppliers' and vendors' Liens, (e)
          Liens incurred to secure performance of obligations with respect to
          statutory or regulatory requirements, performance or return-of-money
          bonds, surety bonds or other obligations of a like nature and incurred
          in a manner consistent with industry practice and (f) Oil and Gas
          Liens, in each case which are not incurred in connection with the
          borrowing of money, the obtaining of advances or credit or the payment
          of the deferred purchase price of property (other than trade accounts
          payable arising in the ordinary course of business)); and

     (12) Liens for taxes, assessments and governmental charges not yet due or
          the validity of which are being contested in good faith by appropriate
          proceedings, promptly instituted and diligently conducted, and for
          which adequate reserves have been established to the extent required
          by GAAP as in effect at such time.

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

     (1)  the principal amount (or accreted value, if applicable) of such
          Permitted Refinancing Indebtedness does not exceed the principal
          amount of (or accreted value, if applicable), plus premium, if any,
          and accrued interest on the Indebtedness so extended, refinanced,
          renewed, replaced, defeased or refunded (plus the amount of reasonable
          expenses incurred in connection therewith);

     (2)  if the final maturity date of the Indebtedness being extended,
          refinanced, renewed, replaced, deferred or refunded is earlier than



                                       24
<PAGE>

          the final maturity date of the Notes, the Permitted Refinancing
          Indebtedness has a final maturity date no earlier than the final
          maturity date of the Indebtedness being extended, refinanced, renewed,
          replaced, deferred or refunded, or


     (3)  if the final maturity date of the Indebtedness being extended,
          refinanced, renewed, replaced, deferred or refunded is later than the
          final maturity date of the Note, the Permitted Refinancing
          Indebtedness has a final maturity date at least 91 days later than the
          final maturity date of the Notes;

     (4)  the Permitted Refinancing Indebtedness has a Weighted Average Life to
          Maturity at the time such Permitted Refinancing Indebtedness is
          incurred that is equal to or greater than the Weighted Average Life to
          Maturity of the Indebtedness being extended, refinanced, renewed,
          replaced, deferred or refunded;

     (5)  if the Indebtedness being extended, refinanced, renewed, replaced,
          defeased or refunded is subordinated in right of payment to the Notes
          or a Subsidiary Guarantee, such Permitted Refinancing Indebtedness is
          subordinated in right of payment to, the Notes or such Subsidiary
          Guarantee on terms at least as favorable, taken as a whole, to the
          Holders of Notes as those contained in the documentation governing the
          Indebtedness being extended, refinanced, renewed, replaced, defeased
          or refunded;

     (6)  such Indebtedness is not incurred by a Restricted Subsidiary if the
          Company is the obligor on the Indebtedness being extended, refinanced,
          renewed, replaced, defeased or refunded; provided, however, that a
          Restricted Subsidiary that is also a Guarantor may guarantee Permitted
          Refinancing Indebtedness incurred by the Company, whether or not such
          Restricted Subsidiary was an obligor or guarantor of the Indebtedness
          being extended, refinanced, renewed, replaced, defeased or refunded;
          provided further, however, that if such Permitted Refinancing
          Indebtedness is subordinated to the Notes, such Guarantee shall be
          subordinated to such Restricted Subsidiary's Subsidiary Guarantee to
          at least the same extent; and

     (7)  if the Indebtedness being extended, refinanced, renewed, replaced,
          defeased, or refunded is Non-Recourse Purchase Money Indebtedness,
          such Permitted Refinancing Indebtedness satisfies clauses (1) and (2)
          of the definition of "Non-Recourse Purchase Money Indebtedness."

     "Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization, government or any agency or political subsidiary thereof or any
other entity.

     "Private Exchange" has the meaning set forth in the Registration Rights
Agreement.




                                       25
<PAGE>


     "Private Exchange Securities" has the meaning set forth in the Registration
Rights Agreement.

     "Private Placement Legend" means the legend set forth in Section 2.6(g)(1)
                                                              -----------------
to be placed on all Securities issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

     "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 to any Person of a royalty, overriding
royalty, net profits interest or Production Payment in oil and natural gas
properties, reserves or the right to receive all or a portion of the production
or the proceeds from the sale of production attributable to such properties
where, in the case of each of the foregoing, the holder of such interest has
recourse solely to such production or proceeds of production, subject to the
obligation of the grantor or transferor to operate and maintain, or cause the
subject interests to be operated and maintained, in a reasonably prudent manner
or other customary standard or subject to the obligation of the grantor or
transferor to indemnify for environmental, title or other matters customary in
the foregoing interests.

     "QIB" means any "qualified institutional buyer" (as defined under the
Securities Act).

     "Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

     "Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

     "Registered Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.

     "Registration Rights Agreement" means the Registration Rights Agreement,
dated as of April 1, 2004, among the Company, the Guarantors and the Initial
Purchasers, or any similar registration rights agreement with respect to
Additional Securities.

     "Regulation S" means Regulation S promulgated under the Securities Act.

     "Regulation S Global Security" means a permanent Global Security
substantially in the form of Exhibit A hereto bearing the Global Security Legend
                             ---------
and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Securities
initially sold in reliance on Regulation S.

     "Restricted Definitive Security" means a Definitive Security bearing the
Private Placement Legend.

     "Restricted Global Security" means a Global Security bearing the Private
Placement Legend (including the Regulation S Global Security).



                                       26
<PAGE>

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

     "Restricted Subsidiary" of a Person means any Subsidiary of the referenced
Person that is not an Unrestricted Subsidiary.

     "Rule 144" means Rule 144 promulgated under the Securities Act.

     "Rule 144A" means Rule 144A promulgated under the Securities Act.

     "144A Global Security" means the Global Security substantially in the form
of Exhibit A hereto bearing the Global Security Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Securities sold in reliance on Rule 144A.

     "Rule 903" means Rule 903 promulgated under the Securities Act.

     "Rule 904" means Rule 904 promulgated the Securities Act.

     "SEC" means the U.S. Securities and Exchange Commission.

     "Securities" means securities issued under this Indenture. The Initial
Securities, the Exchange Securities and the Additional Securities shall be
treated as a single class for all purposes under this Indenture, and unless
otherwise provided or the context otherwise requires, all references to the
Securities shall include the Initial Securities, the Exchange Securities and the
Additional Securities.

     "Securities Act" means the Securities Act of 1933 and any successor statute
thereto, in each case as amended from time to time.

     "Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary) or any successor Person, and shall
initially be the initial Registrar.

     "Senior Debt" means:

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

     (2)  any other Indebtedness of the Company or any Guarantor permitted to be
          incurred by it under the terms of the Indenture, unless the instrument
          under which such Indebtedness is incurred expressly provides that it
          is subordinated in right of payment to the Notes or the Subsidiary
          Guarantees, as the case may be.

     "Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.




                                       27
<PAGE>


     "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 Act, as such Regulation is in effect on the Issue Date.

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

     "Subordinated Indebtedness" means Indebtedness of the Company (or a
Guarantor) that is subordinated or junior in right of payment to the Securities
(or a Subsidiary Guarantee, as appropriate) pursuant to a written agreement to
that effect.

     "Subsidiary" means any subsidiary of the Company. A "subsidiary" of any
Person means:

     (1)  a corporation a majority of whose Voting Stock is at the time,
          directly or indirectly owned by such Person, by one or more
          subsidiaries of such Person or by such Person and one or more
          subsidiaries of such Person; or

     (2)  a partnership, joint venture, limited liability company or similar
          entity, in which such Person or a subsidiary of such Person is, at the
          date of determination, in the case of a partnership, a general or
          limited partner of such partnership, and, in the case of each of the
          foregoing entities, is entitled to receive more than 50 percent of the
          assets of such partnership upon its dissolution.

     "Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of the
Company's obligations with respect to the Securities.

     "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

     "Trust Officer" means the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

     "Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder.

     "Unrestricted Definitive Note" means one or more Definitive Securities that
do not bear and are not required to bear the Private Placement Legend.

     "Unrestricted Global Security" means a permanent Global Security
substantially in the form of Exhibit A attached hereto that bears the Global
                             ---------
Security Legend and that has the





                                       28
<PAGE>

"Schedule of Exchanges of Interests in the Global Security" attached thereto,
and that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Securities that do not bear the Private
Placement Legend.

     "Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors 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;

     (2)  is not party to any agreement, contract, arrangement or understanding
          with the Company or any Restricted Subsidiary or 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 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.

     The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation is in compliance with the next
succeeding sentence and would not otherwise cause a Default. If a Restricted
Subsidiary is designated as an Unrestricted Subsidiary, all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary so designated, shall be valued at their Fair Market Value at the time
of such designation for purposes of determining compliance with Section 4.4
                                                                -----------
hereof; provided, however, that such covenant need not be complied with if the
Subsidiary to be so designated has total assets of $1,000 or less. That
designation will only be permitted if such Restricted Payment would be so
permitted at that time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.

     Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a copy
of the Board Resolution giving effect to such designation certified in an
Officers' Certificate that also certifies that such designation complied with
the preceding conditions and was permitted by Section 4.4, in which case such
designation shall be effective as of the date specified in such resolution
hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred 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 4.3 hereof, the Company
                                               -----------
shall be in default of such covenant.




                                       29
<PAGE>


     The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall 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 shall only be permitted if (1) such Indebtedness
is permitted under Section 4.3 hereof, 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.

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

     "Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled (without reference to the occurrence of any
contingency) to vote in the election of the directors, managers or trustees of
such Person.

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

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

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

     "Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock of which (other
than directors' qualifying shares) shall at the time be owned by such Person
and/or by one or more other Wholly Owned Restricted Subsidiaries of such Person.

Section 1.2                 Other Definitions

"Affiliate Transaction"..........................     Section 4.8(a)
"Asset Sale Offer"...............................     Section 4.7(c)
"Asset Sale Payment".............................     Section 4.7(c)
"Asset Sale Payment Date"........................     Section 4.7(d)
"Authenticating Agent"...........................     Section 2.2
"Change of Control Offer"........................     Section 4.11(a)
"Change of Control Payment"......................     Section 4.11(a)
"Change of Control Payment Date".................     Section 4.11(a)
"covenant defeasance option".....................     Section 8.1(b)
"Defaulted Interest".............................     Section 2.11
"Event of Default"...............................     Section 6.1
"Excess Proceeds"................................     Section 4.7(c)
"Exchange Securities"............................     Preamble
"incur"..........................................     Section 4.3(a)






                                       30
<PAGE>

"Initial Securities".............................     Preamble
"legal defeasance option"........................     Section 8.1(b)
"Legal Holiday"..................................     Section 11.7
"Obligations"....................................     Section 10.1
"Paying Agent"...................................     Section 2.3
"Payment Default"................................     Section 6.1(6)
"Permitted Asset Exchange".......................     Section 1.1 ("Asset Sale")
"Permitted Indebtedness" ........................     Section 4.3(b)
"Registrar"......................................     Section 2.3
"Restricted Payment".............................     Section 4.4(a)

Section 1.3 Incorporation by Reference of Trust Indenture Act

     This Indenture is subject to the mandatory provisions of the Trust
Indenture Act which are incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms have the following meanings:

     "Commission" means the SEC.

     "indenture securities" means the Securities.

     "indenture security holder" means a Holder.

     "indenture to be qualified" means this Indenture.

     "indenture trustee" or "institutional trustee" means the Trustee.

     "obligor" on the indenture securities means the Company and any other
obligor (including any Guarantor) on the indenture securities.

     All other Trust Indenture Act terms used in this Indenture that are defined
by the Trust Indenture Act, defined by the Trust Indenture Act by reference to
another statute or defined by an SEC rule have the meanings assigned to them by
such definitions.

Section 1.4 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)  "including" means including without limitation;







                                       31
<PAGE>

(5) words in the singular include the plural and words in the plural include the
singular;

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

(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.

                                   ARTICLE II

                                 THE SECURITIES

Section 2.1       Form and Dating

     (a) General. The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Subsidiary
                                      ---------
Guarantees shall be substantially in the form of Exhibit E hereto, and shall be
                                                 ---------
notated on the Securities. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication. The Securities shall be in
denominations of $1,000 and integral multiples thereof.

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

     (b) Global Securities. Securities issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
                             ---------
Security Legend thereon and the "Schedule of Exchanges of Interests in the
Global Security" attached thereto). Securities issued in definitive form shall
be substantially in the form of Exhibit A attached hereto (but without the
                                ---------
Global Security Legend thereon and without the "Schedule of Exchanges of
Interests in the Global Security" attached thereto). Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Securities from time to time endorsed thereon and that the aggregate
principal amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Securities
represented thereby shall be made by the Trustee or the Securities Custodian, at
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.6 hereof.
                              -----------

     (c) Regulation S Global Securities. Securities offered and sold in reliance
on Regulation S shall be issued initially in the form of the Regulation S Global
Security, which shall






                                       32
<PAGE>

be deposited on behalf of the purchasers of the Securities represented thereby
with the Registrar, at its office located in The Borough of Manhattan, City of
New York, State of New York, as custodian for the Depositary, and registered in
the name of the Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of Euroclear or Clearstream, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. Prior
to the expiration of the Restricted Period, any resale or transfer or such
interests to U.S. Persons (as defined in Regulation S) shall not be permitted
unless such resale or transfer is made pursuant to Rule 144A or Regulation S.
The aggregate principal amount of the Regulation S Global Securities may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee, as the case may be, in connection
with transfers of interest as hereinafter provided.

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

Section 2.2 Execution and Authentication

     Two Officers shall sign the Securities for the Company by manual or
facsimile signature. One Officer shall sign each Subsidiary Guarantee for each
Guarantor by manual or facsimile signature.

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

     A Security shall not be valid until an authorized signatory of the Trustee
manually authenticates the Security. The signature of the Trustee on a Security
shall be conclusive evidence that such Security has been duly and validly
authenticated and issued under this Indenture.

     The Trustee shall authenticate and deliver: (i) Initial Securities for
original issue in an aggregate principal amount of $175,000,000, (ii) if and
when issued, Additional Securities (which may be in the form of Initial
Securities or in the form of Exchange Securities) and (iii) Exchange Securities
for issue only in a registered exchange offer pursuant to the Registration
Rights Agreement, and only in exchange for Initial Securities or Additional
Securities of an equal principal amount, in each case upon a written order of
the Company signed by one Officer of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and whether the Securities are to be
in the form of Initial Securities or Exchange Securities. The Company may issue
Additional Securities under this Indenture subsequent to the Issue Date, subject
to Section 4.3 of this Indenture; provided, however, in no event may the Company
issue any Additional Securities if, as a result of any such issuance, the
aggregate principal amount of Securities outstanding would exceed the maximum
aggregate principal amount of Securities permitted under the Existing Credit
Facilities or any other Credit Facilities, in each case as in effect on the date
of such issuance.







                                       33
<PAGE>

         The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent.

Section 2.3 Registrar and Paying Agent

     The Company shall at all times maintain in the Borough of Manhattan, the
City of New York, the State of New York an office or agency where Securities may
be presented for registration of transfer or for exchange (the "Registrar") and
an office or agency where Securities may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may have one or more co-registrars and one or
more additional paying agents in the Borough of Manhattan, the City of New York,
the State of New York. The term "Registrar" includes any co-registrar, and the
term "Paying Agent" includes any such additional paying agent.

     The Company shall enter into an agreement with the initial Paying Agent and
initial Registrar evidencing its acceptance of its appointment as such in
accordance with the terms of this Indenture, which shall incorporate the terms
of the Trust Indenture Act, and the Company may enter into further agreements
with any of the Trustee, the initial Registrar and the initial Paying Agent with
respect to the allocation of responsibilities among them. The Company shall
enter into an appropriate agency agreement with any Registrar, Paying Agent or
co-registrar not a party to this Indenture, which shall incorporate the terms of
the Trust Indenture Act. The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall notify the Trustee of the
name and address of each such agent not a party to this Indenture. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee either shall
act as such in the designated corporate trust office of the Trustee in the
Borough of Manhattan, the City of New York, the State of New York, where the
Securities may be presented or surrendered for payment, in which case it shall
be entitled to appropriate compensation therefor pursuant to Section 7.7 hereof,
                                                             -----------
or the Trustee shall appoint or cause to be appointed such Registrar or Paying
Agent. The Company or any of its Subsidiaries may act as Paying Agent,
Registrar, co-registrar or transfer agent from an office in the Borough of
Manhattan, the City of New York, the State of New York. The Paying Agent or the
Registrar may resign as such upon 30 days' prior written notice to the Company
and the Trustee; upon resignation of any Paying Agent or Registrar, the Company
shall appoint a successor Paying Agent or Registrar, as the case may be,
complying with the requirements of this Section 2.3, no later than 30 days
                                        -----------
thereafter and shall provide notice to the Trustee of such successor Paying
Agent or Registrar.

     If at any time there shall be no Paying Agent with an office or agency in
the Borough of Manhattan, the City of New York, where the Securities may be
presented or surrendered for payment, the Company shall forthwith designate such
a Paying Agent in order that the Securities shall at all times be payable in the
Borough of Manhattan, the City of New York, the State of New York.

     The Company initially appoints The Bank of New York Trust Company, N.A. as
Registrar and Paying Agent for the Securities.








                                       34
<PAGE>

     The Bank of New York Trust Company, N.A. maintains an office in the Borough
of Manhattan, the City of New York, the State of New York, where Securities may
be presented or surrendered for payment which, on the Issue Date, is 101
Barclay, Lobby Level, New York, New York 10286.

Section 2.4 Paying Agent To Hold Money in Trust

     By at least 11:00 a.m. (New York City time) on the date on which any
principal, premium, if any, or interest on any Security is due and payable, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
principal, premium, if any, and interest when due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that such Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all money
held by such Paying Agent for the payment of principal, premium, if any, and
interest (if any) on the Securities and shall notify the Trustee of any default
by the Company 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 Company at any time may require a Paying
Agent (other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section 2.4, the Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money delivered to the Trustee. Upon any
bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities or, if it does not at
such time maintain an office in the Borough of Manhattan, the City of New York,
the State of New York, where Securities may be presented or surrendered for
payment, then it shall cause such a Paying Agent to be appointed.

Section 2.5 Holder Lists

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

Section 2.6 Transfer and Exchange

     (a) Transfer and Exchange of Global Securities. A Global Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Owners of
beneficial interests in Global Securities shall not be entitled to receive
Definitive Securities unless:

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







                                       35
<PAGE>

     (2) the Company in its sole discretion determines that the Global
Securities (in whole but not in part) should be exchanged for Definitive
Securities and delivers a written notice to such effect to the Trustee and the
Registrar; provided that in no event shall the Regulation S Global Security be
exchanged by the Company for Definitive Securities prior to (x) the expiration
of the Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities
Act; or

     (3) there has occurred and is continuing an Event of Default and DTC
notifies the Trustee and the Registrar of its decision to exchange the Global
Securities for Definitive Securities; provided that in no event shall the
Regulation S Global Security be exchanged by the Company for Definitive
Securities prior to (x) the expiration of the Restricted Period and (y) the
receipt by the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act.

     Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Securities shall be issued in such names as the Depositary shall
instruct the Trustee and the Registrar. Global Securities also may be exchanged
or replaced, in whole or in part, as provided in Sections 2.7 and Section 2.9
                                                 ------------     -----------
hereof. Every Security authenticated and delivered in exchange for, or in lieu
of, a Global Security or any portion thereof, pursuant to this Section 2.6,
                                                               -----------
Section 2.7 or Section 2.9 hereof, shall be authenticated and delivered in the
-----------    -----------
form of, and shall be, a Global Security. A Global Security may not be exchanged
for another Security other than as provided in this Section 2.6(a), however,
                                                    --------------
beneficial interests in a Global Security may be transferred and exchanged as
provided in Sections 2.6(b), (c) or (f) hereof.
            ---------------  ---    ---

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

     (1) Transfer of Beneficial Interests in the Same Global Security.
Beneficial interests in any Restricted Global Security may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Restricted Global Security in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that prior to the
expiration of the Restricted Period, transfers of beneficial interests in the
Regulation S Global Security may not be to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests
in any Unrestricted Global Security may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Security. No written orders or instructions shall be required to be delivered to
the Registrar to effect the transfers described in this Section 2.6(b)(1).

     (2) All Other Transfers and Exchanges of Beneficial Interests in Global
Securities. In connection with all transfers and exchanges of beneficial
interests that are not





                                       36
<PAGE>

subject to Section 2.6(b)(1) above, the transferor of such beneficial interest
           -----------------
must deliver to the Registrar either:

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

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

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

               (ii) instructions given by the Depositary to the Registrar
          containing information regarding the Person in whose name such
          Definitive Security shall be registered to effect the transfer or
          exchange referred to in Section 2.6(b)(2)(B)(i) above; provided that
                                  ----------------------
          in no event shall Definitive Securities be issued upon the transfer or
          exchange of beneficial interests in the Regulation S Global Security
          prior to (x) the expiration of the Restricted Period and (y) the
          receipt by the Registrar of any certificates required pursuant to Rule
          903 under the Securities Act. Upon consummation of a Registered
          Exchange Offer by the Company in accordance with Section 2.6(f)
                                                           --------------
          hereof, the requirements of this Section 2.6(b)(2) shall be deemed to
                                           -----------------
          have been satisfied upon receipt by the Registrar of the instructions
          contained in the Letter of Transmittal delivered by the Holder of such
          beneficial interests in the Restricted Global Securities. Upon
          satisfaction of all of the requirements for transfer or exchange of
          beneficial interests in Global Securities contained in this Indenture,
          the Securities or otherwise applicable under the Securities Act, the
          Registrar shall adjust the principal amount of the relevant Global
          Security(s) pursuant to Section 2.6(h) hereof.
                                  --------------

     (3) Transfer of Beneficial Interests to Another Restricted Global Security.
A beneficial interest in any Restricted Global Security may be transferred to a
Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Security if the transfer complies with the
requirements of Section 2.6(b)(2) above and the Registrar receives the
following:      -----------------

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



                                       37
<PAGE>

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

     (4) Transfer and Exchange of Beneficial Interests in a Restricted Global
Security for Beneficial Interests in the Unrestricted Global Security. A
beneficial interest in any Restricted Global Security may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Security or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Security if the exchange or transfer complies
with the requirements of Section 2.6(b)(2) above and:
                         -----------------

          (A) such exchange or transfer is effected pursuant to the Registered
     Exchange Offer in accordance with the Registration Rights Agreement and the
     holder of the beneficial interest to be transferred, in the case of an
     exchange, or the transferee, in the case of a transfer, certifies in the
     applicable Letter of Transmittal or via the Depositary's book-entry system
     that it is not (i) a broker-dealer, (ii) a Person participating in the
     distribution of the Exchange Securities or (iii) a Person who is an
     affiliate (as defined in Rule 144) of the Company;

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

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

          (D) the Registrar receives the following:

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

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

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

     If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Security has not yet been issued, the
Company shall issue and, upon





                                       38
<PAGE>

receipt of an Authentication Order in accordance with Section 2.2 hereof, the
Trustee shall authenticate one or more Unrestricted Global Securities in an
aggregate principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.

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

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

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

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

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

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

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

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

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

the Registrar shall cause the aggregate principal amount of the applicable
Global Security to be reduced accordingly pursuant to Section 2.6(h) hereof, and
                                                      --------------
the Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Security in the appropriate
principal amount. Any Definitive Security issued in exchange for a






                                       39
<PAGE>

beneficial interest in a Restricted Global Security pursuant to this Section
                                                                     -------
2.6(c) shall be registered in such name or names and in such authorized
------
denomination or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Definitive
Securities to the Persons in whose names such Securities are so registered. Any
Definitive Security issued in exchange for a beneficial interest in a Restricted
Global Security pursuant to this Section 2.6(c)(1) shall bear the Private
                                 -----------------
Placement Legend and shall be subject to all restrictions on transfer contained
therein. Notwithstanding Sections 2.6(c)(1)(A) and (C) hereof, a beneficial
                         ---------------------     ---
interest in the Regulation S Global Security may not be exchanged for a
Definitive Security or transferred to a Person who takes delivery thereof in the
form of a Definitive Security prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case
of a transfer pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 903 or Rule 904.

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

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

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

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

          (D) the Registrar receives the following:

               (i) if the holder of such beneficial interest in a Restricted
          Global Security proposes to exchange such beneficial interest for a
          Definitive Security that does not bear the Private Placement Legend, a
          certificate from such holder in the form of Exhibit C hereto,
                                                      ---------
          including the certifications in item (1)(b) thereof; or

               (ii) if the holder of such beneficial interest in a Restricted
          Global Security proposes to transfer such beneficial interest to a
          Person who shall take delivery thereof in the form of a Definitive
          Security that does not bear the





                                       40
<PAGE>

          Private Placement Legend, a certificate from such holder in the form
          of Exhibit B hereto, including the certifications in item (4) thereof;

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

               (3) Beneficial Interests in Unrestricted Global Securities to
          Unrestricted Definitive Securities. If any holder of a beneficial
          interest in an Unrestricted Global Security proposes to exchange such
          beneficial interest for a Definitive Security or to transfer such
          beneficial interest to a Person who takes delivery thereof in the form
          of a Definitive Security, then, upon satisfaction of the conditions
          set forth in Section 2.6(b)(3) hereof, the Registrar shall cause the
                       -----------------
          aggregate principal amount of the applicable Global Security to be
          reduced accordingly pursuant to Section 2.6(h) hereof, and the Company
                                          --------------
          shall execute and the Trustee shall authenticate and deliver to the
          Person designated in the instructions a Definitive Security in the
          appropriate principal amount. Any Definitive Security issued in
          exchange for a beneficial interest pursuant to this Section 2.6(c)(3)
                                                              -----------------
          shall be registered in such name or names and in such authorized
          denomination or denominations as the holder of such beneficial
          interest shall instruct the Registrar through instructions from the
          Depositary and the Participant or Indirect Participant. The Trustee
          shall deliver such Definitive Securities to the Persons in whose names
          such Securities are so registered. Any Definitive Security issued in
          exchange for a beneficial interest pursuant to this Section 2.6(c)(3)
                                                              -----------------
          shall not bear the Private Placement Legend.

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

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

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

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

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

                                       41
<PAGE>

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

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

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

the Trustee shall cancel the Restricted Definitive Security, the Registrar shall
increase or cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Security, in the case of
clause (B) above, the 144A Global Security, and in the case of clause (C) above,
the Regulation S Global Security.

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

          (A) such exchange or transfer is effected pursuant to the Exchange
     Offer in accordance with the Registration Rights Agreement and the Holder,
     in the case of an exchange, or the transferee, in the case of a transfer,
     certifies in the applicable Letter of Transmittal that it is not (1) a
     broker-dealer, (2) a Person participating in the distribution of the
     Exchange Securities or (3) a Person who is an affiliate (as defined in Rule
     144) of the Company;

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

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

          (D) the Registrar receives the following:

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

               (ii) if the Holder of such Definitive Securities proposes to
          transfer such Securities to a Person who shall take delivery thereof
          in the form of a beneficial interest in the Unrestricted Global
          Security, a certificate from such






                                       42
<PAGE>

          Holder in the form of Exhibit B hereto, including the certifications
          in item (4) thereof;

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

     Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.6(d)(2), the Trustee shall cancel the Definitive Securities and the
-----------------
Registrar shall increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Security.

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

     If any such exchange or transfer from a Definitive Security to a beneficial
interest is effected pursuant to subparagraphs (2)(B), (2)(D) or (3) above at a
time when an Unrestricted Global Security has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted
-----------
Global Securities in an aggregate principal amount equal to the principal amount
of Definitive Securities so transferred.

     (e) Transfer and Exchange of Definitive Securities for Definitive
Securities. Upon request by a Holder of Definitive Securities and such Holder's
compliance with the provisions of this Section 2.6(e), the Registrar shall
                                       --------------
register the transfer or exchange of Definitive Securities. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Securities duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his attorney, duly authorized in
writing. In addition, the requesting Holder shall provide any additional
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.6(e).
                                 --------------

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



                                       43
<PAGE>

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

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

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

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

          (A) such exchange or transfer is effected pursuant to the Registered
     Exchange Offer in accordance with the Registration Rights Agreement and the
     Holder, in the case of an exchange, or the transferee, in the case of a
     transfer, certifies in the applicable Letter of Transmittal that it is not
     (1) a broker-dealer, (2) a Person participating in the distribution of the
     Exchange Securities or (3) a Person who is an affiliate (as defined in Rule
     144) of the Company;

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

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

          (D) the Registrar receives the following:

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

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

and, in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the
Securities Act and state "blue sky" laws and that the





                                       44
<PAGE>

restrictions on transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the Securities Act.

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

     (f) (1) Registered Exchange Offer. Upon the occurrence of the Registered
Exchange Offer in accordance with the Registration Rights Agreement, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.2, the Trustee shall authenticate:
-----------

          (A) one or more Unrestricted Global Securities in an aggregate
     principal amount equal to the principal amount of the beneficial interests
     in the Restricted Global Securities tendered for acceptance by Persons that
     certify in the applicable Letters of Transmittal, among other things, that
     (I) they are not broker-dealers, (II) they are not participating in a
     distribution of the Exchange Securities and (III) they are not affiliates
     (as defined in Rule 144) of the Company, and accepted for exchange in the
     Registered Exchange Offer; and

          (B) Unrestricted Definitive Securities in an aggregate principal
     amount equal to the principal amount of the Restricted Definitive
     Securities accepted for exchange in the Registered Exchange Offer.

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



                  (2) If upon consummation of the Registered Exchange Offer, any
         Initial Purchaser holds Initial Securities acquired by it as part of
         the initial distribution thereof, the Company, upon written request of
         such Initial Purchaser, simultaneously with the delivery of the
         Exchange Securities pursuant to the Registered Exchange Offer shall
         issue and deliver to such Initial Purchaser and, upon receipt of an
         Authentication Order in accordance with Section 2.2 hereof, the Trustee
                                                 -----------
         shall authenticate, one or more Restricted Global Securities
         representing Private Exchange Securities in a Private Exchange for the
         Initial Securities held by such Initial Purchaser, in an aggregate
         principal amount equal to the Initial Securities so exchanged by such
         Initial Purchaser in the Private Exchange.

     (g) Legends. The following legends shall appear on the face of all Global
Securities and Definitive Securities issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.




                                       45
<PAGE>


     (1)  Private Placement Legend.

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

          "THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
     TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT
     OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD
     OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
     APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
     NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION
     FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
     144A THEREUNDER.

          THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
     (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
     ONLY TO THE COMPANY OR (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
     REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
     144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
     RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
     ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN
     EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
     THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
     STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN
     ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
     STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
     NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
     REFERRED TO IN (A) ABOVE."

          (B) Notwithstanding the foregoing, any Global Security or Definitive
     Security issued pursuant to subparagraphs (b)(4), (c)(2), (c)(3), (d)(2),
     (d)(3), (e)(2), (e)(3) or (f) to this Section 2.6 (and all Securities
                                           -----------
     issued in exchange therefor or substitution thereof) shall not bear the
     Private Placement Legend.






                                       46
<PAGE>


     (2) Global Security Legend. Each Global Security shall bear a legend in
substantially the following form:

          "THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
     INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
     THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
     ANY CIRCUMSTANCES EXCEPT THAT (I) THE REGISTRAR MAY MAKE SUCH NOTATIONS
     HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II)
                                           -----------
     THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
     SECTION 2.6(a) OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE
     --------------
     DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE
                                                           ------------
     INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR
     DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

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




                                       47
<PAGE>


(h) Cancellation and/or Adjustment of Global Securities. At such time as all
beneficial interests in a particular Global Security have been exchanged for
Definitive Securities or a particular Global Security has been redeemed,
repurchased or canceled in whole and not in part, each such Global Security
shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.10 hereof. At any time prior to such cancellation, if any beneficial
------------
interest in a Global Security is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Security or for Definitive Securities, the principal amount of Securities
represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on such Global Security by the Registrar or by the
Depositary at the direction of the Registrar to reflect such reduction; and if
the beneficial interest is being exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Security, such other Global Security shall be increased accordingly and
an endorsement shall be made on such Global Security by the Registrar or by the
Depositary at the direction of the Registrar to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges.

     (1) To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Global Securities and Definitive
Securities upon the Company's order or at the Registrar's request.

     (2) No service charge shall be made to a holder of a beneficial interest in
a Global Security or to a Holder of a Definitive Security for any registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge or other fee required
by law and payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant to
Sections 2.9 , 3.6, 3.7, 4.7 and 4.11 hereof).
----------------------------     ----

     (3) The Registrar or co-registrar shall not be required to register the
transfer of or exchange of (A) any Definitive Security selected for redemption
in whole or in part pursuant to Article III hereof, except the unredeemed
                                -----------
portion of any Definitive Security being redeemed in part or (B) any Security
for a period beginning (1) 15 Business Days before the mailing of a notice of an
offer to repurchase or redeem Securities and ending at the close of business on
the day of such mailing or (2) 15 Business Days before an Interest Payment Date
and ending on such Interest Payment Date.

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

     (5) None of the Company, the Trustee or the Registrar shall be required (A)
to issue, to register the transfer of or to exchange any Securities during a
period of 15 days before the day of any selection of Securities for redemption
under Section 3.2 hereof and ending at the close of business on the day of
      -----------
selection, (B) to register the transfer of or to exchange any Securities so
selected for redemption in whole or in part, except the unredeemed portion of
any







                                       48
<PAGE>


Security being redeemed in part or (C) to register the transfer of or to
exchange a Security between a record date and the next succeeding Interest
Payment Date.

     (6) Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the Person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal, interest and premium (if any) on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.

     (7)  The  Trustee  shall  authenticate  Global  Securities  and  Definitive
Securities in accordance with the provisions of Section 2.2 hereof.
                                                -----------

     (8) All certifications, certificates and Opinions of Counsel required to be
submitted to the Registrar pursuant to this Section 2.6 to effect a registration
                                            -----------
of transfer or exchange may be submitted by facsimile.

Section 2.7 Replacement Securities

     If any mutilated Security is surrendered to the Registrar or the Company
and the Registrar receives evidence to their satisfaction of the destruction,
loss or theft of any Security, the Company will issue and the Trustee, upon
receipt of a written order of the Company conforming to Section 2.2 hereof, will
                                                        -----------
authenticate a replacement Security if the Registrar's and the Company's
reasonable requirements are met. If required by the Registrar or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Registrar, the Trustee and the Company to protect the Company, the
Trustee, the Registrar, any other Agent and any Authenticating Agent from any
loss that any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.

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

Section 2.8 Outstanding Securities

     The Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 11.6 hereof, a
                                                        ------------
Security does not cease to be outstanding because the Company or an Affiliate of
the Company holds the Security.

     If a Security is replaced pursuant to Section 2.7 hereof, it ceases to be
                                           -----------
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.



                                       49

<PAGE>

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

     If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a Redemption Date or maturity date, money sufficient
to pay Securities payable on that date, then on and after that date such
Securities will be deemed to be no longer outstanding and will cease to accrue
interest.

Section 2.9 Temporary Securities

     Until Definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of Definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate Definitive Securities in exchange for temporary Securities. Holders
of temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as a holder of Definitive Securities.

Section 2.10 Cancellation

     The Company at any time may deliver Securities to the Trustee or any
Registrar for cancellation. The Registrar and the Paying Agent shall forward to
the Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee or the Registrar and no one else shall cancel
and destroy (subject to the record retention requirements of the Exchange Act)
all Securities surrendered for registration of transfer, exchange, payment,
replacement or cancellation and deliver a certificate of such destruction to the
Company unless the Company directs the Trustee and the Registrar to deliver
canceled Securities to the Company. The Company may not issue new Securities to
replace Securities it has redeemed, paid or delivered to the Trustee or the
Registrar for cancellation.

Section 2.11 Defaulted Interest

     If the Company defaults in a payment of interest ("Defaulted Interest") on
the Securities, the Company shall pay Defaulted Interest (as provided in Section
                                                                         -------
4.1) in any lawful manner. The Company may pay the Defaulted Interest to the
---
Persons who are Holders on a subsequent special record date. The Company shall
fix or cause to be fixed (or upon the Company's failure to do so the Trustee
shall fix pursuant to a written instruction of Holders of at least a majority in
principal amount of the Securities) any such special record date and payment
date to the reasonable satisfaction of the Trustee which special record date
shall not be less than 10 days prior to the payment date for such Defaulted
Interest and the Company, or at the Company's request, the Trustee, shall
promptly mail or cause to be mailed to each Holder a notice that states the
special record date, the payment date and the amount of Defaulted Interest to be
paid. The Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when so
deposited to be




                                       50
<PAGE>

held in trust for the benefit of the Persons entitled to such Defaulted Interest
as provided in this Section 2.11. Section 2.12 CUSIP Numbers
                    ------------

     The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers 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 Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.

                                  ARTICLE III

                                   REDEMPTION

Section 3.1 Notices to Trustee

     If the Company elects to redeem Securities pursuant to Section 3.7 hereof,
                                                            -----------
it shall notify the Trustee in writing of the Redemption Date and the principal
amount of Securities to be redeemed.

     The Company shall give each notice to the Trustee and the Registrar
provided for in this Section 3.1 at least 60 days before the Redemption Date
                     -----------
unless the Trustee consents to a shorter period. Such notice shall be
accompanied by an Officers' Certificate to the effect that such redemption will
comply with the conditions herein. If fewer than all the Securities are to be
redeemed, the record date relating to such redemption shall be selected by the
Company and set forth in the related notice given to the Trustee, which record
date shall be not less than 15 days after the date of such notice.

Section 3.2 Selection of Securities To Be Redeemed

     In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed or, if the Securities are not listed, then on a pro rata basis and in
such manner as complies with applicable legal requirements. The Trustee shall
make the selection from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed. The Trustee may rely upon information provided by the
Registrar for purposes of this Section 3.2.
                               -----------




                                       51
<PAGE>


Section 3.3 Notice of Redemption

     At least 30 days but not more than 60 days before a date for redemption of
Securities, the Company shall mail a notice of redemption by first-class mail to
each Holder of Securities to be redeemed at such Holder's registered address.

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

     (1) the Redemption Date;

     (2) the Redemption Price;

     (3) the name and address of the Paying Agent where Securities are to be
surrendered;

     (4) that Securities called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;

     (5) if fewer than all the outstanding Securities are to be redeemed, the
identification and principal amounts of the particular Securities to be
redeemed;

     (6) that, unless the Company defaults in making such redemption payment,
interest on Securities (or portion thereof) called for redemption ceases to
accrue on and after the Redemption Date;

     (7) the CUSIP number, if any, printed on the Securities being redeemed; and

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

     At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section 3.3.
                                                                -----------

Section 3.4 Effect of Notice of Redemption

     Once notice of redemption is mailed to Holders, Securities (or portions
thereof) called for redemption become irrevocably due and payable on the
Redemption Date and at the Redemption Price stated in the notice. A notice of
redemption may not be conditional. Upon surrender to the Paying Agent, such
Securities shall be paid at the Redemption Price stated in the notice, plus
accrued interest to the Redemption Date; provided that if the Redemption Date is
on or after a regular record date and on or prior to the Interest Payment Date,
the accrued and unpaid interest shall be payable to the Holder of the redeemed
Securities registered on the relevant record date. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the notice
to any other Holder.



                                       52
<PAGE>

Section 3.5       Deposit of Redemption Price

         No later than 11:00 a.m. (New York City time) on the date on which any
principal, interest and premium (if any) on any Security is due and payable, the
Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary
is the Paying Agent, shall segregate and hold in trust) money sufficient to pay
the Redemption Price of and accrued interest on all Securities to be redeemed on
that date other than Securities or portions of Securities called for redemption
which are owned by the Company or a Subsidiary and have been delivered by the
Company or such Subsidiary to the Trustee for cancellation. If the Company
complies with the provisions of this paragraph, then on and after the Redemption
Date, interest will cease to accrue on the Securities or the portions of
Securities called for redemption.

Section 3.6 Securities Redeemed in Part

     Upon cancellation of a Security that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder (at the Company's
expense) a new Security equal in principal amount to the unredeemed portion of
the Security surrendered. The Trustee shall notify the Registrar of the issuance
of such new Security.

Section 3.7 Optional Redemption

     (a) On and after April 1, 2008, the Company may redeem all or a part of the
Securities at any time or from time to time upon not less than 30 nor more than
60 days' notice at the following Redemption Prices (expressed as percentages of
the principal amount) plus accrued and unpaid interest on the Securities, if
any, to the applicable Redemption Date (subject to the right of Holders of
record on the relevant regular record date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date), if redeemed
during the 12-month period beginning April 1 of the years indicated:

Year                                                      Redemption Price
2008..............................................             103.563%
2009..............................................             101.781%
2010 and thereafter...............................             100.000%

     (b) On or prior to April 1, 2007, the Company may on one or more occasions
redeem up to an aggregate amount equal to 35% of the aggregate principal amount
of the Securities (including Additional Securities) originally issued prior to
the Redemption Date under this Indenture at a Redemption Price of 107.125% of
the principal amount of the Securities, plus 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 the relevant Interest Payment
Date) with the Net Cash Proceeds of one or more Equity Offerings; provided, that
(i) at least 65% in aggregate principal amount of the Securities (including any
Additional Securities) originally issued remains outstanding immediately after
the occurrence of such redemption (excluding Securities held by the Company and
its Subsidiaries) and (ii) each such redemption occurs within 90 days of the
date of the closing of the related Equity Offering.



                                       53
<PAGE>

     (c) Any redemption pursuant to this Section 3.7 shall be made pursuant to
                                         -----------
the provisions of Section 3.1 through 3.6 hereof.
                  -----------         ---

                                   ARTICLE IV

                                    COVENANTS

Section 4.1 Payment of Securities

     The Company covenants and agrees for the benefit of the Holders of the
Securities that it shall promptly pay the principal of, premium, if any, and
interest on the Securities on the dates and in the manner provided in the
Securities and in this Indenture. Payments of principal, premium, if any and
interest on the Securities shall be deemed due for all purposes under this
Indenture whether such payments are due at Stated Maturity, upon optional
redemption, upon required repurchase pursuant to Sections 4.7 or 4.11 hereof,
                                                 ------------    ----
upon declaration or otherwise. Principal, premium, if any, and interest on the
Securities shall be considered paid on the date due if on such date the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal, premium, if any, and interest then due.

     The Company will pay, to the extent lawful, interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, at the rate then in effect on the Securities to
the extent lawful; it will pay, to the extent lawful, interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods), from
time to time on demand at the same rate as on overdue principal.

     All references in this Indenture, the Securities or the Subsidiary
Guarantees to interest shall be deemed to include Additional Interest.

Section 4.2 SEC Reports

     Whether or not required by the SEC, so long as any Notes are outstanding,
the Company will furnish to the Holders of Securities, within the time periods
specified in the SEC' s rules and regulations:

     (1) all quarterly and annual financial information 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 section on "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report on the annual financial
statements by the Company's certified independent public 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.

     If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the







                                       54
<PAGE>

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

     In addition, whether or not required by the SEC, the Company will file a
copy of all of the information and reports referred to in clause (1) and (2)
above 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 addition, the Company agrees that, for so long as any Securities remain
outstanding, if at any time it is not required to file with the SEC the reports
required by the preceding paragraphs, it will furnish to Holders of Securities
and to prospective investors, upon request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Section 4.3 Incurrence of Indebtedness

     (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt); provided, however, that the Company and any Guarantor may incur
Indebtedness (including Acquired Debt), if the Fixed Charge Coverage Ratio for
the Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred would have been at least 2.5 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred at the
beginning of such four-quarter period.

     (b) The foregoing paragraph (a) of this Section 4.3 will not prohibit the
                                             -----------
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Indebtedness"):

     (1) the incurrence by the Company and any Guarantor of the Indebtedness
under Credit Facilities; provided that the aggregate principal amount of all
Indebtedness of the Company and the Guarantors outstanding at any time under
this clause (1) under all Credit Facilities after giving effect to such
incurrence does not exceed an amount equal to the greater of (A) $100.0 million
less the aggregate amount of all permanent principal repayments since the Issue
Date under a Credit Facility that are made under clause (b)(1) of Section 4.7
                                                                  -----------
hereof and (B) 20% of ACNTA as of the date of such incurrence;

     (2) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness (other than Indebtedness described under clause (1), (3)
or (6) of this paragraph (b));

     (3) the incurrence by the Company and the Guarantors of Indebtedness
represented by (A) the Initial Securities and the Subsidiary Guarantees, and (B)
any Securities issued pursuant to the Registration Rights Agreement in exchange
for the Securities, and any Subsidiary Guarantees related thereto;






                                       55
<PAGE>

     (4) the incurrence by the Company or any of its Restricted Subsidiaries of
Non-Recourse Purchase Money Indebtedness;

     (5) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance or replace, Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred under
paragraph (a) of this Section 4.3 covenant or clause (2), (3), (4) or this
                      -----------
clause (5) of this paragraph (b);

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

          (A) (i) if the Company is the obligor on such Indebtedness, such
     Indebtedness must be expressly subordinated to the prior payment in full in
     cash of all obligations with respect to the Notes, and (ii) if a Guarantor
     is the obligor of such Indebtedness, such Indebtedness must be expressly
     subordinated to the prior payment in full in cash of all obligations of
     such Guarantor with respect to its Subsidiary Guarantee, 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 thereof and (ii) any sale or other
     transfer of any such Indebtedness to a Person that is not either the
     Company or a Restricted Subsidiary thereof, shall be deemed, in each case,
     to constitute an incurrence of such Indebtedness by the Company or such
     Restricted Subsidiary, as the case may be, that was not permitted by this
     clause;

     (7) in-kind obligations relating to net oil and natural gas balancing
positions arising in the ordinary course of business;

     (8) the accrual of interest 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, in the form of additional shares of the same class of Disqualified Stock;

     (9) any obligations in respect of completion bonds, performance bonds, bid
bonds, appeal bonds, surety bonds, bankers acceptances, letters of credit,
insurance obligations or bonds and other similar bonds and obligations incurred
by the Company or any Restricted Subsidiary in the ordinary course of business
and any guaranties or letters of credit functioning as or supporting any of the
foregoing bonds or obligations;

     (10) any obligation under Interest Rate Agreements, Currency Agreements and
Commodity Agreements; provided, that such Interest Rate Agreements, Currency
Agreements and Commodity Agreements are related to business transactions of the
Company or its Restricted Subsidiaries and are entered into for bona fide
hedging purposes of the Company or its Restricted Subsidiaries (as determined in
good faith by the Board of Directors or senior management of the Company);




                                       56

<PAGE>

     (11) any obligation arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, guarantee, adjustment of purchase
price, holdback, contingency payment obligation based on the performance of the
acquired or disposed asset or similar obligations, in each case, incurred or
assumed in connection with the acquisition or disposition of any business, asset
or Capital Stock of a Restricted Subsidiary;

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

     (13) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness in addition to Indebtedness permitted by clauses (1) through (12)
above of this paragraph (b) or paragraph (a) of this Section 4.3 above in an
                                                     -----------
aggregate principal amount (or accrued value, as applicable) at any time
outstanding not to exceed $25.0 million.

     (c)  For purposes of determining compliance with this Section 4.3:
                                                           -----------
          (1) in the event that an item of proposed Indebtedness meets the
     criteria of more than one of the categories of Permitted Indebtedness
     described in clauses (1) through (13) of paragraph (b) above, or is
     entitled to be incurred pursuant to paragraph (a) of this Section 4.3, the
                                                               -----------
     Company will be permitted to classify such item of Indebtedness (or any
     portion thereof) on the date of its incurrence in any manner that complies
     with this covenant, and only be required to include the amount and type of
     such Indebtedness in one of such clauses;

          (2) all Indebtedness outstanding on the date of this Indenture under
     the Credit Facilities shall be deemed initially incurred on the Issue Date
     under clause (1) of paragraph (b) of this Section 4.3 and not paragraph (a)
     of this Section 4.3 or clause (2) of paragraph (b) of this Section 4.3;
             -----------                                        -----------

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

          (4) if obligations in respect of letters of credit are incurred
     pursuant to the Credit Facility and are being treated as incurred pursuant
     to paragraph (b)(1) above and the letters of credit relate to other
     Indebtedness, then such other Indebtedness shall not be included;

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

          (6) the amount of Indebtedness issued at a price that is less than the
     principal amount thereof will be equal to the amount of the liability in
     respect thereof determined in accordance with GAAP; and



                                       57
<PAGE>

          (7) Indebtedness of any Person existing at the time such Person
     becomes a Restricted Subsidiary shall be deemed to have been incurred by
     the Company and the Restricted Subsidiary at the time such Person becomes a
     Restricted Subsidiary.

     (d) For purposes of determining compliance with any U.S. dollar-denominated
restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent
principal amount of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in effect on the date
such Indebtedness was incurred, in the case of term Indebtedness, or first
committed, in the case of revolving credit Indebtedness; provided that if such
Indebtedness is incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable U.S.
dollar-dominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-dominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced. Notwithstanding any
other provision of this covenant, the maximum amount of Indebtedness that the
Company may incur pursuant to this covenant shall not be deemed to be exceeded
solely as a result of fluctuations in the exchange rate of currencies. The
principal amount of any Permitted Refinancing Indebtedness, if incurred in a
different currency from the Indebtedness being refinanced, shall be calculated
based on the currency exchange rate applicable to the currencies in which such
Permitted Refinancing Indebtedness is denominated that is in effect on the date
of such refinancing.

Section 4.4 Restricted Payments

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

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

          (3) make any payment on or with respect to, or purchase, redeem,
     defease or otherwise acquire or retire for value, prior to scheduled
     maturity or scheduled sinking fund payment, any Subordinated Indebtedness
     of the Company or any of its Restricted Subsidiaries, except a payment of
     interest or principal at the Stated Maturity thereof; or






                                       58
<PAGE>

          (4) make any Investment other than a Permitted Investment (all such
     payments and other actions set forth in clauses (1) through (3) above and
     this clause (4) being collectively referred to as "Restricted Payments"),

     (b) unless, at the time of and after giving effect to such Restricted
Payment:

     (1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;

     (2) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.3(a) hereof; and
                                 -------------

     (3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the Issue Date (excluding Restricted Payments permitted by clauses (2),
(3), (4), (6), (7) and (9) of the next succeeding paragraph (c) below, but
including Restricted Payments permitted by clauses (1), (5) and (8) of such
paragraph), is less than the sum, without duplication, of

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

          (B) 100% of the aggregate Net Cash Proceeds and 100% of the Fair
     Market Value of securities or other property other than cash (including
     Capital Stock of Persons engaged in the Oil and Gas Business that become
     Restricted Subsidiaries or assets used in the Oil and Gas Business)
     received by the Company since the Issue Date from the issue or sale of
     Equity Interests of the Company (other than Disqualified Stock), other than
     Equity Interests (or Disqualified Stock or debt securities) sold to a
     Subsidiary of the Company and other than an issuance or sale to an employee
     stock ownership plan or to a trust established by the Company or any of its
     Subsidiaries for the benefit of their employees, plus

          (C) the aggregate Net Cash Proceeds received by the Company subsequent
     to the Issue Date from the issue or sale of any Capital Stock of the
     Company (other than Disqualified Stock) to an Employee Stock Purchase
     Program; provided, however, that if an Employee Stock Purchase Program
     incurs any Indebtedness to finance the purchase of such Capital Stock, such
     aggregate amount will be limited to the excess of such Net Cash Proceeds
     over the amount of such Indebtedness plus an amount equal to any increase
     in the Consolidated Net Worth of the Company resulting from principal
     repayments made by an Employee Stock Purchase Program with respect to such
     Indebtedness; plus







                                       59
<PAGE>

          (D) the amount by which Indebtedness is reduced on the Company's
     consolidated balance sheet upon the conversion or exchange (other than by a
     Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness
     convertible or exchangeable for Capital Stock (other than Disqualified
     Stock) of the Company (plus the amount of any accrued interest then
     outstanding on such Indebtedness to the extent the obligation to pay such
     interest is extinguished less the amount of any cash, or the fair market
     value of any property (as determined in good faith by an Officer of the
     Company), distributed by the Company upon such conversion or exchange);
     provided, however, that the foregoing amount shall not exceed the Net Cash
     Proceeds received by the Company or any Restricted Subsidiary from the sale
     of such Indebtedness (excluding Net Cash Proceeds from sales to a
     Subsidiary of the Company or to an employee stock ownership plan or to a
     trust established by the Company or any of its Subsidiaries for the benefit
     of their employees); plus

          (E) an amount equal to the sum of (i) the net reduction in the
     Investments (other than Permitted Investments) made by the Company or any
     Restricted Subsidiary in any Person resulting from repurchases, repayments
     or redemptions of such Investments by such Person, proceeds realized on the
     sale of such Investment and proceeds representing the return of capital
     (excluding dividends and distributions), in each case received by the
     Company or any Restricted Subsidiary, and (ii) to the extent such Person is
     an Unrestricted Subsidiary, the portion (proportionate to the Company's
     equity interest in such Subsidiary) of the Fair Market Value of the net
     assets of such Unrestricted Subsidiary at the time such Unrestricted
     Subsidiary is designated a Restricted Subsidiary; provided, however, that
     to the extent the foregoing sum exceeds, in the case of any such Person or
     Unrestricted Subsidiary, the amount of Investments (excluding Permitted
     Investments) previously made (and treated as a Restricted Payment) by the
     Company or any Restricted Subsidiary in such Person or Unrestricted
     Subsidiary, such excess shall not be included in this clause (E) unless the
     amount represented by such excess has not been and will not be taken into
     account in one of the foregoing clauses (A)-(D) of this paragraph (b)(3);
     plus

          (F) $10.0 million.

(c)  The preceding provisions will not prohibit:

     (1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture (and such payment shall be deemed
to be paid on the date of payment for purposes of any calculation required by
this covenant);

     (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 or any Restricted Subsidiary in exchange for, or
out of the Net Cash Proceeds of the substantially concurrent sale (other than to
a Subsidiary of the Company) of, Equity Interests of the Company (other than
Disqualified Stock); provided that the amount of any such Net Cash Proceeds that
are utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (3)(B) of the preceding
paragraph (b);



                                       60
<PAGE>

     (3) the defeasance, redemption, repurchase, retirement or other acquisition
of (a) the 8?% Senior Subordinated Notes due 2006 of the Company outstanding on
the Issue Date, plus the applicable premium thereon, out of the net proceeds of
the sale of the Initial Securities, or (b) other Subordinated Indebtedness of
the Company or any Guarantor with the Net Cash Proceeds from an incurrence of
any Subordinated Indebtedness permitted to be incurred under Section 4.3 hereof;
                                                             -----------

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

     (5) so long as no Default has occurred and is continuing, the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company or any Restricted Subsidiary of the Company held by any
employees, former employees, directors or former directors of Company or any of
its Restricted Subsidiaries (or heirs, estates or other permitted transferees of
such employees or directors) pursuant to any agreements (including employment
agreements), management equity subscription agreement or stock option agreements
or plans (or amendments thereto), approved by the Board of Directors, under
which such individuals purchase or sell or are granted the right to purchase or
sell shares of Capital Stock; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $2.0 million in any twelve-month period;

     (6) so long as no Default has occurred and is continuing, loans or advances
to employees of the Company or employees or directors of any Subsidiary of the
Company, in each case as permitted by Section 402 of the Sarbanes-Oxley Act of
2002, the proceeds of which are used to purchase Capital Stock of the Company,
or to refinance loans or advances made pursuant to this clause (6), in an
aggregate amount not in excess of $1.0 million at any one time outstanding;

     (7) repurchases or other acquisitions for value of Capital Stock deemed to
occur upon the exercise or exchange of stock options, warrants or other
convertible securities if such Capital Stock represents a portion of the
exercise or exchange price thereof or made in lieu of withholding taxes in
connection with any such exercise or exchange; provided, however, that the
aggregate amount of such repurchases, redemption or acquisitions to satisfy
federal income tax obligations shall not exceed $2.0 million in any twelve-month
period;

     (8) so long as no Default has occurred and is continuing, upon the
occurrence of a Change of Control or an Asset Sale and within 60 days after the
completion of the offer to repurchase the Notes under Section 4.11 or Section
                                                      ------------    -------
4.7 hereof (including the purchase of all Notes tendered), any purchase,
---
repurchase, redemption, defeasance, acquisition or other retirement for value of
Subordinated Obligations required under the terms thereof as a result of such
Change of Control or Asset Sale at a purchase or redemption price not to exceed
101% of the outstanding principal amount thereof, plus accrued and unpaid
interest thereon, if any, provided that, in the notice to Holders relating to a
Change of Control hereunder, the Company shall describe this clause (8); or

     (9) so long as no Default has occurred or is continuing, the purchase by
the Company of fractional shares arising out of stock dividends, splits or
business combinations.






                                       61
<PAGE>

     The amount of all Restricted Payments (other than cash) shall 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 such Restricted
Subsidiary, 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 at the
time of such Restricted Payment by this covenant shall be evidenced by an
Officers' Certificate to be delivered to the Trustee. Not later than five
Business Days following the date of the making of any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted, together with a copy of any related resolution
of the Board of Directors.

     For purposes of determining compliance with this Section 4.4, if a
                                                      -----------
Restricted Payment meets the criteria of more than one of the types of
Restricted Payments described in clauses (1)-(9) above, the Company, in its sole
discretion, may order and classify such Restricted Payment in any manner in
compliance with this covenant.

     In computing Consolidated Net Income under clause (b)(3)(A) above, (1) the
Company shall use audited financial statements for the portions of the relevant
period for which audited financial statements are available on the date of
determination and unaudited financial statements and other current financial
data based on the books and records of the Company for the remaining portion of
such period and (2) the Company shall be permitted to rely in good faith on the
financial statements and other financial data derived from the books and records
of the Company that are available on the date of determination.

Section 4.5 Liens

     The Company will not, and will not permit any of its Restricted
Subsidiaries to create, incur, assume or suffer to exist any Lien on any
property or asset now owned or hereafter acquired, or any income or profits
therefrom or assign or convey any right to receive income therefrom, except
Permitted Liens, to secure (a) any Indebtedness of the Company unless prior to,
or contemporaneously therewith, the Securities are equally and ratably secured
for so long as such other Indebtedness is so secured, or (b) any Indebtedness of
any Guarantor, unless prior to, or contemporaneously therewith, the Subsidiary
Guarantee of such Guarantor is equally and ratably secured for so long as such
other Indebtedness is so secured; provided, however, that if such Indebtedness
is expressly subordinated to the Securities or a Subsidiary Guarantee, the Lien
securing such Indebtedness will be subordinated and junior to the Lien securing
the Securities or such Subsidiary Guarantee, as the case may be, with the same
relative priority as such Indebtedness has with respect to the Securities or
such Subsidiary Guarantee.

Section 4.6 Dividend and Other Payment Restrictions Affecting Subsidiaries

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

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



                                       62
<PAGE>

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

     (3) transfer any of its properties or assets to the Company or any of the
Company's Restricted Subsidiaries.

     (b) However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:

     (1) agreements existing on the Issue Date, including the Existing Credit
Facilities as in effect on the Issue Date;

     (2) 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 was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of the Indenture to be incurred;

     (3) any agreement for the sale or other disposition of Capital Stock or
assets of a Restricted Subsidiary that restricts distributions by such
Restricted Subsidiary pending such sale or other disposition;

     (4) any amendment, restatement, modification, supplement, extension,
renewal, refunding, replacement or refinancing of Indebtedness referred to in
clauses (1) or (2) of this paragraph (b), provided that the encumbrances or
restrictions contained in the agreements governing the foregoing are no more
materially restrictive, taken as a whole, than those contained in the agreements
governing such Indebtedness;

     (5) restrictions on cash or other deposits by parties under agreements
entered into in the ordinary course of the Oil and Gas Business of the types
described in the definition of Permitted Business Investments; and

     (6) with respect to clause (3) of the preceding paragraph (a) only, any of
the following encumbrances or restrictions:

          (A) customary non-assignment provisions in leases entered into in the
     ordinary course of business;

          (B) purchase money obligations for property acquired in the ordinary
     course of business that impose restrictions on the property so acquired;

          (C) Permitted Liens or Liens securing Indebtedness otherwise permitted
     to be incurred pursuant to the provisions of Section 4.5 hereof that limit
                                                  -----------
     the right of the Company or any of its Restricted Subsidiaries to dispose
     of the assets subject to such Lien;



                                       63
<PAGE>

          (D) customary restrictions contained in asset sale agreements limiting
     the transfer of such assets pending the closing of such sale;

          (E) customary restrictions on the subletting, assignment or transfer
     of any property or asset that is subject to a lease, license, sub-license
     or similar contract, or the assignment or transfer of any such lease,
     license, sub-license or other contract; and

          (F) customary restrictions on the disposition or distribution of
     assets or property in agreements entered into the ordinary course of
     business of the Oil and Gas Business of the types described in the
     definition of Permitted Business Investments.

Section 4.7 Asset Sales

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

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

     (2) at least 75% of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of cash or Cash Equivalents. For
purposes of this provision, each of the following shall 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 Restricted
     Subsidiary (other than contingent liabilities and liabilities that are by
     their terms subordinated to the Notes or any Subsidiary Guarantee) that are
     assumed by the transferee of any such assets pursuant to a customary
     novation agreement or similar agreement that releases the Company or such
     Restricted Subsidiary from further liability; and

          (B) any securities, notes or other obligations received by the Company
     or any such Restricted Subsidiary from such transferee that are converted
     within 120 days by the Company or such Restricted Subsidiary into cash (to
     the extent of the cash received in that conversion).

     (b) Within the later of (x) one year after the date of receipt of any Net
Proceeds from an Asset Sale and (y) six months after the date of an agreement
entered into within such one-year period committing the Company to make an
acquisition or expenditure referred to in clauses (2) or (3) below, the Company
may apply such Net Proceeds at its option, in any one or more of the following:



                                       64
<PAGE>

     (1) to permanently repay, prepay, redeem or repurchase the Senior Debt of
the Company or any Guarantor, and cause any related loan commitment to be
permanently reduced in an amount equal to the principal amount so repaid,
prepaid, redeemed or repurchased;

     (2) to acquire all or substantially all of the assets of, or a majority of
the Voting Stock of, a Company principally engaged in the Oil and Gas Business
or to acquire additional Capital Stock in any Person that at such time is a
Restricted Subsidiary; or

     (3) to make capital expenditures or to acquire properties or assets, in
each case that are used or useful in the Oil and Gas Business.

     Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner not prohibited by this Indenture.

     (c) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will make
an offer (the "Asset Sale Offer") to all Holders of Securities and, to the
extent required by the terms thereof, all holders of other Indebtedness that is
pari passu with the Securities containing provisions similar to those set forth
in this Indenture with respect to offers to purchase or redeem with the proceeds
of sales of assets to purchase the maximum principal amount of Securities and
such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of
principal amount (or accreted value in the case of any such other pari passu
Indebtedness issued with a significant original issue discount) plus accrued and
unpaid interest, if any, to the date of purchase (the "Asset Sale Payment"), and
will be payable in cash. If any Excess Proceeds remain after consummation of an
Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Securities and such other pari passu Indebtedness tendered into such Asset Sale
Offer exceeds the amount of Excess Proceeds, the Trustee shall select the
Securities and such other pari passu Indebtedness to be purchased on a pro rata
basis, on the basis of the aggregate principal amounts (or accreted values)
tendered in round denominations (which in the case of the Securities will be
denominations of $1,000 principal amount or multiples thereof). Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

     (d) Within 30 days following the date when the Company becomes obligated to
make an Asset Sale Offer, the Company will mail a notice to each Holder
describing the transaction or transactions that constitute the Asset Sale and
offering to repurchase Securities on the date (the "Asset Sale Payment Date")
specified in such notice, which date will be no earlier than 30 days nor later
than 60 days from the date such notice is mailed, pursuant to the procedures
required by this Indenture and described in such notice.

     (e) On the Asset Sale Payment Date, the Company will, to the extent lawful:

          (1) accept for payment all Securities or portions thereof properly
     tendered pursuant to the Asset Sale Offer, subject to proration based on
     the amount of Excess Proceeds pursuant to clause (c) above of this Section
                                                                        -------
     4.7;
     ---

          (2) deposit with the Paying Agent an amount equal to the amount of
     Excess Proceeds that, after giving effect to proration with holders of pari
     passu Indebtedness pursuant to







                                       65
<PAGE>

     clause (c) above of this Section 4.7, is allocable to the Securities or
                              -----------
     portions thereof so tendered (or, if less, the aggregate Asset Sale Payment
     for all Securities validly tendered and not withdrawn); and

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

     (f) The Paying Agent will promptly mail to each Holder of Securities so
tendered and not withdrawn and accepted for payment in accordance with this
Section 4.7, the Asset Sale Payment for such tendered Securities, and the
-----------
Trustee will promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Security equal in principal amount to any
unpurchased portion of the Securities surrendered, if any, by such Holder;
provided that each such new Security will be in a principal amount of $1,000 or
an integral multiple thereof.

     (g) If the Asset Sale Offer Purchase Date is on or after an interest
payment record date and on or before the related Interest Payment Date, any
accrued and unpaid interest will be paid to the Person in whose name a Security
is registered at the close of business on such record date, and no other
interest will be payable to Holders who tender Securities pursuant to the Asset
Sale Offer.

     (h) The Company will comply with the requirements of Rule 14e-l under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with an Asset Sale
Offer. To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section 4.7, the Company will comply with
the applicable securities laws and regulations and will not be deemed to have
breached its obligations under this covenant by virtue of the Company's
compliance with such securities laws or regulations.

Section 4.8 Transactions With Affiliates

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

     (1) such 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 at the time of such transaction in arm's-length dealings by the
Company or such Restricted Subsidiary with a Person who is not an Affiliate; and

          (2) (A) with respect to any Affiliate Transaction or series of related
     Affiliate(s) Transactions involving aggregate consideration in excess of
     $5.0 million, a majority of the disinterested members of the Board of
     Directors have determined that the criteria set forth in clause (a)(1) of
     this Section 4.8 are satisfied with respect to such Affiliate
          -----------
     Transaction(s) and have approved such Affiliate Transaction(s), as
     evidenced by





                                       66
<PAGE>

     a Board Resolution delivered to the Trustee and certified by an Officers'
     Certificate as having been adopted by the Board of Directors; and

          (B) with respect to any Affiliate Transaction or series of related
     Affiliate Transactions involving aggregate consideration in excess of $20.0
     million, the Company delivers to the Trustee a written opinion that such
     Affiliate Transaction(s) is fair, from a financial point of view, to the
     Company and its Restricted Subsidiaries, taken as a whole, or that such
     Affiliate Transaction(s), is not less favorable to the Company and its
     Restricted Subsidiaries than could reasonably be expected to be obtained at
     the time in an arm's-length transaction with a Person who is not an
     Affiliate, in either such case issued by an accounting, appraisal or
     investment banking firm of national standing that is not an Affiliate of
     the Company.

     (b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.8(a) hereof:
                                                         -------------

     (1) any employment agreement or other employee compensation plan or
arrangement existing on the Issue Date or thereafter entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted Subsidiary;

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

     (3) Investments (other than Permitted Investments) or Restricted Payments
that, in each case, are permitted by Section 4.4 hereof;
                                     -----------

     (4) loans or advances to employees, officers or directors in the ordinary
course of business of the Company or any of its Restricted Subsidiaries, in each
case only as permitted by Section 402 of the Sarbanes-Oxley Act of 2002, but in
any event not to exceed $1.0 million in the aggregate outstanding at any one
time;

     (5) indemnities of officers, directors and employees of the Company or any
Restricted Subsidiary consistent with applicable charter, bylaw or statutory
provisions; and

     (6) the payment of reasonable and customary fees to directors of the
Company or any of its Restricted Subsidiaries who are not employees of the
Company or any Subsidiary.

Section 4.9 Additional Subsidiary Guarantees

     If the Company or any of its Restricted Subsidiaries acquires or creates
another Restricted Subsidiary (other than Foreign Subsidiaries) after the Issue
Date, then the Company shall cause that newly acquired or created Restricted
Subsidiary to become a Guarantor and execute a supplemental indenture
substantially in the form of Exhibit E hereto and deliver an Opinion of Counsel
                             ---------
to the Trustee as provided in Section 11.4 of this Indenture.
                              ------------



                                       67
<PAGE>

Section 4.10 Business Activities

     The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than the Oil and Gas Business, except to such
extent as would not be material in the opinion of the Board of Directors (which
opinion shall be reasonable and made in good faith) to the Company and its
Restricted Subsidiaries taken as a whole.

Section 4.11 Change of Control

     (a) If a Change of Control occurs, each Holder of Securities will have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of that Holder's Securities pursuant to the offer
described below (the "Change of Control Offer"). In the Change of Control Offer,
the Company will offer a payment (the "Change of Control Payment") in cash equal
to 101% of the aggregate principal amount of Securities to be repurchased plus
accrued and unpaid interest thereon, if any, to the date of purchase. Within 30
days following any Change of Control, the Company will mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Securities on the date (the "Change of
Control Payment Date") specified in such notice, which date will be no earlier
than 30 days nor later than 60 days from the date such notice is mailed,
pursuant to the procedures required by this Indenture and described in such
notice. The Company will comply with the requirements of Rule 14e-l 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 the Securities 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 the covenant described herein, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this covenant by virtue of the Company's
compliance with such securities laws or regulations.

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

     (1) accept for payment all Securities or portions thereof properly tendered
pursuant to the Change of Control Offer;

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

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

     (c) The Paying Agent will promptly mail to each Holder of Securities so
tendered and not withdrawn the Change of Control Payment for such tendered
Securities, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered, if any, by such
Holder; provided that each such new Security will be in a principal amount of
$1,000 or an integral multiple thereof. The Trustee will notify the Registrar of
the issuance of the new Security.



                                       68
<PAGE>

     (d) If the Change of Control Payment Date is on or after an interest
payment record date and on or before the related interest payment date, any
accrued and unpaid interest will be paid to the Person in whose name a Security
is registered at the close of business on such record date, and no other
interest will be payable to Holders who tender pursuant to the Change of Control
Offer.

     (e) The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.

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

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

Section 4.12 Maintenance of Office or Agency for Registration of Transfer,
     Exchange and Payment of Securities

     So long as any of the Securities shall remain outstanding, the Company
will, in accordance with Section 2.3 hereof, maintain an office or agency (which
                         -----------
may be an office of the Trustee or an affiliate of the Trustee, or the
Registrar) in the Borough of Manhattan, the City of New York, State of New York,
where the Securities may be surrendered for exchange or registration of transfer
as in this Indenture provided, and where notices and demands to or upon the
Company in respect to the Securities may be served, and where the Securities may
be presented or surrendered for payment. The Company may also from time to time
designate one or more other offices or agencies in the Borough of Manhattan, the
City of New York, the State of New York, where Securities may be presented or
surrendered for any and all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, the City of New York, State of New York for such
purposes. The Company will give to Trustee prompt written notice of the location
of any such office or agency and of any change of location thereof. The Company
initially appoints The Bank of New York Trust Company, N.A., as initial
Registrar and initial Paying Agent for each of said purposes. In case the
Company shall fail to maintain any such office or agency or shall fail to give
such notice of the location or of any change in the location thereof, such
surrenders, presentations and demands may be made and notices may be served at
the designated corporate trust office of the Trustee in the Borough of
Manhattan, City of New York, State of New York, and the Company hereby appoints
the Trustee its agent to receive at the aforesaid office all such surrenders,
presentations, notices and demands. The Trustee will give the Company prompt
notice of any change in location of the Trustee's designated corporate trust
office, but shall in all events maintain such an office in the Borough of
Manhattan, City of New York, State of New York.



                                       69
<PAGE>

     The Company hereby designates the office of The Bank of New York Trust
Company, N.A., 101 Barclay, Lobby Level, in the Borough of Manhattan, the City
of New York, the State of New York as one such office in accordance with Section
                                                                         -------
2.3 and this Section 4.12.
---          ------------

Section 4.13 Appointment to Fill a Vacancy in the Office of Trustee

     The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.8, a Trustee, so that
                                                 -----------
there shall at all times be a Trustee hereunder.

Section 4.14 Provision as to Paying Agent

     (a) If the Company shall appoint a Paying Agent other than the initial
Paying Agent or the Trustee, in accordance with the terms of this Indenture, it
will cause such Paying Agent to execute and deliver to the Trustee an instrument
in which such agent shall undertake, subject to the provisions of this Section
                                                                       -------
4.14:
---

     (1) that it will hold all sums held by it as such agent for the payment of
the principal of, premium, if any, or interest on the Securities (whether such
sums have been paid to it by the Company or by any other obligor on the
Securities) in trust for the benefit of the Holders of the Securities and will
notify the Trustee of the receipt of sums to be so held;

     (2) that it will give the Trustee notice of any failure by the Company (or
by any other obligor on the Securities) to make any payment of the principal of,
premium, if any, or interest on the Securities when the same shall be due and
payable;

     (3) that it will at any time during the continuance of any Event of Default
specified in Section 6.1, upon the written request of the Trustee, deliver to
             -----------
the Trustee all sums so held in trust by it; and

     (4) that it will acknowledge, accept and agree to comply in all aspects
with the provisions of this Indenture relating to the duties, rights and
liabilities of such Paying Agent.

     (b) If the Company shall not act as its own Paying Agent, it will, by 11:00
a.m. on or prior to the due date of the principal of or premium, if any, or
interest on any Securities, deposit with such Paying Agent a sum in same day
funds sufficient to pay the principal of, premium, if any, or interest so
becoming due, such sum to be held in trust for the benefit of the Holders of
Securities entitled to such principal of or premium, if any, or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its failure so to act.

     (c) If the Company shall act as its own Paying Agent, it will, on or before
each due date of the principal of or premium, if any, or interest on the
Securities, set aside, segregate and hold in trust for the benefit of the
Persons entitled thereto, a sum sufficient to pay such principal or premium or
interest so becoming due and will notify the Trustee of any failure to take such
action.

     (d) Anything in this Section 4.14 to the contrary notwithstanding, the
                          ------------
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any






                                       70
<PAGE>

other reason, pay or cause to be paid to the Paying Agent for delivery to the
Trustee all sums held in trust by it, as required by this Section 4.14, such
                                                          ------------
sums to be delivered by the Paying Agent to the Trustee to be held by the
Trustee upon the trusts herein contained.

     (e) Anything in this Section 4.14 to the contrary notwithstanding, the
                          ------------
agreement to hold sums in trust as provided in this Section 4.14 is subject to
                                                    ------------
the provisions of Section 8.4 and Section 8.6.
                  -----------     -----------

Section 4.15 Maintenance of Corporate Existence

     So long as any of the Securities shall remain outstanding, the Company will
at all times (except as otherwise provided or permitted in this Section 4.15,
                                                                ------------
Article V or elsewhere in this Indenture) do or cause to be done all things
---------
necessary to preserve and keep in full force and effect its corporate existence
and franchises and, subject to Article X hereof, the corporate existence and
                               ---------
franchises of each Restricted Subsidiary; provided that nothing herein shall
require the Company to continue the corporate existence or franchises of any
Subsidiary if in the judgment of the Company it shall be necessary, advisable or
in the interest of the Company to discontinue the same.

Section 4.16 Compliance Certificate

     (a) The Company shall deliver to the Trustee within 90 days after the end
of each fiscal year of the Company ending after the Issue Date an Officers'
Certificate stating that a review of the activities of the Company and its
Restricted Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has performed its obligations under this Indenture, and further stating
whether or not the signers know of any Default or Event of Default that occurred
during such period. If they do, the certificate shall describe such Default or
Event of Default, its status and what action the Company is taking or proposes
to take with respect thereto. The Company also shall comply with Trust Indenture
Act Section 314(a)(4).

     (b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.2 above shall be accompanied by a
                                 -----------
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article IV or Article V hereof or, if any such violation has
                  ----------    ---------
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

     (c) So long as any of the Securities are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.



                                       71
<PAGE>

Section 4.17 Taxes

     The Company will pay, and will cause each of its Significant 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 would not have a material adverse
effect on the Company and its Restricted Subsidiaries, taken as a whole.

Section 4.18 Stay, Extension and Usury Laws

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

                                    ARTICLE V

                                SUCCESSOR COMPANY

Section 5.1 Merger, Consolidation or Sale of Assets

     (a) The Company may not: (1) consolidate or merge with or into another
Person (whether or not the Company is the surviving corporation); or (2) sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets of the Company and its Restricted Subsidiaries taken
as whole, in one or more related transactions, to another Person, unless:

     (1) either:

          (A) the Company is the surviving corporation; or

          (B) 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 is a
     corporation, partnership or limited liability company organized or existing
     under the laws of the United States, any state thereof or the District of
     Columbia;

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

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



                                       72
<PAGE>

     (4) the Company or the Person formed by or surviving any such consolidation
or merger (if other than the Company) will, on the date of such transaction
after giving pro forma effect thereto and any related financing transactions 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 Section 4.3(a) hereof; and
                                              -------------

     (5) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and
such supplemental indenture (if any) comply with this Indenture.

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

     (c) Clause (a)(4) of this Section 5.1 will not apply to a sale, assignment,
                               -----------
transfer, conveyance or other disposition of assets between or among the Company
and any of its Restricted Subsidiaries that are Guarantors.

                                   ARTICLE VI

                              DEFAULTS AND REMEDIES

Section 6.1 Events of Default

     Each of the following is an "Event of Default":

     (1) default for 30 days in the payment when due of interest on the
Securities;

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

     (3) failure by the Company to comply with Section 5.1 hereof or;
                                               -----------

     (4) failure by the Company or any of its Restricted Subsidiaries to comply
for 30 days after receipt of written notice specified below with Sections 4.2,
                                                                 -------- ---
4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10 or 4.11 hereof;
---  ---  ---  ---  ---  ---  ---  ----    ----

     (5) failure by the Company for 60 days after receipt of written notice
specified below to comply with any of its other agreements contained in this
Indenture;

     (6) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is




<PAGE>

Guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or Guarantee now exists, or is created after the date of this
Indenture, if that default:

          (A) is caused by a failure to pay principal of, or premium, if any, or
     interest on such Indebtedness prior to the expiration of the 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
$5.0 million or more; provided, however, that if any such Payment Default is
cured or waived or any such acceleration rescinded, or such Indebtedness is
repaid, within a period of ten days from the continuation of such Payment
Default beyond 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;

          (7) failure by the Company or any of its Restricted Subsidiaries to
     pay final judgments aggregating in excess of $5.0 million (net of any
     amounts covered by insurance), which judgments are not paid, discharged or
     stayed for a period of 60 days;

          (8) any Subsidiary Guarantee of a Guarantor shall be held in any
     judicial proceeding to be unenforceable or invalid or, except as permitted
     by this Indenture, shall cease for any reason to be in full force and
     effect or any Guarantor, or any Person acting on behalf of any Guarantor,
     shall deny or disaffirm its obligations under its Subsidiary Guarantee, in
     each case with respect to any Guarantor that is also a Significant
     Subsidiary or any group of Guarantors that, taken together, would
     constitute a Significant Subsidiary; and

          (9) (A) the Company or a Significant Subsidiary or a group of
     Restricted Subsidiaries that, taken together, would constitute a
     Significant Subsidiary pursuant to or within the meaning of any Bankruptcy
     Law:

               (i) commences a voluntary case or proceeding;

               (ii) consents to the entry of an order for relief against it in
          an involuntary case or proceeding in which it is a debtor;

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

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

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

                                       74


<PAGE>

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

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

                    (i) is for relief against the Company or any Significant
               Subsidiary or a group of Restricted Subsidiaries that, taken
               together, would constitute a Significant Subsidiary in an
               involuntary case in which it is a debtor;

                    (ii) appoints a Custodian of the Company or any Significant
               Subsidiary or a group of Restricted Subsidiaries that, taken
               together, would constitute a Significant Subsidiary or for any
               substantial part of its property; or

                    (iii) orders the winding up or liquidation of the Company or
               any Significant Subsidiary or a group of Restricted Subsidiaries
               that, taken together would constitute a Significant Subsidiary;

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

     However, a default under clauses (4) and (5) of this Section 6.1 will not
                                                          -----------
constitute an Event of Default until the Trustee or the Holders of 25% in
principal amount of the outstanding Securities notify the Company of the default
and the Company does not cure such default within the time specified in clauses
(4) and (5) of this Section 6.1 after receipt of such notice. Such notice must
                    -----------
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default."

Section 6.2 Acceleration of Maturity; Rescission and Annulment

     If an Event of Default (other than an Event of Default described in clause
(9) of Section 6.1) occurs and is continuing, the Trustee by notice to the
       -----------
Company, or the Holders of at least 25% in principal amount of the outstanding
Securities by notice to the Company and the Trustee, may declare the principal
of, premium, if any, and accrued and unpaid interest, if any, on all the
Securities to be due and payable. Upon such a declaration, such principal,
premium and accrued and unpaid interest will be due and payable immediately. If
an Event of Default described in clause (9) of Section 6.1 above occurs and is
                                               -----------
continuing, the principal of, premium, if any, and accrued and unpaid interest
on all the Securities will become and be immediately due and payable without any
further action or notice on the part of the Trustee or any Holders. The Holders
of a majority in outstanding principal amount of the Securities by notice to the
Trustee may on behalf of the Holders of all the Securities rescind any such
acceleration with respect to the Securities and its consequences if (1)
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (2) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Securities
that have become due solely by such declaration of acceleration, have been cured
or waived.


                                       75

<PAGE>

Section 6.3 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, premium (if any) or
interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.

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

Section 6.4 Waiver of Past Defaults

     The Holders of a majority in outstanding principal amount of the
Securities, by notice to the Trustee may on behalf of the Holders of all the
Securities waive an existing Default or Event of Default and its consequences
hereunder except (i) a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on a Security or (ii) a Default or
Event of Default in respect of a provision that under Section 9.2 hereof cannot
                                                      -----------
be amended without the consent of each Holder affected. When a Default or Event
of Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any consequent right.

Section 6.5 Control by Majority

     The Holders of a majority in outstanding principal amount of the Securities
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.1
                                                                   -----------
hereof, that the Trustee determines is unduly prejudicial to the rights of other
Holders or would involve the Trustee in personal liability; provided, however,
that the Trustee may take any other action deemed proper by the Trustee that is
not inconsistent with such direction. Subject to Section 7.1, prior to taking
                                                 -----------
any action hereunder, the Trustee shall be entitled to indemnification
reasonably satisfactory to it against all loss, liability and expense caused by
taking or not taking such action.

Section 6.6 Limitation on Suits

     Except to enforce the right to receive payment of principal, premium (if
any) or interest when due, a Holder may not pursue any remedy with respect to
this Indenture, the Securities or the Guarantees unless:

     (1) the Holder has previously given the Trustee written notice stating that
an Event of Default is continuing;

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






                                       76
<PAGE>

     (3) such Holder or Holders have furnished the Trustee reasonable security
or indemnity against any loss, liability or expense;

     (4) the Trustee has not complied with the Holders' request within 60 days
after receipt of the request and the furnishing of security or indemnity; and

     (5) the Holders of a majority in outstanding principal amount of the
Securities have not given the Trustee a direction that, in the opinion of the
Trustee, is inconsistent with the request during such 60-day period.

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

Section 6.7 Rights of Holders to Receive Payment

     Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of, premium, if any, and interest on the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities, 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 6.8 Collection Suit by Trustee

     If an Event of Default specified in Section 6.1(1) or Section 6.1(2) hereof
                                         --------------    --------------
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount then due
and owing (together with interest on any unpaid interest to the extent lawful)
and the amounts provided for in Section 7.7 hereof to cover the costs and
                                -----------
expenses of collection, including the reasonable compensation, disbursement and
advances of the Trustee, its agents and counsel.

Section 6.9 Trustee May File Proofs of Claim

     The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Holders allowed in any judicial proceedings relative to the Company or any
Subsidiary Guarantor or their respective creditors or properties and, unless
prohibited by law or applicable regulations, may vote on behalf of the Holders
in any election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make 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 it for the compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.7 hereof.
                                    -----------
Section 6.10 Priorities

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



                                       77
<PAGE>

          First: costs and expenses of collection, including all sums paid or
     advanced by the Trustee hereunder and the compensation, expenses and
     disbursements of the Trustee, its agents, and counsel and all other amounts
     due to the Trustee under Section 7.7 hereof;
                              -----------

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

          Third: to the Company.

     The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such record date,
                         ------------
the Trustee shall mail to each Holder and the Company a notice that states the
record date, the payment date and amount to be paid.

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
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
                                                                 ------------
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
                                                                        -------
6.7 hereof or a suit by Holders of more than 10% in outstanding principal amount
---
of the Securities.

                                   ARTICLE VII

                                     TRUSTEE

Section 7.1 Duties of Trustee

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

     (b) Except during the continuance of an Event of Default: (i) the Trustee
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture 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.






                                       78
<PAGE>

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

     (1) this paragraph does not limit the effect of Section 7.1(b) hereof;
                                                     --------------

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

     (3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.5 hereof.
            -----------

     (d) Every provision of this Indenture that in any way relates to the
Trustee is subject to Sections 7.1(a), 7.1(b) and 7.1(c) hereof.
                      ---------------  -----      ------

     (e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.

     (f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.

     (g) Subject to Section 7.1(a) hereof, no provision of this Indenture shall
                    --------------
require the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers, if it shall have reasonable grounds to believe
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

Section 7.2 Rights of Trustee.

     (a) The Trustee may rely on 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. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.

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

     (d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture; provided, however, that the
Trustee's conduct does not constitute willful misconduct or negligence.

     (e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete




                                       79
<PAGE>

authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.

(f) Except for (i) a default under Section 6.1(1) or Section 6.1(2) hereof, or
                                   --------------    -------------
(ii) any other event of which the Trustee has actual knowledge and which event,
with the giving of notice or the passage of time or both, would constitute an
Event of Default under this Indenture, the Trustee shall not be deemed to have
notice of any default or event unless specifically notified in writing of such
event by the Company or any Holder of the Securities.

Section 7.3 Individual Rights of Trustee

     The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. However, in the event
that the Trustee acquires any conflicting interest, it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as Trustee
or resign. Any Paying Agent, Registrar, co-registrar or co-paying agent may do
the same with like rights. However, the Trustee must comply with Sections 7.10
                                                                 -------------
and 7.11 hereof.
--------

Section 7.4 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 Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, it shall
not be responsible for the use or application of any money received by any
Paying Agent (other than itself as Paying Agent), and it shall not be
responsible for any statement of the Company in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.

Section 7.5 Notice of Defaults

     If a Default or Event of Default occurs and is continuing and if a Trust
Officer has actual knowledge thereof, the Trustee shall mail to each Holder
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 relating to payment of principal
of, premium, if any, or interest on, any Security (including payments pursuant
to the optional redemption or required repurchase provisions of such Security,
if any), the Trustee may withhold the notice if and so long as its board of
directors, the Executive Committee of its board of directors or a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of Holders.

Section 7.6 Reports by Trustee to Holders

     (a) Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Holder a brief report
that complies with Trust Indenture Act Section 313(a) (but if no event described
in Trust Indenture Act ss.313(a) has occurred within the 12 months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with Trust Indenture Act Section 313(b). The Trustee shall also transmit by mail
all reports required by Trust Indenture Act Section 313(c).




                                       80
<PAGE>

(b) A copy of each report at the time of its mailing to Holders shall be mailed
to the Company and filed with the SEC and each stock exchange (if any) on which
the Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.

Section 7.7 Compensation and Indemnity

     (a) The Company shall pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for its services as set forth in a
separate fee agreement between the Trustee and the Company. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, costs of preparing and reviewing reports, certificates and other
documents, costs of preparation and mailing of notices to Holders and reasonable
costs of counsel retained by the Trustee in connection with the delivery of an
Opinion of Counsel or otherwise, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents and counsel. The Company
shall indemnify and hold harmless the Trustee (in its individual and trustee
capacities) and its officers, directors and agents against any and all loss,
liability, claims, action, suit, cost or expense (including reasonable
attorneys' fees) of any kind and nature whatsoever incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder, including the costs and expenses of enforcing this Indenture
(including this Section 7.7) and of defending itself against any claims (whether
                -----------
asserted by any Holder, the Company or otherwise). The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company is not required to reimburse any expense or indemnify
against any loss, liability claim, again, suit, cost or expense incurred by the
Trustee through the Trustee's own willful misconduct or negligence.

     (b) To secure the Company's payment obligations in this Section 7.7, the
                                                             -----------
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of, premium (if any) and interest on particular Securities.

     (c) The Company's payment obligations pursuant to this Section 7.7 shall
                                                            -----------
survive the discharge of this Indenture and the resignation or removal of the
Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(9) hereof with respect to the Company, the expenses are
             -------------
intended to constitute expenses of administration under any Bankruptcy Law.

Section 7.8 Replacement of Trustee

     (a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
                                -----------


                                       81
<PAGE>

     (b) The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in outstanding principal amount of the Securities may
remove the Trustee by so notifying the Trustee and the Company and may appoint a
successor Trustee. The Company may remove the Trustee if: (i) the Trustee fails
to comply with Section 7.10 hereof; (ii) the Trustee is adjudged bankrupt or
               ------------
insolvent; (iii) a Custodian or other public officer takes charge of the Trustee
or its property; or (iv) the Trustee otherwise becomes incapable of acting.

     (c) If the Trustee resigns or is removed by the Company or by the Holders
of a majority in outstanding principal amount of the Securities and such Holders
do not reasonably promptly appoint a successor Trustee, or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.

     (d) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. 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 the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7 hereof.
                -----------

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

     (f) If the Trustee fails to comply with Section 7.10 hereof after written
                                             ------------
notice thereto, the Holders of at least 10% in principal amount of the then
outstanding securities may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

     (g) Notwithstanding the replacement of the Trustee pursuant to this Section
                                                                         -------
7.8, the Company's obligations under Section 7.7 hereof shall continue for the
---                                  -----------
benefit of the retiring Trustee.

Section 7.9 Successor Trustee by Merger

     (a) If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Trustee.

     (b) If at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee, and deliver such Securities so
authenticated; and if at that time any of the Securities shall not have been
authenticated, any successor to the Trustee may authenticate such Securities
either in the name of any predecessor hereunder or in the name of the successor
to the Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have.



                                       82
<PAGE>

Section 7.10 Eligibility; Disqualification

         The Trustee shall at all times satisfy the requirements of Trust
Indenture Act Section 310(a). 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 $50 million as set forth in its most recent published annual report of
condition. The Trustee shall comply with Trust Indenture Act Section 310(b);
provided, however, that there shall be excluded from the operation of Trust
Indenture Act Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
Trust Indenture Act Section 310(b)(1) are met.

Section 7.11 Preferential Collection of Claims Against Company

     The Trustee shall comply with Trust Indenture Act Section 311(a), excluding
any creditor relationship listed in Trust Indenture Act Section 311(b). A
Trustee who has resigned or been removed shall be subject to Trust Indenture Act
Section 311(a) to the extent indicated.

                                  Article VIII

                       DISCHARGE OF INDENTURE; DEFEASANCE

Section 8.1 Discharge of Liability on Securities; Defeasance

     (a) Subject to Section 8.1(c) hereof, when (i)(x) the Company delivers to
                    --------------
the Trustee all outstanding Securities (other than Securities replaced pursuant
to Section 2.6 hereof) for cancellation or (y) all outstanding Securities not
   -----------
theretofore delivered for cancellation have become due and payable at their
scheduled maturity or (z) all outstanding Securities not theretofore delivered
for cancellation have become scheduled for redemption under arrangements
satisfactory to the Trustee as a result of the giving of notice of redemption by
the Trustee in the name and at the expense of the Company in accordance with
Article III hereof and the Company irrevocably deposits or causes to be
-----------
deposited with the Trustee as trust funds in trust solely for the benefit of the
Holders money in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient without consideration
of any reinvestment of interest to pay and discharge the entire Indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation for
principal, premium, if any, and accrued interest to the date of maturity or
redemption, (ii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company is a party
or by which the Company is bound; (iii) the Company has paid or caused to be
paid all sums then payable by it under this Indenture and the Securities; and
(iv) the Company has delivered irrevocable instructions to the Trustee under
this





                                       83
<PAGE>

 Indenture to apply the deposited money toward the payment of such
Securities at maturity or the Redemption Date, as the case may be, then the
Trustee shall acknowledge satisfaction and discharge of this Indenture, and the
obligations of the Company and the Subsidiary Guarantors under the Securities
and the Subsidiary Guarantees, on demand of the Company (accompanied by an
Officers' Certificate and an Opinion of Counsel stating that all conditions
precedent specified herein relating to the satisfaction and discharge of this
Indenture have been complied with) and at the cost and expense of the Company.

     (b) Subject to Section 8.2 hereof, the Company at its option at any time
                    -----------
may terminate (i) all its obligations, subject to Section 8.1(c) hereof, under
                                                  --------------
the Securities and this Indenture and all obligations of the Guarantors with
respect to their Subsidiary Guarantees ("legal defeasance option"), and after
giving effect to such legal defeasance, any omission to comply with such
obligations shall no longer constitute a Default or Event of Default or (ii) its
obligations under Section 4.2, Section 4.3, Section 4.4, Section 4.5, Section
                  -----------   ----------  -----------  -----------  -------
4.6, Section 4.7, Section 4.8, Section 4.9, Section 4.10, Section 4.11 hereof
---  -----------  -----------  -----------  ------------  ------------
and clause (a)(4) of Section 5.1 hereof and the Company may omit to comply with
                     -----------
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply with such covenants shall no longer constitute a Default
or an Event of Default under Section 6.1(3) (solely as it relates to clause
                             -------------
(a)(4) of Section 5.1) and Section 6.1(4) hereof and the operation of Section
          -----------      --------------                             -------
6.1(5), Section 6.1(6), Section 6.1(7) and Section 6.1(8) hereof and, (with
------  --------------  --------------     -------------
respect only to Significant Subsidiaries) Section 6.1(9) hereof, and the events
                                          --------------
specified in such Sections shall no longer constitute an Event of Default
(clause (ii) being referred to as the "covenant defeasance option"), but except
                                       --------------------------
as specified above, the remainder of this Indenture and the Securities shall be
unaffected thereby. The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. If the
Company exercises its legal defeasance option or its covenant defeasance option,
each Guarantor shall be released from its obligations with respect to its
Subsidiary Guarantee.

     If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Section 6.1(4), Section
                                                        --------------  -------
6.1(5), Section 6.1(6), Section 6.1(7), Section 6.1(8), and (with respect only
-----   --------------  --------------  -------------
to Significant Subsidiaries) Section 6.1(9) hereof or the failure of the Company
                             --------------
to comply with clause (a)(4) of Section 5.1 hereof.
                                -----------

     Upon satisfaction of the conditions set forth herein and upon request of
the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.

     (c) Notwithstanding the provisions of Section 8.1(a) and Section 8.1(b)
                                           -------------      -------------
hereof, the obligations of the Company in Section 2.3, Section 2.4, Section 2.5,
                                          -----------  -----------  -----------
Section 2.6, Section 2.7, Section 2.9, Section 7.7, Section 7.8 hereof, and in
-----------  -----------  -----------  -----------  -----------
this Article VIII shall survive until the Securities have been paid in full.
Thereafter, the obligations of the Company in Section 7.7, Section 8.4 and
                                              -----------  -----------
Section 8.5 hereof shall survive.
-----------



                                       84
<PAGE>

Section 8.2 Conditions to Defeasance

     The Company may exercise its legal defeasance option or its covenant
defeasance option only if:

     (1) the Company shall have irrevocably deposited with the Trustee, in
trust, for the benefit of the Holders of the Securities, 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 firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Securities on the Stated Maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to Stated Maturity or to a particular
redemption date;

     (2) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that (a) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the Issue Date,
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such legal defeasance
option 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 option had not occurred;

     (3) in the case of the covenant defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that the Holders of the outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such covenant defeasance option 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 option had not occurred;

     (4) no Default or Event of Default shall have occurred and be continuing
either: (a) on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit); or
(b) insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date of
deposit;

     (5) such legal defeasance option or covenant defeasance option 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 Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;

     (6) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;

     (7) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of





                                       85
<PAGE>

Securities over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and

     (8) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that all conditions precedent
relating to the legal defeasance option or the covenant defeasance option have
been complied with.

Section 8.3 Delivery and Application of Trust Money

     (a) Any money or Government Securities to be delivered to or deposited with
the Trustee by the Company shall be delivered to or deposited with the Paying
Agent for further delivery to or deposit with the Trustee.

     (b) The Trustee shall hold in trust money or Government Securities
deposited with it pursuant to this Article VIII. It shall apply the deposited
                                   ------------
money and the money from Government Securities through the Paying Agent and in
accordance with this Indenture to the payment of principal, premium, if any, of
and interest on the Securities.

Section 8.4 Repayment to Company

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

     Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal of, or premium, if any, or interest on the Securities
that remains unclaimed for two years (or any such money then held by the Company
or any Subsidiary shall be discharged from any trust hereunder), and,
thereafter, Holders entitled to the money must look to the Company for payment
as unsecured general creditors; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which will not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.

Section 8.5 Indemnity for Government Securities

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

Section 8.6 Reinstatement

     If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with this Article VIII by reason of any legal
                                   ------------
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture and the Securities shall be




                                       86
<PAGE>

revived and reinstated as though no deposit had occurred pursuant to this
Article VIII until such time as the Trustee or Paying Agent is permitted to
apply all such money or Government Securities in accordance with this Article
VIII; provided, however, that, if the Company has made any payment of interest
on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or Government Securities
held by the Trustee or Paying Agent.

                                   ARTICLE IX

                                   AMENDMENTS

Section 9.1 Without Consent of Holders

     The Company, the Guarantors and the Trustee may amend or supplement this
Indenture, the Securities or the Subsidiary Guarantees without notice to or
consent of any Holder:

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

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

     (3) to provide for the assumption of the Company's or a Guarantor's
obligations to Holders of the Securities in the case of a merger or
consolidation or sale of all or substantially all of the Company's or a
Guarantor's properties or assets in compliance with this Indenture;

     (4) to add or release Guarantors in compliance with this Indenture;

     (5) 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 Holder;

     (6) to secure the Securities, including pursuant to the requirements of
Section 4.5;
-----------

     (7) to comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act;

     (8) to provide for the issuance of the Exchange Securities, which will have
terms substantially identical in all respects to the Initial Securities (except
that the transfer restrictions contained in the Initial Securities will be
modified or eliminated, as appropriate), and which will be treated, together
with any outstanding Initial Securities, as a single issue of securities; or

     (9) to provide for the issuance of Additional Securities in accordance with
this Indenture.





                                       87
<PAGE>

     After an amendment or supplement under this Section 9.1 becomes effective,
                                                 -----------
the Company shall mail to each Holder a notice briefly describing such
amendment. The failure to give such notice to any or all Holders, or any defect
therein, shall not impair or affect the validity of any such amendment or
supplement under this Section 9.1.
                      -----------

Section 9.2 With Consent of Holders

     The Company, the Guarantors, if any, and the Trustee may amend or
supplement this Indenture, the Securities or the Subsidiary Guarantees with the
written consent of the Holders of at least a majority in outstanding principal
amount of the Securities (including consents obtained in connection with the
purchase of, or tender offer or exchange offer for, Securities). Subject to the
following sentence, any existing Default or compliance with any provision of
this Indenture, the Securities or the Subsidiary Guarantees may be waived with
the written consent of the Holders of at least a majority in outstanding
principal amount of Securities (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Securities). However,
without the consent of each Holder, an amendment, supplement or waiver may not
(with respect to any Securities held by a non-consenting Holder):

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

     (2) reduce the principal of or change the fixed maturity of any Security or
alter the provisions with respect to the redemption of the Securities (other
than provisions relating to Sections 4.7 or 4.11);
                            ------------    ----
     (3) reduce the rate of or change the time for payment of interest on any
Security;

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

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

     (6) make any change in the provisions of the Indenture relating to waivers
of past Defaults or the rights of Holders of Securities to receive payments of
principal of or premium, if any, or interest on the Securities (except as
permitted by clause (7) below);

     (7) waive a redemption payment with respect to any Security (other than a
payment required by Sections 4.7 or 4.11);
                    ------------    ----
     (8) modify any Subsidiary Guarantee in any manner adverse to the Holders of
the Securities or release any Guarantor from its obligations under its
Subsidiary Guarantee except in accordance with the terms of this Indenture;






                                       88
<PAGE>

     (9) make any change in the ranking of the Securities or the Subsidiary
Guarantees in a manner adverse to the Holders of the Securities or the
Subsidiary Guarantees; or

     (10) make any change in the preceding amendment, supplement and waiver
provisions of this Section 9.2.
                   ------------

     The consent of the Holders is not necessary under this Section 9.2 to
                                                            -----------
approve the particular form of any proposed amendment or waiver. It is
sufficient if the consent approves the substance of the proposed amendment or
waiver.

     After an amendment, supplement or waiver under this Section 9.2 becomes
                                                         -----------
effective, the Company shall mail to each Holder of Securities affected thereby
a notice briefly describing such amendment. The failure to give such notice to
any or all Holders, or any defect therein, shall not impair or affect the
validity of any amendment, supplement or waiver under this Section 9.2.
                                                           -----------

Section 9.3 Compliance with Trust Indenture Act

     Every amendment to this Indenture, the Securities or the Subsidiary
Guarantees shall comply with the Trust Indenture Act as then in effect.

Section 9.4 Revocation and Effect of Consents and Waivers

     A consent to an amendment, supplement or waiver by a Holder of a Security
shall bind the Holder and every subsequent Holder of that Security or portion of
the Security that evidences the same debt as the consenting Holder's Security
(or any Holder of a Security issued upon the registration of transfer or
exchange thereof or in lieu thereof), even if notation of the amendment,
supplement or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Security or portion
of the Security if the Trustee receives the written notice of revocation before
the date the amendment, supplement or waiver becomes effective. After an
amendment, supplement or waiver becomes effective in accordance with its terms,
it shall bind every Holder.

     The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders at the close of business on
such record date (or their duly designated proxies), and only those Persons,
shall be entitled to give such consent or to revoke any consent previously given
or to take any such action, whether or not such Persons continue to be Holders
after such record date, and for this purpose the Securities then outstanding
shall be computed as of such record date. No such consent shall become valid or
effective more than 120 days after such record date.

Section 9.5 Notation on or Exchange of Securities

     If an amendment or supplement changes the terms of a Security, the Trustee
may require the Holder of the Security to deliver it to the Trustee. The Trustee
may place an appropriate notation on the Security regarding the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue






                                       89
<PAGE>
and the Trustee shall authenticate a new Security that reflects the changed
terms, but the failure to make the appropriate notation or to issue a new
Security shall not affect the validity and effect of such amendment or
supplement.

Section 9.6 Trustee To Sign Amendments

     The Trustee shall sign any amendment or supplement authorized pursuant to
this Article IX if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing such amendment or supplement the
Trustee shall be entitled to receive, and (subject to Section 7.1 hereof) shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amendment or supplement is authorized
or permitted by this Indenture.

                                   ARTICLE X

                              SUBSIDIARY GUARANTEE

Section 10.1 Subsidiary Guarantee

     Each Guarantor which is a party hereto or becomes a party hereto by
executing and delivering a supplement to this Indenture pursuant to Section 4.9
                                                                    -----------
hereof, jointly and severally, unconditionally Guarantees to each Holder and to
the Trustee and its successors and assigns the full and punctual payment of
principal of, premium (if any) and interest on the Securities when due, whether
at Stated Maturity, or upon optional redemption, required repurchase pursuant to
Section 4.7 or Section 4.11 hereof, acceleration or otherwise, and all other
-----------    ------------
monetary obligations owing by the Company under this Indenture (including
obligations owing to the Trustee) and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). The Guarantors further agree
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from the Guarantors, and that the Guarantors will
remain bound under this Article X notwithstanding any extension or renewal of
                        ---------
any Obligation.

         The Guarantors waive presentation to, demand of, payment from and
protest to the Company of any of the Obligations and also waive notice of
protest for nonpayment. The Guarantors waive notice of any Default under the
Securities or the Obligations. The obligations of the Guarantors hereunder shall
not be affected by (i) the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any right or remedy against the Company or any
other Person under this Indenture, the Securities or any other agreement or
otherwise; (ii) any extension or renewal of any Obligation; (iii) any
rescission, waiver, amendment, modification or supplement of any of the terms or
provisions of this Indenture (other than this Article X), the Securities or any
                                              ---------
other agreement; (iv) the release of security, if any, held by any Holder or the
Trustee for the Obligations or any of them; (v) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Obligations; (vi) any change in the ownership of the Company, or (vii) any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of the Guarantors or would
otherwise operate as a discharge of the Guarantors as a matter of law or equity.




                                       90
<PAGE>


     The Guarantors, jointly and severally, further agree that their Subsidiary
Guarantees herein constitute a guarantee of payment when due (and not a
Subsidiary Guarantee of collection) and waive any right to require that any
resort be had by any Holder or the Trustee to security, if any, held for payment
of the Obligations.

     The obligations of the Guarantors hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (except to the
extent provided in Section 10.2 hereof), including any claim of waiver, release,
                   ------------
surrender, alteration or compromise, and shall not be subject to any defense,
setoff, counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.

     The Guarantors, jointly and severally, further agree that their Subsidiary
Guarantees herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.

     In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against the Guarantors
by virtue hereof, upon the failure of the Company to pay any Obligation when and
as the same shall become due, whether at Stated Maturity, upon optional
redemption, required repurchase, acceleration, redemption or otherwise, the
Guarantors hereby promise to and will, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the
Trustee an amount equal to the sum of (i) the unpaid principal amount of such
Obligations, (ii) accrued and unpaid interest on such Obligations (but only to
the extent not prohibited by law) and (iii) all other monetary Obligations of
the Company to the Holders and the Trustee.

     The Guarantors, jointly and severally, agree that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article VI for the purposes of the Subsidiary Guarantee herein,
            ----------
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article VI, such Obligations (whether or not due and payable) shall forthwith
----------
become due and payable by the Guarantors for the purposes of this Section 10.1.
                                                                  ------------

     The Guarantors, jointly and severally, also agree to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section 10.1.
                                              ------------

Section 10.2 Limitation on Liability

     Each Guarantor, and by its acceptance of Securities, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will be limited to the maximum amount
that will, after giving effect to such






                                       91
<PAGE>

maximum amount and all other contingent and fixed liabilities of such Guarantor
that are relevant under such laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
this Article X, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.

Section 10.3 Execution and Delivery of Subsidiary Guarantee

     To evidence its Subsidiary Guarantee set forth in Section 10.1, each
                                                       ------------
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit D hereto will be endorsed by
                                      ---------
manual or facsimile signature by an Officer of such Guarantor on each Security
authenticated and delivered by the Trustee and that this Indenture will be
executed on behalf of such Guarantor by one of its Officers by execution of the
signature page hereof or by execution of a supplemental indenture substantially
in form of Exhibit E hereof.
           ---------

     Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 10.1 will remain in full force and effect notwithstanding any failure to
------------
endorse on each Security a notation of such Subsidiary Guarantee. If an Officer
whose signature is on this Indenture or on the Subsidiary Guarantee no longer
holds that office at the time the Trustee authenticates the Security on which a
Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will be valid
nevertheless.

     The delivery of any Security by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.

     In the event that the Company or any of its Restricted Subsidiaries
acquires or creates another Restricted Subsidiary (other than Foreign
Subsidiaries) after the Issue Date, the Company will comply with the provisions
of Section 4.9 hereof.
   -----------

Section 10.4 Successors and Assigns

     Except as otherwise provided in Section 10.9 hereof, this Article X shall
                                     ------------              ---------
be binding upon the Guarantors and their successors and assigns and shall inure
to the benefit of the successors and assigns of the Trustee and the Holders and,
in the event of any transfer or assignment of rights in accordance with the
terms of this Indenture by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture, the Securities and the
Subsidiary Guarantees.

Section 10.5 No Waiver

     Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article X shall
                                                               ---------
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege. The
rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Article X at law, in equity, by
statute or otherwise.

                                       92

<PAGE>


Section 10.6 Right of Contribution

     Each Guarantor hereby agrees that to the extent that a Guarantor shall have
paid more than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder who has not paid its proportionate share of such
payment. Each Guarantor's right of contribution shall be subject to the terms
and conditions of this Article X. The provisions of this Section 10.6 shall in
                       ---------
no respect limit the obligations and liabilities of any Guarantor to the Trustee
and the Holders and each Guarantor shall remain liable to the Trustee and the
Holders for the full amount guaranteed by such Guarantor hereunder.

Section 10.7 No Subrogation

         Notwithstanding any payment or payments made by any of the Guarantors
hereunder, no Guarantor shall be entitled to exercise any rights of subrogation
it may have to any of the rights of the Trustee or any Holder against the
Company or any other Guarantor or any collateral security or guarantee or right
of offset held by the Trustee or any Holder for the payment of the Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Company or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Trustee and the
Holders by the Company on account of the Obligations are paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Trustee in the exact form received by
such Guarantor (duly indorsed by such Guarantor to the Trustee, if required), to
be applied against the Obligations.

Section 10.8      Modification

         No modification, amendment or waiver of any provision of this Article
X, nor the consent to any departure by the Guarantors therefrom, shall in any
event be effective unless the same shall be made in accordance with Article IX
hereof. No notice to or demand on the Guarantors in any case shall entitle the
Guarantors to any other or further notice or demand in the same, similar or
other circumstances.

Section 10.9 Merger,  Consolidation or Sale of Assets of a Guarantor; Release of
a Guarantor

(a)      The Company shall not permit a Guarantor to sell or otherwise dispose
         of all or substantially all of its assets, 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:

(1)      immediately after giving effect to that transaction, no Default or
         Event of Default shall have occurred and be continuing; and

                                       93

<PAGE>


(2)      either:

(A)      the Person acquiring the property in any such sale or disposition or
         the Person formed by or surviving any such consolidation or merger
         assumes all the obligations of that Guarantor under its Subsidiary
         Guarantee pursuant to a supplemental indenture satisfactory to the
         Trustee; or

(B)      an amount equal to the Net Proceeds of such sale or other disposition
         is applied in accordance with Section 4.7 hereof.

(b)      The Subsidiary Guarantee of a Guarantor will be released in accordance
         with Section 10.9(c) hereof:

(1)      in connection with any sale or other disposition of all or
         substantially all of the assets of that Guarantor (including by way of
         merger or consolidation), other than to the Company or another
         Guarantor, if the Company applies the Net Proceeds of that sale or
         other disposition in accordance with Section 4.7 hereof;

(2)      in connection with any sale or other disposition of all of the Capital
         Stock of a Guarantor (including by way of merger or consolidation)
         other than to the Company or another Guarantor, if the Company applies
         the Net Proceeds of that sale or other disposition in accordance with
         Section 4.7 hereof; or

(3)      if the Company designates any Restricted Subsidiary that is a Guarantor
         as an Unrestricted Subsidiary in accordance with the provisions of this
         Indenture;

which release shall be evidenced by a supplemental indenture satisfactory to the
Trustee and the Company.

(c) In the case of either: (a) or (b) above, the Company shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or sale or other disposition (in the case of
(a)) or release (in the case of (b)), and any supplemental indenture, comply
with this Indenture.

(d) Notwithstanding anything in this Section 10.9 to the contrary, a Subsidiary
Guarantor may consolidate with or merge into the Company or another Subsidiary
Guarantor, and may transfer, sell or dispose of all or substantially all its
assets to the Company or another Subsidiary Guarantor.

                                   ARTICLE XI

                                  MISCELLANEOUS

Section 11.1      Trust Indenture Act Controls

         If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the
Trust Indenture Act, the provision required by the Trust Indenture Act shall
control.


                                       94

<PAGE>
<PAGE>

Section 11.2 Notices

     Any notice or communication shall be in writing and delivered in person or
mailed by first-class mail, telecopier or overnight air courier guaranteeing
next day delivery, addressed as follows (unless the Company and the Trustee
agree to another method of delivery):

     if to the Company or the Guarantors:

               KCS Energy, Inc.
               5555 San Felipe, Suite 1200
               Houston, Texas 77056
               Attention:  Chief Financial Officer
               Facsimile: (713) 877-1372

     with a copy to:

     Andrews Kurth LLP
               600 Travis, Suite 4200
               Houston, Texas  77002
               Attention: Diana Hudson, Esq.
               Facsimile: (713) 220-4285

     if to the Trustee:

               U.S. Bank National Association 100 Wall Street, Suite 1600
               New York, New York 10005
               Attention: Corporate Trust Administration
               Facsimile: (651) 495-8097

     The Company or the Guarantors, by notice to the Trustee, or the Trustee by
notice to the Company and the Guarantors, may designate additional or different
addresses for subsequent notices or communications.

     Any notice or communication to a Holder shall be delivered to the Holder at
the Holder's address as it appears on the registration books of the Registrar 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 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; (other than those sent
to Holders) when answered back, if telecopied; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.

     Failure to deliver 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 delivered in the manner provided above, it is duly given,
whether or not the addressee receives it.






                                       95
<PAGE>

Section 11.3 Communication by Holders with other Holders

     Holders may communicate pursuant to the Trust Indenture Act Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of the Trust Indenture Act Section 312(c).

Section 11.4 Certificate and Opinion as to Conditions Precedent

     Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall, if
requested, furnish to the Trustee: (i) an Officers' Certificate in form and
substance reasonably satisfactory to the Trustee stating that, in the opinion of
the signers, all conditions precedent, if any; provided for in this Indenture
relating to the proposed action have been complied with; and (ii) an Opinion of
Counsel in form and substance reasonably satisfactory to the Trustee stating
that, in the opinion of such counsel, all such conditions precedent have been
complied with.

Section 11.5 Statements Required in Certificate or Opinion

     Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include: (i) a statement that the
individual making such certificate or opinion has read such covenant or
condition; (ii) 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; (iii) a statement that, in the opinion of such
individual, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (iv) a statement as to whether or not, in
the opinion of such individual, such covenant or condition has been complied
with.

Section 11.6 When Securities Disregarded

     In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.

Section 11.7 Legal Holidays

     A "Legal Holiday" is a day that is not a Business Day. Notwithstanding any
other provisions of this Indenture, the Securities or the Subsidiary Guarantees,
if a payment date is a Legal Holiday, payment shall be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a regular record date is a Legal Holiday, the record date
shall not be affected.





                                       96
<PAGE>

Section 11.8 Governing Law

     THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE AND
ENFORCE THIS INDENTURE, THE SECURITIES AND THE SUBSIDIARY GUARANTEES.

Section 11.9 No Personal Liability of Directors, Officers, Employees and
     Shareholders

     No director, officer, employee, incorporator, member, partner or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or the Guarantors under the Securities, this
Indenture, the Subsidiary Guarantees, the Registration Rights Agreement or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.

Section 11.10 Successors

     All agreements of the Company and (except as otherwise provided in Section
10.9 hereof) the Guarantors in this Indenture and the Securities and the
Subsidiary Guarantees shall bind their respective successors. All agreements of
the Trustee in this Indenture shall bind its successors.

Section 11.11 Multiple Originals; Counterparts

     The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture. This Indenture may
be executed in multiple counterparts which, when taken together, shall
constitute one instrument.

Section 11.12 Severability

     In case any provision in this Indenture or in the Securities or the
Subsidiary Guarantees is invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions will not in any way be
affected or impaired thereby.

Section 11.13 Variable Provisions

     The Company initially appoints The Bank of New York Trust Company, N.A. as
Paying Agent and Registrar and Securities Custodian with respect to any Global
Securities.

Section 11.14 Table of Contents; Headings

     The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not intended to be considered a part hereof and shall not modify or
restrict any of the terms or provisions hereof.





                                       97
<PAGE>

Section 11.15 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.

                         [Signatures on following page]




                                       98
<PAGE>




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

                                  KCS ENERGY, INC.

                                  By:    /s/ James W. Christmas
                                         ---------------------------------------
                                         Name:  James W. Christmas
                                         Title: Chief Executive Officer
                                                and Chairman of the Board

                                         GUARANTORS:

                                         KCS RESOURCES INC.

                                         By:    /s/ J.T. Leary
                                                --------------------------------
                                                Name:  J.T. Leary
                                                Title: Vice President and
                                                       Chief Financial Officer

                                         MEDALLION CALIFORNIA PROPERTIES COMPANY

                                         By:    /s/ J.T. Leary
                                                --------------------------------
                                                Name:  J.T. Leary
                                                Title: Vice President and
                                                       Chief Financial Officer


                                         KCS ENERGY SERVICES, INC.

                                         By:    /s/ J.T. Leary
                                                --------------------------------
                                                Name:  J.T. Leary
                                                Title: Vice President and
                                                       Chief Financial Officer


                                         PROLIQ, INC.

                                  By:    /s/ James W. Christmas
                                         ---------------------------------------
                                         Name:  James W. Christmas
                                         Title: President, Chief Executive
                                                Officer and Chairman
                                                of the Board



                                         U.S. BANK NATIONAL ASSOCIATION,
                                                 as Trustee

                                         By:    /s/ Richard H. Prokosch
                                                --------------------------------
                                                Name:  Richard H. Prokosch
                                                Title: Vice President

     Signature Page to KCS Energy, Inc. Indenture, dated as of April 1, 2004


                                       99
<PAGE>



                                                                       Exhibit A

                               [Face of SECURITY]

                                KCS ENERGY, inc.

                          7 1/8 % SENIOR NOTE DUE 2012

                                                        CUSIP NO. [482434 AE 7]1
                                                                  [U24459 AB 2]2

No. __                                          Principal Amount $______________

     KCS ENERGY, INC., a Delaware corporation, promises to pay to ___________,
or registered assigns, the principal sum of _________________________________
dollars on April 1, 2012.

     Interest Payment Dates: April 1 and October 1, commencing October 1, 2004.

     Record Dates: March 15 and September 15.

     Dated:  _________ __, 20__

                                KCS ENERGY, INC.


                                By:
                                     -------------------------------------------
                                       Name:
                                       Title:


                                By:
                                     -------------------------------------------
                                       Name:
                                       Title:



U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the
Securities referred to in the Indenture.


By:
     ----------------------
     Authorized Signatory

---------------------------
1 For Securities sold in reliance on Rule 144A
2 For Securities sold in reliance on Regulaion S.


                                      A-1

<PAGE>


                               [Back of Security]

                                KCS ENERGY, INC.

                           7 1/8 % SENIOR NOTE DUE 2012

[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]

     Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

     1. Interest. KCS Energy, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at 7 1/8 % per
annum from April 1, 2004 until maturity. The Company will pay interest
semi-annually in arrears on April 1 and October 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each, an
"Interest Payment Date"). Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Security is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be October 1, 2004. The
Company will pay, to the extent lawful, interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, at the rate then in effect; it will pay, to the extent lawful,
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate as on
overdue principal. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

     2. Method of Payment. The Company will pay interest on the Securities
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the March 15 or September 15 next
preceding the Interest Payment Date, even if such Securities are canceled 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. The
   ------------
Securities will be payable as to principal, premium, if any, and interest at the
office or agency of the Paying Agent maintained for such purpose within the
Borough of Manhattan, the City and State of New York, or, at the option of the
Company, payment of interest may be made by check mailed by such Paying Agent to
the Holders at their addresses set forth in the register of Holders; provided
that payment by such Paying Agent by wire transfer of immediately available
funds will be required with respect to principal of and interest, and premium,
if any, on all Global Securities and all other Securities, the Holders of which
hold at least $5,000,000 aggregate principal amount of the Securities and will
have provided wire transfer instructions to the Company and the Paying Agent.
Such payment will be in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.





                                       A-2
<PAGE>


     3. Paying Agent and Registrar. Initially, The Bank of New York Trust
Company, N.A., will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent or Registrar without notice to any Holder and the
Company or any of its Subsidiaries may act as Paying Agent or Registrar, all in
accordance with the Indenture.

     4. Indenture. The Company issued the Securities under an Indenture, dated
as of April 1, 2004 (the "Indenture"), among the Company, the Guarantors named
on the signature pages thereto and the Trustee. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The Securities are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Security conflicts with the
express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Securities are unsecured obligations of the
Company. The Company initially issued $175,000,000 aggregate principal amount of
Securities. The Company may issue Additional Securities under the Indenture
subsequent to April 1, 2004, subject to Section 4.3 of the Indenture; provided,
                                        -----------
however, in no event may the Company issue any Additional Securities if, as a
result of any such issuance, the aggregate principal amount of Securities
outstanding would exceed the maximum aggregate principal amount of Securities
permitted under the Existing Credit Facilities or any other Credit Facilities,
in each case as in effect on the date of such issuance.

     5. Optional Redemption.

     (a) On and after April 1, 2008 the Company may redeem all or a part of the
Securities, at any time or from time to time, upon not less than 30 nor more
than 60 days' notice mailed to each Holder of Securities at such Holder's
registered address, in amounts of $1,000 or an integral multiple of $1,000, at
the following Redemption Prices (expressed as percentages of the principal
amount) plus accrued and unpaid interest on the Securities, if any, to the
applicable Redemption Date (subject to the right of Holders of record on the
relevant regular record date to receive interest due on an Interest Payment Date
that is prior to the Redemption Date), if redeemed during the 12-month period
beginning April 1 of the years indicated:

                           Year                                       Percentage
--------------------------------------------------------------------  ----------
2008................................................................   103.563%
2009................................................................   101.781%
2010 and thereafter.................................................   100.000%


     (b) On or prior to April 1, 2007, the Company may on one or more occasions
redeem up to an aggregate amount equal to 35% of the aggregate principal amount
of the Securities (including any Additional Securities) originally issued prior
to the Redemption Date under the Indenture at a Redemption Price of 107.125% of
the principal amount of the Securities, plus 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 the relevant Interest Payment
Date) with the Net Cash Proceeds of one or more Equity Offerings; provided that
(i) at least 65% in aggregate principal amount of the Securities (including any
Additional Securities) originally issued remains outstanding immediately after
the occurrence of such redemption (excluding Securities held by the Company and
its Subsidiaries) and (ii) each such redemption occurs within 90 days of the
date of the closing of the related Equity Offering.

                                      A-3

<PAGE>

     6. Denominations, Transfer, Exchange. The Securities are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar or 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 and fees or similar
governmental charges required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Security or portion of a
Security selected for redemption, except for the unredeemed portion of any
Security being redeemed in part. Also, the Company need not exchange or register
the transfer of any Securities for a period of 15 days before the day of any
selection of Securities to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

     If this is a Global Security, this Security represents the aggregate
principal amount of outstanding Securities from time to time endorsed hereon,
and the aggregate principal amount of outstanding Securities represented by this
Security may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions in accordance with the Indenture.

     7. Persons Deemed Owners. The registered Holder of a Security may be
treated as its owner for all purposes.

     8. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture and the Securities may be amended or supplemented with the written
consent of the Holders of at least a majority in outstanding principal amount of
the Securities, and any existing Default or compliance with any provision of the
Indenture or the Securities may be waived with the written consent of the
Holders of at least a majority in outstanding principal amount of the
Securities. Without the consent of any Holder of a Security, the Indenture or
the Securities may be amended or supplemented (i) to cure any ambiguity, defect
or inconsistency, (ii) to provide for uncertificated Securities in addition to
or in place of certificated Securities, (iii) to provide for the assumption of
the Company's or a Guarantor's obligations under the Indenture and the
Securities, (iv) to add or release Guarantors in compliance with the Indenture,
(v) to secure the Securities, (vi) to make any change that would provide any
additional rights or benefits to the Holders, (vii) to make any change that does
not adversely affect the legal rights of any Holder, (viii) to comply with any
requirement of the SEC in connection with qualifying the Indenture under the
Trust Indenture Act or maintaining such qualification, (ix) to provide for the
issuance of the Exchange Securities and (x) to provide for the issuance of
Additional Securities in accordance with the Indenture.

     9. Defaults. If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.

     10. Defeasance. The Indenture contains provisions for defeasance of (i) the
entire indebtedness of the Company on this Security and (ii) certain restrictive
covenants and the related Events of Default, subject to compliance by the
Company with certain conditions set forth in the Indenture, which provisions
apply to this Security.


                                      A-4

<PAGE>

     11. Authentication. This Security will not be valid until authenticated by
the manual signature of the Trustee or an Authenticating Agent.

     12. 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).

     13. [Additional Rights of Holders of Restricted Global Securities and
Restricted Definitive Securities. In addition to the rights provided to Holders
of Securities under the Indenture, Holders of Restricted Global Securities and
Restricted Definitive Securities will have all the rights set forth in the
Registration Rights Agreement, dated as of April 1, 2004, among the Company, the
Guarantors and the other parties named on the signature pages thereof.]*

     14. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities 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 Securities
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.

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

     KCS Energy, Inc.
     5555 San Felipe, Suite 1200
     Houston, Texas 77056
     Attention: Chief Financial Officer









-----------------------------
*Delete for Exchange Security





                                      A-5

<PAGE>




                                 Assignment Form

         To assign this Security, fill in the form below:

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

                                                 -------------------------------
                                                 (Insert assignee's legal name)

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

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

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

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

Date:  _______________

                         Your Signature:
                                        ----------------------------------------
                                       (Sign exactly as your name appears on the
                                       face of this Security)


Signature Guarantee:*
                      -------------------------------

-------------------------------------------------
*    Participant in a recognized Signature Gurantee Medallion Program (or other
     signature gurantor acceptable to the Trustee).



                                      A-6

<PAGE>




                       Option of Holder to Elect Purchase

     If you want to elect to have this Security purchased by the Company
pursuant to Section 4.7 or Section 4.11 of the Indenture, check the appropriate
            -----------    ------------
box below:

                        [ ] Section 4.7 [ ] Section 4.11
                            -----------     ------------

     If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.7 or Section 4.11 of the Indenture, state the
                    -----------    ------------
amount you elect to have purchased:

                                $---------------

Date:  _______________

                             Your Signature:
                                              ----------------------------------
                                              (Sign exactly as your name appears
                                                on the face of this Security)




                             Tax Identification No.:
                                                      --------------------------


Signature Guarantee:*
                      -------------------------------





-------------------------------------------------
*    Participant in a recognized Signature Gurantee Medallion Program (or other
     signature gurantor acceptable to the Trustee).


                                      A-7

<PAGE>



                      [TO BE ATTACHED TO GLOBAL SECURITIES]

            SCHEDULE OF Exchanges of interests in the GLOBAL SECURITY

  The following increases or decreases in this Global Security have been made:
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                           Principal Amount of this
                           Amount Decrease in      Amount of Increase in       Global Security         Signature of Authorized
                       Principal Amount of this   Principle Amount of this  Following such Decrease     Officer of Trustee or
 Date of Exchange          Global Security            Global Security            or Increase             Securities Custodian
-------------------------------------------------------------------------------------------------------------------------------

</TABLE>




                                      A-8
<PAGE>


                                                                       Exhibit B

                         FORM OF CERTIFICATE OF TRANSFER

KCS Energy, Inc.
5555 San Felipe, Suite 1200
Houston, Texas 77056

U.S. Bank National Association
100 Wall Street, Suite 1600
New York, New York 10005

     Re: KCS Energy, Inc. 7 1/8 % Senior Notes due 2012

                      (CUSIP [482434 AE 7]1 [U24459 AB2]2

     Reference is hereby made to the Indenture, dated as of April 1, 2004 (the
"Indenture"), among KCS Energy, Inc., as issuer (the "Company"), the Guarantors
named on the signature pages thereto and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

     ___________________, (the "Transferor") owns and proposes to transfer the
Security[ies] or interest in such Security[ies] specified in Annex A hereto, in
the principal amount of $___________ in such Security[ies] or interests (the
"Transfer"), to ___________________________ (the "Transferee"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:

                             [CHECK ALL THAT APPLY]

     1. [_] Check if Transferee will take delivery of a beneficial interest in
            ------------------------------------------------------------------
the 144A Global Security or a Restricted Definitive Security pursuant to Rule
-----------------------------------------------------------------------------
144A. The Transfer is being effected pursuant to and in accordance with Rule
----
144A under the Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Security is being transferred to a Person that the
Transferor reasonably believes is purchasing the beneficial interest or
Definitive Security for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Security will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Security
and/or the Restricted Definitive Security and in the Indenture and the
Securities Act.



---------------------------
1 For Securities sold in reliance on Rule 144A

2 For Securities sold in reliance on Regulaion S.


                                      B-1


<PAGE>


     2. [_] Check if Transferee will take delivery of a beneficial interest in
            ------------------------------------------------------------------
the Regulation S Global Security or a Restricted Definitive Security pursuant to
--------------------------------------------------------------------------------
Regulation S. The Transfer is being effected pursuant to and in accordance with
------------
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive
Security will be subject to the restrictions on Transfer enumerated in the
Private Placement Legend printed on the Regulation S Global Security and/or the
Restricted Definitive Security and in the Indenture and the Securities Act.

     3. [_] Check and complete if Transferee will take delivery of a beneficial
     --------------------------------------------------------------------------
interest in the IAI Global Security or a Restricted Definitive Security pursuant
--------------------------------------------------------------------------------
to any provision of the Securities Act other than Rule 144A or Regulation S. The
---------------------------------------------------------------------------
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Securities and
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):

          (a) [_] such Transfer is being effected pursuant to and in accordance
     with Rule 144 under the Securities Act;

                                       or

          (b)[_] such Transfer is being effected to the Company or a subsidiary
     thereof;

                                       or

          (c)[_] such Transfer is being effected pursuant to an effective
     registration statement under the Securities Act and in compliance with the
     prospectus delivery requirements of the Securities Act.

     4. [_} Check if Transferee will take delivery of a beneficial interest in
            ------------------------------------------------------------------
an Unrestricted Global Security or of an Unrestricted Definitive Security.
--------------------------------------------------------------------------

     (a)[_] Check if Transfer is pursuant to Rule 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the




                                      B-2

<PAGE>

Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Security will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Securities, on Restricted Definitive Securities and in the Indenture.

     (b) [_] Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Security will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Securities, on Restricted Definitive Securities and in the Indenture.

     (c) [_] Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Security will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Securities or Restricted Definitive Securities and in the Indenture.




                                      B-3

<PAGE>


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

                                         ---------------------------------------
                                                [Insert Name of Transferor]



                                          By:
                                             -----------------------------------
                                             Name:
                                             Title:

Dated:  _______________________



                                      B-4

<PAGE>




                                                                       Exhibit C

                         Form of Certificate of Exchange

KCS Energy, Inc.
5555 San Felipe, Suite 1200
Houston, Texas 77056

U.S. Bank National Association
100 Wall Street, Suite 1600
New York, New York 10005

                 Re: KCS Energy, Inc. 7 1/8 % Senior Notes due 2012

                      (CUSIP [482434 AE 7]1 [U24459 AB 2]2

     Reference is hereby made to the Indenture, dated as of April 1, 2004 (the
"Indenture"), among KCS Energy, Inc., as issuer (the "Company"), the Guarantors
named on the signature pages thereto and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

     __________________________, (the "Owner") owns and proposes to exchange the
Security[s] or interest in such Security[s] specified herein, in the principal
amount of $____________ in such Security[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:

         1. Exchange of Restricted Definitive Securities or Beneficial Interests
            --------------------------------------------------------------------
in a Restricted Global Security for Unrestricted Definitive Securities or
-------------------------------------------------------------------------
Beneficial Interests in an Unrestricted Global Security
-------------------------------------------------------

     (a)[_] Check if Exchange is from beneficial interest in a Restricted Global
Security to beneficial interest in an Unrestricted Global Security. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Security for a beneficial interest in an Unrestricted Global Security in
an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Securities and pursuant to and in accordance with the
Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Security is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.



---------------------------
1 For Securities sold in reliance on Rule 144A

2 For Securities sold in reliance on Regulaion S.

                                      C-1

<PAGE>




     (b) [_] Check if Exchange is from beneficial interest in a Restricted
Global Security to Unrestricted Definitive Security. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Security for
an Unrestricted Definitive Security, the Owner hereby certifies (i) the
Definitive Security is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Securities and pursuant to and
in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Definitive
Security is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.

     (c) [_] Check if Exchange is from Restricted Definitive Security to
beneficial interest in an Unrestricted Global Security. In connection with the
Owner's Exchange of a Restricted Definitive Security for a beneficial interest
in an Unrestricted Global Security, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Securities and pursuant to and
in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.

     (d) [_] Check if Exchange is from Restricted Definitive Security to
Unrestricted Definitive Security. In connection with the Owner's Exchange of a
Restricted Definitive Security for an Unrestricted Definitive Security, the
Owner hereby certifies (i) the Unrestricted Definitive Security is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Security
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

     2. Exchange of Restricted Definitive Securities or Beneficial Interests in
        -----------------------------------------------------------------------
Restricted Global Securities for Restricted Definitive Securities or Beneficial
-------------------------------------------------------------------------------
Interests in Restricted Global Securities
-----------------------------------------

     (a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Security to Restricted Definitive Security. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Security for
a Restricted Definitive Security with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Security is being acquired for
the Owner's own account without transfer. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the Restricted
Definitive Security issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Definitive Security and in the Indenture and the Securities Act.





<PAGE>

     (b) [_] Check if Exchange is from Restricted Definitive Security to
beneficial interest in a Restricted Global Security. In connection with the
Exchange of the Owner's Restricted Definitive Security for a beneficial interest
in the [CHECK ONE] 144A Global Security, Regulation S Global Security with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Securities and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the relevant Restricted Global Security
and in the Indenture and the Securities Act.

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

                                          --------------------------------------
                                          [Insert Name of Transferor]


                                          By:
                                              ----------------------------------
                                              Name:
                                              Title:
Dated:  ______________________




                                      C-3


<PAGE>



                                                                       Exhibit D

                    FORM OF NOTATION OF subsidiary GUARANTEE

     For value received, the undersigned Guarantor (which term includes any
successor to such Guarantor under the Indenture) has, jointly and severally,
with each other Subsidiary Guarantor, unconditionally guaranteed, to the extent
set forth in the Indenture and subject to the provisions in the Indenture dated
as of April 1, 2004 (the "Indenture") among KCS Energy, Inc. (the "Company"),
the Guarantors party thereto and U.S. Bank National Association, as trustee (the
"Trustee"), the full and punctual payment of the principal of, premium if any,
and interest on the Securities (as defined in the Indenture) when due, whether
at Stated Maturity, or upon optional redemption, required repurchase pursuant to
Section 4.7 or Section 4.11 of the Indenture, acceleration or otherwise, and all
-----------    ------------
other monetary obligations owing by the Company under the Indenture (including
obligations owing to the Trustee) and the Securities, all as more fully provided
in Article X of the Indenture. The obligations of the undersigned Guarantor to
   ---------
the Holders of Securities and to the Trustee pursuant to the Subsidiary
Guarantee and the Indenture are expressly set forth in Article X of the
                                                       ---------
Indenture and reference is hereby made to the Indenture for the precise terms of
the Subsidiary Guarantee. Each Holder of a Security, by accepting the same, (a)
agrees to and shall be bound by such provisions and (b) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided, however, that this
Subsidiary Guarantee shall be released upon any defeasance of this Security in
accordance with the provisions of the Indenture.

                                            [NAME OF GUARANTOR(S)]


                                            By:
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                      D-1

<PAGE>


                                                                       Exhibit E

                         FORM OF SUPPLEMENTAL INDENTURE
                      TO BE DELIVERED BY FUTURE GUARANTORS

     SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 20__, among [Name of Future Guarantor(s)] (the "New
Guarantor"), a subsidiary of KCS Energy, Inc., a Delaware corporation (or its
permitted successor), (the "Company"), the existing Guarantors (as defined in
the Indenture referred to herein) and U.S. Bank National Association, as trustee
under the Indenture referred to herein (the "Trustee"). The New Guarantor and
the existing Guarantors are sometimes referred to collectively herein as the
"Guarantors", or individually as a "Guarantor."

                               W I T N E S S E T H

     WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of April 1, 2004, relating to the 7
1/8% Senior Notes due 2012 (the "Securities") of the Company;

     WHEREAS, Section 4.9 of the Indenture provides that if the Company or any
              -----------
of its Restricted Subsidiaries acquires or creates another Restricted Subsidiary
(other than Foreign Subsidiaries) after the Issue Date, then the Company shall
cause newly acquired or created Restricted Subsidiary to become a Guarantor and
execute a supplemental indenture satisfactory to the Trustee and deliver an
Opinion of Counsel to the Trustee as provided in the Indenture; and

     WHEREAS, pursuant to Section 9.1 of the Indenture, the Company and the
                          -----------
Trustee are authorized to execute and deliver this Supplemental Indenture to
amend or supplement the Indenture without the consent of any Holder.

     NOW THEREFORE, to comply with the provisions of the Indenture and in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the New Guarantor, the other
Guarantors, the Company and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Securities as follows:

     1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

     2. AGREEMENT TO GUARANTEE. The New Guarantor hereby agrees, jointly and
severally, with all other Guarantors, to unconditionally Guarantee to each
Holder and to the Trustee the Obligations, to the extent set forth in the
Indenture and subject to the provisions in the Indenture. The obligations of the
Guarantors to the Holders of Securities and to the Trustee pursuant to the
Subsidiary Guarantees and the Indenture are expressly set forth in Article X of
the Indenture and reference is hereby made to the Indenture for the precise
terms of the Subsidiary Guarantees.

     3. EXECUTION AND DELIVERY. Each Guarantor agrees that the Subsidiary
Guarantees shall remain in full force and effect notwithstanding any failure to
endorse on each Security a notation of any such Subsidiary Guarantee of any
Guarantor.


                                      E-1

<PAGE>

     4. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE AND ENFORCE THIS SUBSIDIARY GUARANTEE.

     5. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. This Supplemental Indenture may be
executed in multiple counterparts which, when taken together, shall constitute
one instrument.

     6. EFFECT OF HEADINGS. The Section headings herein are for convenience only
and shall not affect the construction hereof.

     7. 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.



                                      E-2


<PAGE>


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

     Dated:  _______________, 20__

                                      [NEW GUARANTOR]

                                      By:      _______________________________
                                               Name:
                                               Title:

                                      [OTHER GUARANTORS]

                                      By:      _______________________________
                                               Name:
                                               Title:

                                      KCS ENERGY, INC.

                                      By:      _______________________________
                                               Name:
                                               Title:

                                      U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                      By:   _______________________________
                                            Authorized Signatory






                                      E-3