Document:

Exhibit
4.2

     

    Form
of Indenture

     

    ACORN
ENERGY, INC.

    ISSUER

     

    and

     

    [                                      
  ]

    INDENTURE
TRUSTEE

     

    INDENTURE

     

    Dated as
of ________, _____

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    TABLE
OF CONTENTS

     

    
      
        
          	
                  ARTICLE
      I                DEFINITIONS
      AND INCORPORATION BY REFERENCE

                	 
      	
                  1

                
	 
      	 
      	 
      
	
                  Section 1.01
      Definitions.

                	 
      	
                  1

                
	
                  Section 1.02
      Other Definitions.

                	 
      	
                  4

                
	
                  Section 1.03
      Incorporation by Reference of Trust Indenture Act.

                	 
      	
                  4

                
	
                  Section 1.04
      Rules of Construction.

                	 
      	
                  5

                
	 
      	 
      	 
      
	
                  ARTICLE
      II               THE
      SECURITIES

                	 
      	
                  5

                
	 
      	 
      	 
      
	
                  Section 2.01
      Issuable in Series.

                	 
      	
                  5

                
	
                  Section 2.02
      Establishment of Terms of Series of Securities.

                	 
      	
                  5

                
	
                  Section 2.03
      Execution and Authentication.

                	 
      	
                  7

                
	
                  Section 2.04
      Registrar and Paying Agent.

                	 
      	
                  7

                
	
                  Section 2.05
      Paying Agent to Hold Money in Trust.

                	 
      	
                  8

                
	
                  Section 2.06
      Holder Lists.

                	 
      	
                  8

                
	
                  Section 2.07
      Transfer and Exchange.

                	 
      	
                  8

                
	
                  Section 2.08
      Mutilated, Destroyed, Lost and Stolen Securities.

                	 
      	
                  8

                
	
                  Section 2.09
      Outstanding Securities.

                	 
      	
                  9

                
	
                  Section 2.10
      Treasury Securities.

                	 
      	
                  9

                
	
                  Section 2.11
      Temporary Securities.

                	 
      	
                  9

                
	
                  Section 2.12
      Cancellation.

                	 
      	
                  9

                
	
                  Section 2.13
      Defaulted Interest.

                	 
      	
                  10

                
	
                  Section 2.14
      Global Securities

                	 
      	
                  10

                
	
                  Section 2.15
      CUSIP Numbers.

                	 
      	
                  11

                
	 
      	 
      	 
      
	
                  ARTICLE
      III              REDEMPTION

                	 
      	
                  11

                
	 
      	 
      	 
      
	
                  Section 3.01
      Notice to Trustee.

                	 
      	
                  11

                
	
                  Section 3.02
      Selection of Securities to be Redeemed.

                	 
      	
                  11

                
	
                  Section 3.03
      Notice of Redemption.

                	 
      	
                  11

                
	
                  Section 3.04
      Effect of Notice of Redemption.

                	 
      	
                  12

                
	
                  Section 3.05
      Deposit of Redemption Price

                	 
      	
                  12

                
	
                  Section 3.06
      Securities Redeemed in Part.

                	 
      	
                  12

                
	 
      	 
      	 
      
	
                  ARTICLE
      IV              COVENANTS

                	 
      	
                  12

                
	 
      	 
      	 
      
	
                  Section 4.01
      Payment of Principal and Interest.

                	 
      	
                  12

                
	
                  Section 4.02
      SEC Reports.

                	 
      	
                  12

                
	
                  Section 4.03
      Compliance Certificate.

                	 
      	
                  12

                
	
                  Section 4.04
      Stay, Extension and Usury Laws.

                	 
      	
                  13

                
	 
      	 
      	 
      
	
                  ARTICLE
      V               SUCCESSORS

                	 
      	
                  13

                
	 
      	 
      	 
      
	
                  Section 5.01
      When Company May Merge, Etc.

                	 
      	
                  13

                
	
                  Section 5.02
      Successor Corporation Substituted.

                	 
      	
                  13

                
	 
      	 
      	 
      
	
                  ARTICLE
      VI              DEFAULTS
      AND REMEDIES

                	
                    

                	
                  13

                

        

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    (continued)

    

    
      
        
          
            
              
                
                  
                    	
                            Section
      6.01 Events of Default.

                          	 
      	
                            13

                          
	
                            Section
      6.02 Acceleration of Maturity; Rescission and Annulment.

                          	 
      	
                            14

                          
	
                            Section
      6.03 Collection of Indebtedness and Suits for Enforcement by
      Trustee.

                          	 
      	
                            15

                          
	
                            Section
      6.04 Trustee May File Proofs of Claim.

                          	 
      	
                            15

                          
	
                            Section
      6.05 Trustee May Enforce Claims Without Possession of
      Securities.

                          	 
      	
                            16

                          
	
                            Section
      6.06 Application of Money Collected.

                          	 
      	
                            16

                          
	
                            Section
      6.07 Limitation on Suits.

                          	 
      	
                            16

                          
	
                            Section
      6.08 Unconditional Right of Holders to Receive Principal and
      Interest.

                          	 
      	
                            17

                          
	
                            Section
      6.09 Restoration of Rights and Remedies.

                          	 
      	
                            17

                          
	
                            Section
      6.10 Rights and Remedies Cumulative.

                          	 
      	
                            17

                          
	
                            Section
      6.11 Delay or Omission Not Waiver.

                          	 
      	
                            17

                          
	
                            Section
      6.12 Control by Holders.

                          	 
      	
                            17

                          
	
                            Section
      6.13 Waiver of Past Defaults.

                          	 
      	
                            17

                          
	
                            Section
      6.14 Undertaking for Costs.

                          	 
      	
                            18

                          
	 
      	 
      	 
      
	
                            ARTICLE
      VII            TRUSTEE

                          	 
      	
                            18

                          
	 
      	 
      	 
      
	
                            Section
      7.01 Duties of Trustee.

                          	 
      	
                            18

                          
	
                            Section
      7.02 Rights of Trustee.

                          	 
      	
                            19

                          
	
                            Section
      7.03 Individual Rights of Trustee.

                          	 
      	
                            20

                          
	
                            Section
      7.04 Trustee’s Disclaimer.

                          	 
      	
                            20

                          
	
                            Section
      7.05 Notice of Defaults.

                          	 
      	
                            20

                          
	
                            Section
      7.06 Reports by Trustee to Holders.

                          	 
      	
                            20

                          
	
                            Section
      7.07 Compensation and Indemnity.

                          	 
      	
                            20

                          
	
                            Section
      7.08 Replacement of Trustee.

                          	 
      	
                            21

                          
	
                            Section
      7.09 Successor Trustee by Merger, etc.

                          	 
      	
                            21

                          
	
                            Section
      7.10 Eligibility; Disqualification.

                          	 
      	
                            21

                          
	
                            Section
      7.11 Preferential Collection of Claims Against Company.

                          	 
      	
                            21

                          
	 
      	 
      	 
      
	
                            ARTICLE
      VIII           SATISFACTION
      AND DISCHARGE; DEFEASANCE

                          	 
      	
                            21

                          
	 
      	 
      	 
      
	
                            Section
      8.01 Satisfaction and Discharge of Indenture.

                          	 
      	
                            21

                          
	
                            Section
      8.02 Application of Trust Funds; Indemnification.

                          	 
      	
                            22

                          
	
                            Section
      8.03 Legal Defeasance of Securities of any Series.

                          	 
      	
                            23

                          
	
                            Section
      8.04 Covenant Defeasance.

                          	 
      	
                            24

                          
	
                            Section
      8.05 Repayment to Company.

                          	 
      	
                            25

                          
	
                            Section
      8.06 Reinstatement.

                          	 
      	
                            25

                          
	 
      	 
      	 
      
	
                            ARTICLE
      IX             AMENDMENTS
      AND WAIVERS

                          	 
      	
                            25

                          
	 
      	 
      	 
      
	
                            Section
      9.01 Without Consent of Holders.

                          	 
      	
                            25

                          
	
                            Section
      9.02 With Consent of Holders.

                          	 
      	
                            26

                          
	
                            Section
      9.03 Limitations.

                          	 
      	
                            26

                          
	
                            Section
      9.04 Compliance with Trust Indenture Act.

                          	 
      	
                            27

                          
	
                            Section
      9.05 Revocation and Effect of Consents.

                          	 
      	
                            27

                          
	
                            Section
      9.06 Notation on or Exchange of Securities.

                          	 
      	
                            27

                          
	
                            Section
      9.07 Trustee Protected.

                          	 
      	
                            27

                          
	 
      	 
      	 
      
	
                            ARTICLE
      X              
      MISCELLANEOUS

                          	 
      	
                            27

                          
	 
      	 
      	 
      
	
                            Section
      10.01 Trust Indenture Act Controls.

                          	 
      	
                            27

                          
	
                            Section
      10.02 Notices.

                          	 
      	
                            27

                          

                  

                

              

            

          

        

      

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    (continued)

    

    
      
        
          
            
              	
                      Section
      10.03 Communication by Holders with Other Holders.

                    	 
      	
                      28

                    
	
                      Section
      10.04 Certificate and Opinion as to Conditions Precedent.

                    	 
      	
                      28

                    
	
                      Section
      10.05 Statements Required in Certificate or Opinion.

                    	 
      	
                      28

                    
	
                      Section
      10.06 Rules by Trustee and Agents.

                    	 
      	
                      28

                    
	
                      Section
      10.07 Legal Holidays.

                    	 
      	
                      29

                    
	
                      Section
      10.08 No Recourse Against Others.

                    	 
      	
                      29

                    
	
                      Section
      10.09 Counterparts.

                    	 
      	
                      29

                    
	
                      Section
      10.10 Governing Laws.

                    	 
      	
                      29

                    
	
                      Section
      10.11 No Adverse Interpretation of Other Agreements.

                    	 
      	
                      29

                    
	
                      Section
      10.12 Successors.

                    	 
      	
                      29

                    
	
                      Section
      10.13 Severability.

                    	 
      	
                      29

                    
	
                      Section
      10.14 Table of Contents, Headings, Etc.

                    	 
      	
                      29

                    
	
                      Section
      10.15 Securities in a Foreign Currency.

                    	 
      	
                      29

                    
	
                      Section
      10.16 Judgment Currency.

                    	 
      	
                      30

                    
	 
      	 
      	 
      
	
                      ARTICLE
      XI             SINKING
      FUNDS

                    	 
      	
                      30

                    
	 
      	 
      	 
      
	
                      Section
      11.01 Applicability of Article.

                    	 
      	
                      30

                    
	
                      Section
      11.02 Satisfaction of Sinking Fund Payments with
    Securities.

                    	 
      	
                      30

                    
	
                      Section
      11.03 Redemption of Securities for Sinking Fund.

                    	 
      	
                      31

                    

            

          

        

      

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    

    ACORN
ENERGY, INC.

    Reconciliation
and tie between Trust Indenture Act of 1939 and

    Indenture,
dated as of_______, ____

     

    
      	
              Section
      310

            	
                

            	
              (a)(1)

            	
                

            	
              7.10

            
	 
      	
                

            	
              (a)(2)

            	
                

            	
              7.10

            
	 
      	
                

            	
              (a)(3)

            	
                

            	
              NOT
      APPLICABLE

            
	 
      	
                

            	
              (a)(4)

            	
                

            	
              NOT
      APPLICABLE

            
	 
      	
                

            	
              (a)(5)

            	
                

            	
              7.10

            
	 
      	
                

            	
              (b)

            	
                

            	
              7.10

            
	
              Section
      311

            	
                

            	
              (a)

            	
                

            	
              7.11

            
	 
      	
                

            	
              (b)

            	
                

            	
              7.11

            
	 
      	
                

            	
              (c)

            	
                

            	
              NOT
      APPLICABLE

            
	
              Section
      312

            	
                

            	
              (a)

            	
                

            	
              2.06

            
	 
      	
                

            	
              (b)

            	
                

            	
              10.03

            
	 
      	
                

            	
              (c)

            	
                

            	
              10.03

            
	
              Section
      313

            	
                

            	
              (a)

            	
                

            	
              7.06

            
	 
      	
                

            	
              (b)(1)

            	
                

            	
              7.06

            
	 
      	
                

            	
              (b)(2)

            	
                

            	
              7.06

            
	 
      	
                

            	
              (c)(1)

            	
                

            	
              7.06

            
	 
      	
                

            	
              (d)

            	
                

            	
              7.06

            
	
              Section
      314

            	
                

            	
              (a)

            	
                

            	
              4.02,
      10.05

            
	 
      	
                

            	
              (b)

            	
                

            	
              NOT
      APPLICABLE

            
	 
      	
                

            	
              (c)(1)

            	
                

            	
              10.04

            
	 
      	
                

            	
              (c)(2)

            	
                

            	
              10.04

            
	 
      	
                

            	
              (c)(3)

            	
                

            	
              NOT
      APPLICABLE

            
	 
      	
                

            	
              (d)

            	
                

            	
              NOT
      APPLICABLE

            
	 
      	
                

            	
              (e)

            	
                

            	
              10.05

            
	 
      	
                

            	
              (f)

            	
                

            	
              NOT
      APPLICABLE

            
	
              Section
      315

            	
                

            	
              (a)

            	
                

            	
              7.01

            
	 
      	
                

            	
              (b)

            	
                

            	
              7.05

            
	 
      	
                

            	
              (c)

            	
                

            	
              7.01

            
	 
      	
                

            	
              (d)

            	
                

            	
              7.01

            
	 
      	
                

            	
              (e)

            	
                

            	
              6.14

            
	
              Section
      316

            	
                

            	
              (a)

            	
                

            	
              2.09

            
	 
      	
                

            	
              (a)(1)(a)

            	
                

            	
              6.12

            
	 
      	
                

            	
              (a)(1)(b)

            	
                

            	
              6.13

            
	 
      	
                

            	
              (b)

            	
                

            	
              6.08

            
	
              Section
      317

            	
                

            	
              (a)(1)

            	
                

            	
              6.03

            
	 
      	
                

            	
              (a)(2)

            	
                

            	
              6.04

            
	 
      	
                

            	
              (b)

            	
                

            	
              2.05

            
	
              Section
      318

            	
                

            	
              (a)

            	
                

            	
              10.01

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    Indenture
dated as of_______, ____ between Acorn Energy, Inc.., a Delaware corporation
(“Company”), and
_______, a _______ corporation, as trustee (“ Trustee ”).

    

    Each
party agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the Securities issued under this
Indenture.

    

    ARTICLE
I

    DEFINITIONS
AND INCORPORATION BY REFERENCE

     

    Section 1.01
Definitions.

    

    “Additional Amounts” means any
additional amounts which are required hereby or by any Security, under
circumstances specified herein or therein, to be paid by the Company in respect
of certain taxes imposed on Holders specified herein or therein and which are
owing to such Holders.

    

    “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
the purposes of this definition, “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”), 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 or by agreement
or otherwise.

    

    “Agent” means any Registrar,
Paying Agent or Service Agent.

    

    “Applicable Procedures”
means, with respect to any transfer or transaction involving a Global Security
or beneficial interest therein, the rules and procedures of DTC or any successor
Depositary, in each case to the extent applicable to such transaction and as in
effect from time to time.

    

    “Authorized Newspaper” means a
newspaper in an official language of the country of publication customarily
published at least once a day for at least five days in each calendar week and
of general circulation in the place in connection with which the term is used.
If it shall be impractical in the opinion of the Trustee to make any publication
of any notice required hereby in an Authorized Newspaper, any publication or
other notice in lieu thereof that is made or given by the Trustee shall
constitute a sufficient publication of such notice.

    

    “Bearer” means anyone in
possession from time to time of a Bearer Security.

    

    “Bearer Security” means any
Security, including any interest coupon appertaining thereto, that does not
provide for the identification of the Holder thereof.

    

    “Board of Directors” means the
Board of Directors of the Company 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 adopted by the Board of Directors or pursuant to
authorization by the Board of Directors and to be in full force and effect on
the date of the certificate and delivered to the Trustee.

    

    “Business Day” means, unless
otherwise provided by Board Resolution, Officers’ Certificate or supplemental
indenture hereto for a particular Series, any day except a Saturday, Sunday or a
legal holiday in The City of New York on which banking institutions are
authorized or required by law, regulation or executive order to
close.

    

    “Capital Interests” means any
and all shares, interests, participations, rights or other equivalents (however
designated) of capital stock, including, without limitation, with respect to
partnerships, partnership interests (whether general or limited) and any other
interest or participation that confers on a person the right to receive a share
of the profits and losses of, or distributions of assets of, such
partnership.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    “Company” means the party
named as such above until a successor replaces it and thereafter means the
successor.

    

    “Company Order” means a
written order signed in the name of the Company by two Officers, one of whom
must be the Company’s principal executive officer, principal financial officer
or principal accounting officer.

    

    “Company Request” means a
written request signed in the name of the Company by its Chief Executive
Officer, Chief Financial Officer or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.

    

    “Corporate Trust Office” means
the office of the Trustee at which at any particular time its corporate trust
business shall be principally administered.

    

    “Default” means any event
which is, or after notice or passage of time or both would be, an Event of
Default.

    

    “Depository” means, with
respect to the Securities of any Series issuable or issued in whole or part in
the form of one or more Global Securities, the person designated as Depositary
for such Series by the Company, which Depository shall be a clearing agency
registered under the Exchange Act; and if at any time there is more than one
such person, “Depository” as used with respect to the Securities of any Series
shall mean the Depository with respect to the Securities of such
Series.

    

    “Discount Security” means any
Security that provides for an amount less than the stated principal amount
thereof to be due and payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.02.

    

    “Dollars” and “$” means the currency of The
United States of America.

    

    “DTC” means the Depository
Trust Company, a New York corporation.

    

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

    

    “Foreign Currency” means any
currency or currency unit issued by a government other than the government of
The United States of America.

    

    “Foreign Government
Obligations” means, with respect to Securities of any Series that are
denominated in a Foreign Currency, (i) direct obligations of the government
that issued or caused to be issued such currency for the payment of which
obligations its full faith and credit is pledged or (ii) obligations of a
person controlled or supervised by or acting as an agency or instrumentality of
such government the timely payment of which is unconditionally guaranteed as a
full faith and credit obligation by such government, which, in either case under
clauses (i) or (ii), are not callable or redeemable at the option of the
issuer thereof.

    

    “GAAP” means generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession.

    

    “Global Security” or “Global Securities” means a
Security or Securities, as the case may be, in the form established pursuant to
Section 2.02 evidencing all or part of a Series of Securities, issued to
the Depository for such Series or its nominee, and registered in the name of
such Depository or nominee.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    “Holder” means a person in
whose name a Security is registered or the holder of a Bearer
Security.

    

    “Indenture” means this
Indenture as amended or supplemented from time to time and shall include the
form and terms of particular Series of Securities established as contemplated
hereunder.

    

    “interest” with respect to any
Discount Security which by its terms bears interest only after Maturity means
interest payable after Maturity.

    

    “Maturity,” when used with
respect to any Security or installment of principal thereof, means the date on
which the principal of such Security or such installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise.

    

    “Officer” means the Chief
Executive Officer, Chief Financial Officer, any Vice-President, the Treasurer,
the Secretary, any Assistant Treasurer or any Assistant Secretary of the
Company.

     

    “Officers’ Certificate” means
a certificate signed by two Officers, one of whom must be the Company’s
principal executive officer, principal financial officer or principal accounting
officer.

    

    “Opinion of Counsel” means a
written opinion of legal counsel who is reasonably acceptable to the Trustee.
The counsel may be an employee of or counsel to the Company.

    

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

    

    “Principal” of a Security
means the principal of the Security plus, when appropriate, the premium, if any,
on, and any Additional Amounts in respect of, the Security.

    

    “Responsible Officer” means
any officer of the Trustee in its Corporate Trust Office with direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom any
corporate trust matter is referred because of his or her knowledge of and
familiarity with a particular subject.

    

    “SEC” means the Securities and
Exchange Commission.

    

    “Securities” means the
debentures, notes or other debt instruments of the Company of any Series
authenticated and delivered under this Indenture.

    

    “Series” or “Series of Securities” means
each series of debentures, notes or other debt instruments of the Company
created pursuant to Sections 2.01 and 2.02 hereof.

    

    “Stated Maturity” means when
used with respect to any Security or any installment of principal thereof or
interest thereon, the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is
due and payable.

    

    “Subsidiary” means, with
respect to any person, any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof or, in the case of a
partnership, more than 50% of the partners’ Capital Interests (considering all
partners’ Capital Interests as a single class), is at the time owned or
controlled, directly or indirectly, by such person or one or more of the other
Subsidiaries of such person or combination thereof.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “TIA” means the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the
date of this Indenture and the rules and regulations promulgated thereunder;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, “TIA” means, to the extent required by any such amendment, the
Trust Indenture Act as so amended.

    

    “Trustee” means the person
named as the “Trustee” in the first paragraph of this instrument until a
successor Trustee shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter “Trustee” shall mean each person who is then a
Trustee hereunder, and if at any time there is more than one such person,
“Trustee” as used with respect to the Securities of any Series shall mean the
Trustee with respect to Securities of that Series.

    

    “U.S. Government Obligations”
means securities which are (i) direct obligations of The United States of
America for the payment of which its full faith and credit is pledged or
(ii) obligations of a person controlled or supervised by and acting as an
agency or instrumentality of The United States of America the payment of which
is unconditionally guaranteed as a full faith and credit obligation by The
United States of America, and which are not callable or redeemable at the option
of the issuer thereof, and shall also include a depository receipt issued by a
bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation evidenced by such depository
receipt.

     

    Section 1.02
Other Definitions.

    

    
      
        
          	
                  TERM

                	 	
                  DEFINED IN

                  SECTION

                
	
                  “Bankruptcy
      Law”

                	 	
                  6.01

                
	
                  “Custodian”

                	 	
                  6.01

                
	
                  “Event of
      Default”

                	 	
                  6.01

                
	
                  “Judgment
      Currency”

                	 	
                  10.16

                
	
                  “Legal
      Holiday”

                	 	
                  10.07

                
	
                  “mandatory sinking fund
      payment”

                	 	
                  11.01

                
	
                  “Market Exchange
      Rate”

                	 	
                  10.15

                
	
                  “New York Banking
      Day”

                	 	
                  10.16

                
	
                  “optional sinking fund
      payment”

                	 	
                  11.01

                
	
                  “Paying
      Agent”

                	 	
                  2.04

                
	
                  “Registrar”

                	 	
                  2.04

                
	
                  “Required
      Currency”

                	 	
                  10.16

                
	
                  “Service
      Agent”

                	 	
                  2.04

                
	
                  “successor
      person”

                	 	
                  5.01

                

        

      

    

    

    Section 1.03
Incorporation by Reference of Trust Indenture Act.

    

    Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:

    

    “Commission” means the
SEC.

    

    “indenture securities” means
the Securities.

    

    “indenture security holder”
means a Holder.

    
      
         

      

      
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    “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 successor obligor upon the
Securities.

    

    All other
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA and not
otherwise defined herein are used herein as so defined.

     

    Section 1.04
Rules of Construction.

    

    Unless
the context otherwise requires:

    

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

    

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

     

    (c)
references to “generally accepted accounting principles” and “GAAP” shall mean
generally accepted accounting principles in effect as of the time when and for
the period as to which such accounting principles are to be
applied;

    

    (d) “or”
is not exclusive;

    

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

     

    (f)
provisions apply to successive events and transactions.

    

    ARTICLE
II

    THE
SECURITIES

    

    Section 2.01 Issuable in
Series. The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be
identical except as may be set forth or determined in the manner provided in a
Board Resolution, supplemental indenture or Officers’ Certificate detailing the
adoption of the terms thereof pursuant to authority granted under a Board
Resolution. In the case of Securities of a Series to be issued from time to
time, the Board Resolution, Officers’ Certificate or supplemental indenture
detailing the adoption of the terms thereof pursuant to authority granted under
a Board Resolution may provide for the method by which specified terms (such as
interest rate, maturity date, record date or date from which interest shall
accrue) are to be determined. Securities may differ between Series in respect of
any matters, provided that all Series of Securities shall be equally and ratably
entitled to the benefits of the Indenture.

    

    Section 2.02 Establishment of
Terms of Series of Securities. At or prior to the issuance of any
Securities within a Series, the following shall be established (as to the Series
generally, in the case of Subsection 2.02(a) and either as to such Securities
within the Series or as to the Series generally in the case of Subsections
2.02(b) through 2.02(s) by or pursuant to a Board Resolution, and set forth or
determined in the manner provided in a Board Resolution, supplemental indenture
or an Officers’ Certificate:

     

    (a) the
form and title of the Series (which shall distinguish the Securities of that
particular Series from the Securities of any other Series);

     

    (b) the
price or prices (expressed as a percentage of the principal amount thereof) at
which the Securities of the Series will be issued;

    
      
         

      

      
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    (c) any
limit upon the aggregate principal amount of the Securities of the Series which
may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the Series pursuant to
Section 2.07, 2.08, 2.11, 3.06 or 9.06);

    

    (d) the
date or dates on which the principal of the Securities of the Series is
payable;

    

    (e) the
rate or rates (which may be fixed or variable) per annum or, if applicable, the
method used to determine such rate or rates (including, but not limited to, any
commodity, commodity index, stock exchange index or financial index) at which
the Securities of the Series shall bear interest, if any, the date or dates from
which such interest, if any, shall accrue, the date or dates on which such
interest, if any, shall commence and be payable and any regular record date for
the interest payable on any interest payment date;

    

    (f) the
place or places where the principal of and interest, if any, on the Securities
of the Series shall be payable, where the Securities of such Series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of such Series and
this Indenture may be served, and the method of such payment, if by wire
transfer, mail or other means;

    

    (g) if
applicable, the period or periods within which, the price or prices at which and
the terms and conditions upon which the Securities of the Series may be
redeemed, in whole or in part, at the option of the Company;

    

    (h) the
obligation, if any, of the Company to redeem or purchase the Securities of the
Series pursuant to any sinking fund or analogous provisions or at the option of
a Holder thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the Series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;

    

    (i) the
dates, if any, on which and the price or prices at which the Securities of the
Series will be repurchased by the Company at the option of the Holders thereof
and other detailed terms and provisions of such repurchase
obligations;

    

    (j) if
other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Securities of the Series shall be
issuable;

    

    (k) if
other than the principal amount thereof, the portion of the principal amount of
the Securities of the Series that shall be payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.02;

    

    (l) the
currency of denomination of the Securities of the Series, which may be Dollars
or any Foreign Currency, and the agency or organization, if any, responsible for
overseeing such composite currency;

    

    (m) the
provisions, if any, relating to any security provided for the Securities of the
Series;

    

    (n) any
addition to or change in the Events of Default which applies to any Securities
of the Series and any change in the right of the Trustee or the requisite
Holders of such Securities to declare the principal amount thereof due and
payable pursuant to Section 6.02;

    

    (o) any
addition to or change in the covenants set forth in Articles IV or V which
applies to Securities of the Series;

    

    (p) the
provisions, if any, relating to conversion of any Securities of such Series,
including, if applicable, the securities into which the Securities are
convertible, the conversion price, the conversion period, provisions as to
whether conversion will be mandatory, at the option of the Holders or at the
option of the Company, the events requiring an adjustment of the conversion
price and provisions affecting conversion if such Series of Securities are
redeemed;

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    (q)
whether the Securities of such Series will be senior debt securities or
subordinated debt securities and, if applicable, a description of the
subordination terms thereof;

    

    (r) any
depositaries, interest rate calculation agents, exchange rate calculation agents
or other agents with respect to Securities of such Series if other than those
appointed herein; and

    

    (s) any
other terms of the Securities of the Series (which may modify or delete any
provision of this Indenture insofar as it applies to such Series).

    

    All
Securities of any one Series need not be issued at the same time and may be
issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to the Board Resolution, supplemental indenture hereto
or Officers’ Certificate referred to above, and, unless otherwise provided in
such Board Resolution, a Series may be reopened, without the consent of the
Holders, for increases in the aggregate principal amount of such Series and
issuances of additional Securities of such Series.

    

    Section 2.03 Execution and
Authentication. Two Officers shall sign the Securities for the Company by
manual or facsimile signature. If an Officer whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security
shall nevertheless be valid. A Security shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture. The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture hereto or Officers’ Certificate, upon receipt
by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers’ Certificate. The aggregate principal amount of
Securities of any Series outstanding at any time may not exceed any limit upon
the maximum principal amount for such Series set forth in the Board Resolution,
supplemental indenture hereto or Officers’ Certificate delivered pursuant to
Section 2.02, except as provided in Section 2.02 or 2.08. Prior to the
issuance of Securities of any Series, the Trustee shall have received and
(subject to Section 7.02) shall be fully protected in relying on:
(a) the Board Resolution, supplemental indenture hereto or Officers’
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers’ Certificate complying
with Section 10.04 and (c) an Opinion of Counsel complying with
Section 10.04. The Trustee shall have the right to decline to authenticate
and deliver any Securities of such Series: (a) if the Trustee, being
advised by counsel, determines that such action may not be taken lawfully; or
(b) if the Trustee’s by its board of directors or trustees, executive
committee or a trust committee of directors and/or vice-presidents shall
determine in good faith that such action would expose the Trustee to personal
liability to Holders of any then outstanding Series of Securities. The Trustee
may appoint an authenticating agent acceptable to the Company to authenticate
Securities. An 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. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the
Company.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Section 2.04 Registrar and
Paying Agent. The Company shall maintain, with respect to each Series of
Securities, at the place or places specified with respect to such Series
pursuant to Section 2.02, an office or agency where Securities of such
Series may be presented or surrendered for payment (“Paying Agent”), where
Securities of such Series may be surrendered for registration of transfer or
exchange (“Registrar”) and where notices and demands to or upon the Company in
respect of the Securities of such Series and this Indenture may be served
(“Service Agent”). The Registrar shall keep a register with respect to each
Series of Securities and to their transfer and exchange. The Company will give
prompt written notice to the Trustee of the name and address, and any change in
the name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands. The Company may also from time to time designate one or
more co-registrars, additional paying agents or additional service agents 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
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.02 for Securities of any Series
for such purposes. The Company will give prompt written notice to the Trustee of
any such designation or rescission and of any change in the name or address of
any such co-registrar, additional paying agent or additional service agent. The
term “Registrar” includes any co-registrar; the term “Paying Agent” includes any
additional paying agent; and the term “Service Agent” includes any additional
service agent. The Company hereby appoints the Trustee the initial Registrar,
Paying Agent and Service Agent for each Series unless another Registrar, Paying
Agent or Service Agent, as the case may be, is appointed prior to the time
Securities of that Series are first issued.

    

    Section 2.05 Paying Agent to
Hold Money in Trust. The Company shall require each Paying Agent other
than the Trustee to agree in writing that the Paying Agent will hold in trust,
for the benefit of Holders of any Series of Securities, or the Trustee, all
money held by the Paying Agent for the payment of principal of or interest on
the Series of Securities, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary of the Company) shall have no further liability
for the money. If the Company or a Subsidiary of the Company acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
Holders of any Series of Securities all money held by it as Paying
Agent.

    

    Section 2.06 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 of each Series of Securities and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least ten (10) 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 of each Series of Securities.

    

    Section 2.07 Transfer and
Exchange. Where Securities of a Series are presented to the Registrar or
a co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar’s request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.06 or
9.06). Neither the Company nor the Registrar shall be required (a) to
issue, register the transfer of, or exchange Securities of any Series for the
period beginning at the opening of business fifteen days immediately preceding
the mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series
selected, called or being called for redemption as a whole or the portion being
redeemed of any such Securities selected, called or being called for redemption
in part.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Section 2.08
Mutilated, Destroyed, Lost and Stolen Securities.

    (a) If
any mutilated Security is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and make available for delivery in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding. If there shall be
delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a protected purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
make available for delivery, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding. In case any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, the Company in its discretion may, instead of issuing a new
Security, pay such Security.

    

    (b) Upon
the issuance of any new Security under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith. Every new Security of any
Series issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
Series duly issued hereunder. The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.

     

    Section 2.09 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 on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding. If a Security is replaced pursuant
to Section 2.08, it ceases to be outstanding until the Trustee receives
proof satisfactory to it that the replaced Security is held by a protected
purchaser. If the Paying Agent (other than the Company, a Subsidiary of the
Company or an Affiliate of the Company) holds on the Maturity of Securities of a
Series money sufficient to pay such Securities payable on that date, then on and
after that date such Securities of the Series cease to be outstanding and
interest on them ceases to accrue. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security. In
determining whether the Holders of the requisite principal amount of outstanding
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, the principal amount of a Discount Security that
shall be deemed to be outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 6.02.

     

    Section 2.10 Treasury
Securities. In determining whether the Holders of the required principal
amount of Securities of a Series have concurred in any request, demand,
authorization, direction, notice, consent or waiver, Securities of a Series
owned by the Company shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.

    

    Section 2.11 Temporary
Securities. Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities upon
a Company Order. 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 upon request shall authenticate definitive
Securities of the same Series and date of maturity in exchange for temporary
Securities. Until so exchanged, temporary securities shall have the same rights
under this Indenture as the definitive Securities.

    

    Section 2.12 Cancellation.
The Company at any time may deliver Securities to the Trustee 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 shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation in accordance with its
customary procedures and deliver such canceled Securities to the Company, unless
the Company otherwise directs; provided that the Trustee shall not be required
to destroy Securities. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for
cancellation.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    Section 2.13 Defaulted
Interest. If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Holders of the Series on a subsequent special record date. The Company shall fix
the record date and payment date. At least ten (10) days before the record
date, the Company shall mail to the Trustee and to each Holder of the Series a
notice that states the record date, the payment date and the amount of interest
to be paid. The Company may pay defaulted interest in any other lawful
manner.

     

    Section 2.14
Global Securities

    

    (a) Terms
of Securities. A Board Resolution, a supplemental indenture hereto or an
Officers’ Certificate shall establish whether the Securities of a Series shall
be issued in whole or in part in the form of one or more Global Securities and
the Depository for such Global Security or Securities.

    

    (b)
Transfer and Exchange. Notwithstanding any provisions to the contrary contained
in Section 2.07 of the Indenture and in addition thereto, any Global
Security shall be exchangeable pursuant to Section 2.07 of the Indenture
for Securities registered in the names of Holders other than the Depository for
such Security or its nominee only if (i) such Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository registered as a clearing agency under the
Exchange Act within 90 days of such event, (ii) the Company executes and
delivers to the Trustee an Officers’ Certificate to the effect that such Global
Security shall be so exchangeable or (iii) an Event of Default with respect
to the Securities represented by such Global Security shall have happened and be
continuing. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Securities registered in such names as the
Depository shall direct in writing in an aggregate principal amount equal to the
principal amount of the Global Security with like tenor and terms.

    

    (c)
Except as provided in this Section 2.14(c), a Global Security may not be
transferred except as a whole by the Depository with respect to such Global
Security to a nominee of such Depository, by a nominee of such Depository to
such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.

    

    (d)
Legend. Any Global Security issued hereunder shall bear a legend in
substantially the following form:

    

    (e) “This
Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depository or a nominee of the
Depository. This Security is exchangeable for Securities registered in the name
of a person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and may not be transferred except as a
whole by the Depository to a nominee of the Depository, by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such a
successor Depository.”

    

    (f) Acts
of Holders. The Depository, as a Holder, may appoint agents and otherwise
authorize participants to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a Holder is entitled to
give or take under the Indenture.

    

    (g)
Payments. Notwithstanding the other provisions of this Indenture, unless
otherwise specified as contemplated by Section 2.02, payment of the
principal of and interest, if any, on any Global Security shall be made to the
Holder thereof.

    
      
         

      

      
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    (h)
Consents, Declaration and Directions. Except as provided in
Section 2.14(g), the Company, the Trustee and any Agent shall treat a
person as the Holder of such principal amount of outstanding Securities of such
Series represented by a Global Security as shall be specified in a written
statement of the Depository with respect to such Global Security, for purposes
of obtaining any consents, declarations, waivers or directions required to be
given by the Holders pursuant to this Indenture.

    

    (i) The
Depository or its nominee, as registered owner of a Global Security, shall be
the Holder of such Global Security for all purposes under the Indenture and the
Securities, and owners of beneficial interests in a Global Security shall hold
such interests pursuant to the Applicable Procedures. Accordingly, any such
owner’s beneficial interest in a Global Security will be shown only on, and the
transfer of such interest shall be effected only through, records maintained by
the Depositary or its nominee and such owners of beneficial interests in a
Global Security will not be considered the owners or holders
thereof.

    

    Section 2.15 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 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 elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in “CUSIP” numbers of which the
Company becomes aware.

    

    ARTICLE
III

    REDEMPTION

    

    Section 3.01 Notice to Trustee.
The Company may, with respect to any Series of Securities, reserve the
right to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof prior to the Stated Maturity
thereof at such time and on such terms as provided for in such Securities. If a
Series of Securities is redeemable and the Company wants or is obligated to
redeem prior to the Stated Maturity thereof all or part of the Series of
Securities pursuant to the terms of such Securities, it shall notify the Trustee
of the redemption date and the principal amount of Series of Securities to be
redeemed.

    

    Section 3.02 Selection of
Securities to be Redeemed. Unless otherwise indicated for a particular
Series by a Board Resolution, a supplemental indenture or an Officers’
Certificate, if less than all the Securities of a Series are to be redeemed, the
Trustee shall select the Securities of the Series to be redeemed in any manner
that the Trustee deems fair and appropriate. The Trustee shall make the
selection from Securities of the Series outstanding not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities of the Series that have denominations larger than $1,000. Securities
of the Series and portions of them it selects shall be in amounts of $1,000 or
whole multiples of $1,000 or, with respect to Securities of any Series issuable
in other denominations pursuant to Section 2.02(j), the minimum principal
denomination for each Series and integral multiples thereof. Provisions of this
Indenture that apply to Securities of a Series called for redemption also apply
to portions of Securities of that Series called for redemption.

     

    Section 3.03
Notice of Redemption.

    

    (a)
Unless otherwise indicated for a particular Series by Board Resolution, a
supplemental indenture hereto or an Officers’ Certificate, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail a notice
of redemption by first-class mail to each Holder whose Securities are to be
redeemed and, if any Bearer Securities are outstanding, publish on one occasion
a notice in an Authorized Newspaper. The notice shall identify the Securities of
the Series to be redeemed and shall state:

    

    (i) the
redemption date;

    

    (ii) the
redemption price;

    
      
         

      

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

    

    (iv) that
Securities of the Series called for redemption must be surrendered to the Paying
Agent to collect the redemption price;

    

    (v) that
interest on Securities of the Series called for redemption ceases to accrue on
and after the redemption date;

    

    (vi) the
CUSIP number, if any; and

     

    (vii) any
other information as may be required by the terms of the particular Series or
the Securities of a Series being redeemed.

     

    At the
Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at its expense.

    

    Section 3.04 Effect of Notice of
Redemption. Once notice of redemption is mailed or published as provided
in Section 3.03, Securities of a Series called for redemption become due
and payable on the redemption date and at the redemption price. A notice of
redemption may not be conditional.  Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price plus accrued
interest to the redemption date; provided that installments of interest whose
Stated Maturity is on or prior to the redemption date shall be payable to the
Holders of such Securities (or one or more predecessor Securities) registered at
the close of business on the relevant record date therefor according to their
terms and the terms of this Indenture.

     

    Section 3.05 Deposit of
Redemption Price.
On or before 10:00 a.m., New York City time, on the redemption date, the Company
shall deposit with the Paying Agent money sufficient to pay the redemption price
of and accrued interest, if any, on all Securities to be redeemed on that
date.

    

    Section 3.06 Securities Redeemed
in Part. Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security of the same Series and
the same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.

    

    ARTICLE
IV

    COVENANTS

    

    Section 4.01 Payment of
Principal and Interest. The Company covenants and agrees for the benefit
of the Holders of each Series of Securities that it will duly and punctually pay
the principal of and interest, if any, on the Securities of that Series in
accordance with the terms of such Securities and this Indenture.

     

    Section 4.02 SEC Reports.
The Company shall, so long as any of the Securities are outstanding,
electronically file with the Commission the annual, quarterly and other periodic
reports that the Company is required to file (or would be otherwise required to
file) with the Commission pursuant to Sections 13 and 15(d) of the Exchange Act.
The Company also shall comply with the other provisions of TIA
Section 314(a). Delivery of any reports, information and documents to the
Trustee is for informational purposes only and the Trustee’s receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officers’ Certificate).

    

    Section 4.03 Compliance
Certificate. The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company, an Officers’ Certificate stating whether or not to
the knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions hereof
(without regard to any period of grace or requirement of notice provided
hereunder), and if a Default or Event of Default shall have occurred, specifying
all such Defaults or Events of Default and the nature and status thereof of
which they may have knowledge. The Company shall, so long as any of the
Securities are outstanding, deliver to the Trustee, within thirty (30) days
after 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.

    
      
         

      

      
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    Section 4.04 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, which may affect the
covenants or the performance of this Indenture or the Securities and the Company
(to the extent 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

    SUCCESSORS

    

    Section 5.01 When Company May
Merge, Etc. The Company shall not consolidate with or merge with or into,
or convey, transfer or lease all or substantially all of its properties and
assets to, any person (a “successor person”) unless:

    

    (a) the
Company is the surviving corporation or the successor person (if other than the
Company) is organized and validly existing under the laws of Delaware or any
U.S. domestic jurisdiction and expressly assumes the Company’s obligations on
the Securities and under this Indenture; and

    

    (b)
immediately after giving effect to the transaction, no Default or Event of
Default shall have occurred and be continuing.

    

    The
Company shall deliver to the Trustee prior to the consummation of the proposed
transaction an Officers’ Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and any supplemental indenture
comply with this Indenture.

    

    Section 5.02 Successor
Corporation Substituted. Upon any consolidation or merger, or any sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, lease, conveyance or other disposition is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor person
has been named as the Company herein; provided, however, that the predecessor
Company in the case of a sale, conveyance or other disposition (other than a
lease) shall be released from all obligations and covenants under this Indenture
and the Securities.

    

    ARTICLE
VI

    DEFAULTS
AND REMEDIES

     

    Section 6.01
Events of Default.

    

    “Event of Default,” wherever
used herein with respect to Securities of any Series, means any one of the
following events, unless in the establishing Board Resolution, supplemental
indenture or Officers’ Certificate, it is provided that such Series shall not
have the benefit of said Event of Default:

    

    (a)
default in the payment of any interest on any Security of that Series when it
becomes due and payable, and continuance of such default for a period of 30 days
(unless the entire amount of such payment is deposited by the Company with the
Trustee or with a Paying Agent prior to the expiration of such period of 30
days); or

    
      
         

      

      
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    (b)
default in the payment of principal of any Security of that Series at its
Maturity; or

    

    (c)
default in the performance or breach of any covenant or warranty of the Company
in this Indenture (other than a covenant or warranty for which the consequences
of nonperformance or breach are addressed elsewhere in this Section 6.01
and other than a covenant or warranty that has been included in this Indenture
solely for the benefit of Series of Securities other than that Series), which
default continues uncured for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of not less than a majority in principal amount
of the outstanding Securities of that Series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a “Notice of Default” hereunder; or

    

    (d) the
Company 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,

    

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

    

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

    

    (v) makes
an admission by writing that it is generally unable to pay its debts as the same
become due; or

    

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

    

    (i) is
for relief against the Company in an involuntary case,

    

    (ii)
appoints a Custodian of the Company or for all or substantially all of its
property, or

    

    (iii)
orders the liquidation of the Company, and the order or decree remains unstayed
and in effect for 90 days; or

    

    (f) any
other Event of Default provided with respect to Securities of that Series, which
is specified in a Board Resolution, a supplemental indenture hereto or an
Officers’ Certificate, in accordance with Section 2.02(n).

    

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

    

    Section 6.02 Acceleration of
Maturity; Rescission and Annulment. If an Event of Default with respect
to Securities of any Series at the time outstanding occurs and is continuing
(other than an Event of Default referred to in Section 6.1(d) or (e)), then
in every such case the Trustee or the Holders of not less than a majority in
principal amount of the outstanding Securities of that Series may declare the
principal amount (or, if any Securities of that Series are Discount Securities,
such portion of the principal amount as may be specified in the terms of such
Securities) of and accrued and unpaid interest, if any, on all of the Securities
of that Series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) and accrued and unpaid interest, if
any, shall become immediately due and payable. If an Event of Default specified
in Section 6.1(d) or (e) shall occur, the principal amount (or
specified amount) of and accrued and unpaid interest, if any, on all outstanding
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder. At any
time after such a declaration of acceleration with respect to any Series has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount of the outstanding Securities of that Series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if all Events of Default with respect to
Securities of that Series, other than the non-payment of the principal and
interest, if any, of Securities of that Series which have become due solely by
such declaration of acceleration, have been cured or waived as provided in
Section 6.13. No such rescission shall affect any subsequent Default or
impair any right consequent thereon.

    
      
         

      

      
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    Section 6.03
Collection of Indebtedness and Suits for Enforcement by Trustee.

    

    The
Company covenants that if:

    

    (a)
default is made in the payment of any interest on any Security when such
interest becomes due and payable and such default continues for a period of 30
days, or

    

    (b)
default is made in the payment of principal of any Security at the Maturity
thereof,

    

    then the
Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and any
overdue interest at the rate or rates prescribed therefor in such Securities
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel.

    

    If the
Company fails to pay such amounts forthwith upon such demand, the Trustee, in
its own name and as trustee of an express trust, may institute a judicial
proceeding for the collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same against the
Company or any other obligor upon such Securities and collect the moneys
adjudged or deemed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.

    

    If an
Event of Default with respect to any Securities of any Series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities of such Series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

    

    Section 6.04 Trustee May File
Proofs of Claim. In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise, (a) to file
and prove a claim for the whole amount of principal and interest owing and
unpaid in respect of the Securities and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and of the Holders allowed
in such judicial proceeding, and (b) to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

    
      
         

      

      
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    Section 6.05 Trustee May Enforce
Claims Without Possession of Securities. All rights of action and claims
under this Indenture or the Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.

     

    Section 6.06
Application of Money Collected.

    

    Any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

    

    First: To
the payment of all amounts due the Trustee under Section 7.07;
and

    

    Second:
To the payment of the amounts then due and unpaid for principal of and interest
on the Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal and interest,
respectively; and

    

    Third: To
the Company.

    

    Section 6.07 Limitation on
Suits. No Holder of any Security of any Series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

    

    (a) such
Holder has previously given written notice to the Trustee of a continuing Event
of Default with respect to the Securities of that Series;

    

    (b) the
Holders of at least a majority in principal amount of the outstanding Securities
of that Series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;

    

    (c) such
Holder or Holders have offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such
request;

    

    (d) the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

     

    (e) no
direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in principal amount of
the outstanding Securities of that Series; 

    
      

      
        
          
          

        

        
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    it being
understood and intended that no one or more of such Holders shall have any right
in any manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other of such
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all such
Holders.

    

    Section 6.08 Unconditional Right
of Holders to Receive Principal and Interest. Notwithstanding any other
provision in this Indenture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
interest, if any, on such Security on the Stated Maturity or Stated Maturities
expressed in such Security (or, in the case of redemption, on the redemption
date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.

    

    Section 6.09 Restoration of
Rights and Remedies. If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been
instituted.

    

    Section 6.10 Rights and Remedies
Cumulative. Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in
Section 2.08, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not, to the
extent permitted by law, prevent the concurrent assertion or employment of any
other appropriate right or remedy.

    

    Section 6.11 Delay or Omission
Not Waiver. No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.

    

    Section 6.12 Control by Holders.
The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that:

    

    (a) such
direction shall not be in conflict with any rule of law or with this
Indenture,

    

    (b) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and

     

    (c)
subject to the provisions of Section 6.01, the Trustee shall have the right
to decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer of the Trustee, determine that the proceeding so directed
would involve the Trustee in personal liability.

    

    Section 6.13 Waiver of Past
Defaults. The Holders of not less than a majority in principal amount of
the outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive any past Default hereunder with respect to such
Series and its consequences, except a Default (i) in the payment of the
principal of or interest on any Security of such Series (provided, however, that
the Holders of a majority in principal amount of the outstanding Securities of
any Series may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration) or (ii) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each outstanding Security of such Series
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

    
      
         

      

      
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    Section 6.14 Undertaking for
Costs. All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption
date).

    

    ARTICLE
VII

    TRUSTEE

     

    Section 7.01
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 need perform only those duties that are specifically set forth in this
Indenture and no others.

     

    (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 Officers’ Certificates or Opinions of Counsel furnished to the
Trustee and conforming to the requirements of this Indenture; however, in the
case of any such Officers’ Certificates or Opinions of Counsel which by any
provisions hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such Officers’ Certificates and Opinions of Counsel to
determine whether or not they conform to the requirements of this
Indenture.

    

    (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:

    

    (i) This
paragraph does not limit the effect of paragraph (b) of this
Section.

    

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

    

    (iii) The
Trustee shall not be liable with respect to any action taken, suffered or
omitted to be taken by it with respect to Securities of any Series in good faith
in accordance with the direction of the Holders of a majority in principal
amount of the outstanding Securities of such Series relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such Series.

    
      
         

      

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

    

    (e) The
Trustee may refuse to perform any duty or exercise any right or power at the
request or direction of any Holder unless it receives indemnity satisfactory to
it against any loss, liability or expense.

    

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

    

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

     

    (h) The
Paying Agent, the Registrar and any Service Agent or authenticating agent shall
be entitled to the protections, immunities and standard of care as are set forth
in paragraphs (a), (b) and (c) of this Section with respect to the
Trustee.

     

    Section 7.02
Rights of Trustee.

    

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

    

    (b)
Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers’ Certificate.

    

    (c) The
Trustee may act through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care. No Depository shall be
deemed an agent of the Trustee, and the Trustee shall not be responsible for any
act or omission by any Depository.

    

    (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,
provided that the Trustee’s conduct does not constitute negligence or bad
faith.

    

    (e) The
Trustee may consult with counsel, and the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder without negligence and in
good faith and in reliance thereon.

    

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

    

    (g) The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.

    
      
         

      

      
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    (h) The
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is received
by the Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Securities generally or the Securities of a particular Series and
this Indenture.

     

    (i) The
permissive rights of the Trustee enumerated herein shall not be construed as
duties.

     

    Section 7.03 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 an Affiliate of the Company with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. The Trustee is
also subject to Sections 7.10 and 7.11.

    

    Section 7.04 Trustee’s
Disclaimer. The Trustee 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, and it shall not be
responsible for any statement in the Securities other than its
authentication.

    

    Section 7.05 Notice of
Defaults. If a Default or Event of Default occurs and is continuing with
respect to the Securities of any Series and if it is known to a Responsible
Officer of the Trustee, the Trustee shall mail to each Holder of the Securities
of that Series and, if any Bearer Securities are outstanding, publish on one
occasion in an Authorized Newspaper, notice of a Default or Event of Default
within 90 days after it occurs or, if later, after a Responsible Officer of the
Trustee has knowledge of such Default or Event of Default. Except in the case of
a Default or Event of Default in payment of principal of or interest on any
Security of any Series, the Trustee may withhold the notice if and so long as
its corporate trust committee or a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of Holders of
that Series.

    

    Section 7.06 Reports by Trustee
to Holders. Within 60 days after May 15 in each year, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear on
the register kept by the Registrar and, if any Bearer Securities are
outstanding, publish in an Authorized Newspaper, a brief report dated as of such
May 15, in accordance with, and to the extent required under, TIA
Section 313. A copy of each report at the time of its mailing to Holders of
any Series shall be filed with the SEC and each stock exchange on which the
Securities of that Series are listed. The Company shall promptly notify the
Trustee when Securities of any Series are listed on any stock
exchange.

    

    Section 7.07 Compensation and
Indemnity. The Company shall pay to the Trustee from time to time
compensation for its services as the Company and the Trustee shall from time to
time agree upon in writing. 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 by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee’s agents and counsel. The Company shall indemnify each
of the Trustee and any predecessor Trustee (including the cost of defending
itself) against any loss, liability or expense, including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee)
incurred by it except as set forth in this Section 7.07 in the performance
of its duties under this Indenture as Trustee or Agent. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have one separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld. This
indemnification shall apply to officers, directors, employees, shareholders and
agents of the Trustee. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee or by any officer,
director, employee, shareholder or agent of the Trustee through the negligence
or bad faith of any such persons. To secure the Company’s payment obligations in
this Section, the Trustee shall have a lien prior to the Securities of any
Series on all money or property held or collected by the Trustee, except that
held in trust to pay principal of and interest on particular Securities of that
Series. When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(d) or (e) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. The provisions of this Section shall
survive the resignation or removal of the Trustee and the termination of this
Indenture.

    
      
         

      

      
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    Section 7.08 Replacement of
Trustee. A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee’s
acceptance of appointment as provided in this Section. The Trustee may resign
with respect to the Securities of one or more Series by so notifying the Company
at least 30 days prior to the date of the proposed resignation. The Holders of a
majority in principal amount of the Securities of any Series may remove the
Trustee with respect to that Series by so notifying the Trustee and the Company.
The Company may remove the Trustee with respect to Securities of one or more
Series if:

    

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

    

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

    

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

    

    (d) the
Trustee becomes incapable of acting.

    

    If the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Company shall promptly appoint a successor
Trustee.

    

    If a
successor Trustee with respect to the Securities of any one or more Series does
not take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of at least a majority in
principal amount of the Securities of the applicable Series may petition any
court of competent jurisdiction for the appointment of a successor
Trustee.

    

    A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee subject to the lien provided for in Section 7.07, 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 with respect
to each Series of Securities for which it is acting as Trustee under this
Indenture. A successor Trustee shall mail a notice of its succession to each
Holder of each such Series and, if any Bearer Securities are outstanding,
publish such notice on one occasion in an Authorized Newspaper. Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the Company’s
obligations under Section 7.07 hereof shall continue for the benefit of the
retiring Trustee with respect to expenses and liabilities incurred by it prior
to the date of such replacement.

    

    Section 7.09 Successor Trustee
by Merger, etc. If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee.

    

    Section 7.10 Eligibility;
Disqualification. This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The
Trustee shall comply with TIA Section 310(b).

     

    Section 7.11 Preferential
Collection of Claims Against Company. The Trustee is subject to TIA
Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b). A Trustee who has resigned or been removed shall be subject
to TIA Section 311(a) to the extent indicated.

    

    ARTICLE
VIII

    SATISFACTION
AND DISCHARGE; DEFEASANCE

     

    Section 8.01
Satisfaction and Discharge of Indenture.

     

    This
Indenture shall upon Company Order cease to be of further effect (except as
hereinafter provided in this Section 8.01), and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

     

    
      
        
        

      

      
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    (a) any
of the following shall have occurred:

    

    (i) no
Securities have been issued hereunder;

    

    (ii) all
Securities theretofore authenticated and delivered (other than Securities that
have been destroyed, lost or stolen and that have been replaced or paid) have
been delivered to the Trustee for cancellation; or

    

    (iii) all
such Securities not theretofore delivered to the Trustee for cancellation
(1) have become due and payable, or (2) will become due and payable at
their Stated Maturity within one year, or (3) are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company;

    

    and the
Company has irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust an amount sufficient for the purpose of paying and
discharging the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal and interest to the date of such
deposit (in the case of Securities which have become due and payable on or prior
to the date of such deposit) or to the Stated Maturity or redemption date, as
the case may be;

    

    (b) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company; and

    

    (c) the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied
with.

    

    Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company
to the Trustee under Section 7.07 and, if money shall have been deposited
with the Trustee pursuant to clause (a) of this Section, the provisions of
Sections 2.04
,  2.05
,  2.07, 2.08, 8.01, 8.02 and 8.05 shall survive.

     

    Section 8.02
Application of Trust Funds; Indemnification.

    

    (a)
Subject to the provisions of Section 8.05, all money deposited with the
Trustee pursuant to Section 8.01, all money and U.S. Government Obligations
or Foreign Government Obligations deposited with the Trustee pursuant to
Section 8.03 or 8.04 and all money received by the Trustee in respect of
U.S. Government Obligations or Foreign Government Obligations deposited with the
Trustee pursuant to Section 8.03 or 8.04, shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent (other
than the Company acting as its own Paying Agent) as the Trustee may determine,
to the persons entitled thereto, of the principal and interest for whose payment
such money has been deposited with or received by the Trustee or analogous
payments as contemplated by Sections 8.03 or 8.04.

    

    (b) The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against U.S. Government Obligations or Foreign
Government Obligations deposited pursuant to Sections 8.03 or 8.04 or the
interest and principal received in respect of such obligations other than any
payable by or on behalf of Holders.

    

    (c) The
Trustee shall deliver or pay to the Company from time to time upon Company
Request any U.S. Government Obligations or Foreign Government Obligations or
money held by it as provided in Sections 8.03 or 8.04 which, in the opinion of a
nationally recognized firm of independent certified public accountants expressed
in a written certification thereof delivered to the Trustee, are then in excess
of the amount thereof which then would have been required to be deposited for
the purpose for which such U.S. Government Obligations or Foreign Government
Obligations or money were deposited or received. This provision shall not
authorize the sale by the Trustee of any U.S. Government Obligations or Foreign
Government Obligations held under this Indenture.

    
      
         

      

      
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    Section 8.03 Legal Defeasance of
Securities of any Series. Unless this Section 8.03 is otherwise
specified, pursuant to Section 2.02(s), to be inapplicable to Securities of
any Series, the Company shall be deemed to have paid and discharged the entire
indebtedness on all the outstanding Securities of any Series on the 91st day
after the date of the deposit referred to in subparagraph (d) hereof, and
the provisions of this Indenture, as it relates to such outstanding Securities
of such Series, shall no longer be in effect (and the Trustee, at the expense of
the Company, shall, at Company Request, execute proper instruments acknowledging
the same), except as to:

    

    (a) the
rights of Holders of Securities of such Series to receive, from the trust funds
described in subparagraph (d) hereof, (i) payment of the principal of
and each installment of principal of and interest on the outstanding Securities
of such Series on the Stated Maturity of such principal or installment of
principal or interest, and (ii) the benefit of any mandatory sinking fund
payments applicable to the Securities of such Series on the day on which such
payments are due and payable in accordance with the terms of this Indenture and
the Securities of such Series; and

    

    (b) the
provisions of Sections 2.04, 2.05, 2.07, 2.08, 8.02, 8.03 and 8.05;
and

    

    (c) the
rights, powers, trust and immunities of the Trustee hereunder;

    

    provided
that, the following conditions shall have been satisfied:

    

    (d) with
reference to this Section 8.03, the Company shall have deposited or caused
to be irrevocably deposited (except as provided in Section 8.02(c)) with
the Trustee as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for and dedicated solely to the
benefit of the Holders of such Securities (i) in the case of Securities of
such Series denominated in Dollars, cash in Dollars and/or U.S. Government
Obligations, or (ii) in the case of Securities of such Series denominated
in a Foreign Currency (other than a composite currency), money and/or Foreign
Government Obligations, which through the payment of interest and principal in
respect thereof in accordance with their terms, will provide (and without
reinvestment and assuming no tax liability will be imposed on such Trustee), not
later than one day before the due date of any payment of money, an amount in
cash, sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge each installment of principal of and interest, if
any, on and any mandatory sinking fund payments in respect of all the Securities
of such Series on the dates such installments of interest or principal and such
sinking fund payments are due;

     

    (e) such
deposit will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the Company
is a party or by which it is bound;

    

    (f) no
Default or Event of Default with respect to the Securities of such Series shall
have occurred and be continuing on the date of such deposit or during the period
ending on the 91st day after such date;

    

    (g) the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel to the effect that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling, or
(ii) since the date of execution of this Indenture, 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
Securities of such Series will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit, defeasance and discharge and
will be subject to Federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if such deposit, defeasance
and discharge had not occurred;

    
      
         

      

      
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    (h) 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 the Securities of such Series over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company;

     

    (i) the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for
relating to the defeasance contemplated by this Section have been complied with;
and

    

    (j) such
defeasance shall not result in the trust arising from such deposit constituting
an investment company within the meaning of the Investment Company Act of 1940,
as amended, unless such trust shall be registered under such Act or exempt from
registration thereunder.

    

    Section 8.04 Covenant
Defeasance. Unless this Section 8.04 is otherwise specified,
pursuant to Section 2.02(s), to be inapplicable to Securities of any
Series, on and after the 91st day after the date of the deposit referred to in
subparagraph (a) hereof, the Company may omit to comply with respect to the
Securities of any Series with any term, provision or condition set forth under
Sections 4.02, 4.03, and 5.01 as well as any additional covenants specified in a
supplemental indenture for such Series of Securities or a Board Resolution or an
Officers’ Certificate delivered pursuant to Section 2.02 (and the failure
to comply with any such covenants shall not constitute a Default or Event of
Default with respect to such Series under Section 6.01) and the occurrence
of any event specified in a supplemental indenture for such Series of Securities
or a Board Resolution or an Officers’ Certificate delivered pursuant to
Section 2.02 and designated as an Event of Default shall not constitute a
Default or Event of Default hereunder, with respect to the Securities of such
Series, provided that the following conditions shall have been
satisfied:

    

    (a) with
reference to this Section 8.04, the Company has deposited or caused to be
irrevocably deposited (except as provided in Section 8.02(c)) with the
Trustee as trust funds in trust for the purpose of making the following payments
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities (i) in the case of Securities of such Series
denominated in Dollars, cash in Dollars and/or U.S. Government Obligations, or
(ii) in the case of Securities of such Series denominated in a Foreign
Currency (other than a composite currency), money and/or Foreign Government
Obligations, which through the payment of interest and principal in respect
thereof in accordance with their terms, will provide (and without reinvestment
and assuming no tax liability will be imposed on such Trustee), not later than
one day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge each installment of principal of
and interest, if any, on and any mandatory sinking fund payments in respect of
the Securities of such Series on the dates such installments of interest or
principal and such sinking fund payments are due;

    

    (b) such
deposit will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the Company
is a party or by which it is bound;

    

    (c) no
Default or Event of Default with respect to the Securities of such Series shall
have occurred and be continuing on the date of such deposit or during the period
ending on the 91st day after such date;

    

    (d) the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that Holders of the Securities of such Series will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and covenant
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such deposit
and covenant defeasance had not occurred;

    

    (e) the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the covenant defeasance contemplated by this Section have been
complied with; and

    
      
         

      

      
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    (f) Such
defeasance shall not result in the trust arising from such deposit constituting
an investment company within the meaning of the Investment Company Act of 1940,
as amended, unless such trust shall be registered under such Act or exempt from
registration thereunder.

    

    Section 8.05 Repayment to
Company. The Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the payment of principal and interest
that remains unclaimed for two years, and after such time, Holders entitled to
the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.

    

    Section 8.06
Reinstatement. If the Trustee or the Paying Agent is unable to apply any
money deposited with respect to Securities of any series in accordance with
Section 8.01 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 with respect to the Securities of such series and under the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.01 until such time as the Trustee or the
Paying Agent is permitted to apply all such money in accordance with
Section 8.01; provided, however, that if the Company has made any payment
of principal of, premium (if any) or interest on any Additional Amounts with
respect to 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 held by the Trustee or the Paying
Agent.

    

    ARTICLE
IX

    AMENDMENTS
AND WAIVERS

    

    Section 9.01 Without Consent of
Holders. The Company and the Trustee may amend or supplement this
Indenture or the Securities of one or more Series without the consent of any
Holder:

    

    (a) to
evidence the succession of another person to the Company under this Indenture
and the Securities and the assumption by any such successor person of the
obligations of the Company hereunder and under the Securities;

    (b) to
add or remove covenants of the Company for the benefit of the Holders of all or
any series of Securities (and if such covenants are to be for the benefit of
less than all series of Securities, stating that such covenants are expressly
being included for the benefit of such series) or to surrender any right or
power herein conferred upon the Company provided such action does not adversely
affect the interests of the Company;

     

    (c) to
add any additional Events of Default;

     

    (d) to
add to or change any of the provisions of this Indenture to such extent as shall
be necessary to permit or facilitate the issuance of Securities in bearer form,
registrable or not registrable as to principal, and with or without interest
coupons, or to permit or facilitate the issuance of Securities in uncertificated
form;

    

    (e) to
add to, change or eliminate any of the provisions of this Indenture in respect
of one or more series of Securities, provided that any such addition, change or
elimination (A) shall neither (i) apply to any Security of any series
created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor (ii) modify the rights of the Holder of
any such Security with respect to such provision or (B) shall become
effective only when there is no such Security Outstanding;

    

    (f) to
establish the forms or terms of the Securities of any series issued pursuant to
the terms hereof;

    

    (g) to
cure any ambiguity or correct any inconsistency in this Indenture;

    

    (h) to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee;

    
      
         

      

      
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    (i) to
qualify this Indenture under the Trust Indenture Act;

    

    (j) to
provide for uncertificated securities in addition to certificated
securities;

    

    (k) to
supplement any provisions of this Indenture necessary to permit or facilitate
the defeasance and discharge of any series of Securities, provided that such
action does not adversely affect the interests of the Holders of Securities of
such series or any other series; and

    

    (l) to
comply with the rules or regulations of any securities exchange or automated
quotation system on which any of the Securities may be listed or
traded.

    

    Section 9.02 With Consent of
Holders. The Company and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Holders of each such Series. Except as provided in
Section 6.13, the Holders of at least a majority in principal amount of the
outstanding Securities of any Series by notice to the Trustee (including
consents obtained in connection with a tender offer or exchange offer for the
Securities of such Series) may waive compliance by the Company with any
provision of this Indenture or the Securities with respect to such Series. It
shall not be necessary for the consent of the Holders of Securities under this
Section 9.02 to approve the particular form of any proposed supplemental
indenture or waiver, but it shall be sufficient if such consent approves the
substance thereof. After a supplemental indenture or waiver under this section
becomes effective, the Company shall mail to the Holders of Securities affected
thereby and, if any Bearer Securities affected thereby are outstanding, publish
on one occasion in an Authorized Newspaper, a notice briefly describing the
supplemental indenture or waiver. Any failure by the Company to mail or publish
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver.

    

    Section 9.03 Limitations.
Without the consent of each Holder affected, an amendment or waiver may
not:

    

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

    

    (b)
reduce the rate of or extend the time for payment of interest (including default
interest) on any Security;

    

    (c)
reduce the principal or change the Stated Maturity of any Security or reduce the
amount of, or postpone the date fixed for, the payment of any sinking fund or
analogous obligation;

    

    (d)
reduce the principal amount of Discount Securities payable upon acceleration of
the maturity thereof;

    

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

    

    (f) make
the principal of or interest, if any, on any Security payable in any currency
other than that stated in the Security;

    
      
         

      

      
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    (g) make
any change in Sections 6.08, 6.13, or 9.03; or

    

    (h) waive
a redemption payment with respect to any Security.

    

    Section 9.04 Compliance with
Trust Indenture Act. Every amendment to this Indenture or the Securities
of one or more Series shall be set forth in a supplemental indenture hereto that
complies with the TIA as then in effect.

    

    Section 9.05 Revocation and
Effect of Consents. Until an amendment is set forth in a supplemental
indenture or a waiver becomes effective, a consent to it by a Holder of a
Security is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to his
Security or portion of a Security if the Trustee receives the notice of
revocation before the date of the supplemental indenture or the date the waiver
becomes effective. Any amendment or waiver once effective shall bind every
Holder of each Series affected by such amendment or waiver unless it is of the
type described in any of clauses (a) through (h) of Section 9.03.
In that case, the amendment or waiver shall bind each Holder of a Security who
has consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder’s
Security.

    

    Section 9.06 Notation on or
Exchange of Securities. The Trustee may place an appropriate notation
about an amendment or waiver on any Security of any Series thereafter
authenticated. The Company in exchange for Securities of that Series may issue
and the Trustee shall authenticate upon request new Securities of that Series
that reflect the amendment or waiver.

    

    Section 9.07 Trustee Protected.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
in addition to the documents required by Section 10.04, and (subject to
Section 7.01) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee shall sign all supplemental
indentures, except that the Trustee need not sign any supplemental indenture
that adversely affects its rights.

    

    ARTICLE
X

    MISCELLANEOUS

    

    Section 10.01 Trust Indenture
Act Controls. If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required or deemed to be included in
this Indenture by the TIA, such required or deemed provision shall
control.

     

    Section 10.02
Notices.

    

    (a) Any
notice or communication by the Company or the Trustee to the other, or by a
Holder to the Company or the Trustee, is duly given if in writing and delivered
in person or mailed by first-class mail or sent by telecopier transmission
addressed as follows:

    

    if to the
Company:

     

    Acorn
Energy, Inc.

    4 West
Rockland Road

    Montchanin,
DE 19710

    Attention:
President

    Telephone:
(302) 656-1708

    
      
         

      

      
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    Facsimile:

    

    if to the
Trustee:

    

    [            ]

    

    (b) The
Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications. Any notice or
communication to a Holder shall be mailed by first-class mail to his address
shown on the register kept by the Registrar and, if any Bearer Securities are
outstanding, published in an Authorized Newspaper. Failure to mail a notice or
communication to a Holder of any Series or any defect in it shall not affect its
sufficiency with respect to other Holders of that or any other Series. If a
notice or communication is mailed or published in the manner provided above,
within the time prescribed, it is duly given, whether or not the Holder receives
it. If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.

    

    (c) Any
notice or demand that by any provision of this Indenture is required or
permitted to be given or served by the Company may, at the Company’s written
request received by the Trustee not fewer than five (5) Business Days prior
(or such shorter period of time as may be acceptable to the Trustee) to the date
on which such notice must be given or served, be given or served by the Trustee
in the name of and at the expense of the Company.

    

    Section 10.03 Communication by
Holders with Other Holders. Holders of any Series may communicate
pursuant to TIA Section 312(b) with other Holders of that Series or any
other Series with respect to their rights under this Indenture or the Securities
of that Series or all Series. The Company, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).

    

    Section 10.04 Certificate and
Opinion as to Conditions Precedent. Upon any request or application by
the Company to the Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:

     

    (a) an
Officers’ Certificate 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

    

    (b) an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.

     

    Section 10.05 Statements
Required in Certificate or Opinion. Each certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture (other than a certificate provided pursuant to TIA
Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:

    

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

    

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

    

    (c) a
statement that, in the opinion of such person, he 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

    

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

    

    Section 10.06 Rules by Trustee
and Agents. The Trustee may make reasonable rules for action by or a
meeting of Holders of one or more Series. Any Agent may make reasonable rules
and set reasonable requirements for its functions.

    
      
         

      

      
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    Section 10.07 Legal
Holidays. Unless otherwise provided by Board Resolution, Officers’
Certificate or supplemental indenture hereto for a particular Series, a “Legal
Holiday” is any day that is not a Business Day. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.

    

    Section 10.08 No Recourse
Against Others. A director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.

    

    Section 10.09
Counterparts. This Indenture may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

    

    Section 10.10 Governing
Laws. This Indenture and the Securities will be governed by, and
construed in accordance with, the internal laws of the State of New York,
without regard to conflict of law principles that would result in the
application of any law other than the laws of the State of New
York.

    

    Section 10.11 No Adverse
Interpretation of Other Agreements. This Indenture may not be used to
interpret another indenture, loan or debt agreement of the Company or a
Subsidiary of the Company. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.

    

    Section 10.12 Successors.
All agreements of the Company in this Indenture and the Securities shall bind
its successor. All agreements of the Trustee in this Indenture shall bind its
successor.

    

    Section 10.13
Severability. In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

    

    Section 10.14 Table of Contents,
Headings, Etc. The Table of Contents, Cross-Reference Table, and headings
of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and shall
in no way modify or restrict any of the terms or provisions hereof.

    

    Section 10.15 Securities in a
Foreign Currency. Unless otherwise specified in a Board Resolution, a
supplemental indenture hereto or an Officers’ Certificate delivered pursuant to
Section 2.02 of this Indenture with respect to a particular Series of
Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of
Securities of all Series or all Series affected by a particular action at the
time outstanding and, at such time, there are outstanding Securities of any
Series which are denominated in a coin or currency other than Dollars, then the
principal amount of Securities of such Series which shall be deemed to be
outstanding for the purpose of taking such action shall be that amount of
Dollars that could be obtained for such amount at the Market Exchange Rate at
such time. For purposes of this Section 10.15, “Market Exchange Rate” shall
mean the noon Dollar buying rate in New York City for cable transfers of that
currency as published by the Federal Reserve Bank of New York. If such Market
Exchange Rate is not available for any reason with respect to such currency, the
Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York as of the most recent
available date, or quotations from one or more major banks in The City of New
York or in the country of issue of the currency in question or such other
quotations as the Trustee, upon consultation with the Company, shall deem
appropriate. The provisions of this paragraph shall apply in determining the
equivalent principal amount in respect of Securities of a Series denominated in
currency other than Dollars in connection with any action taken by Holders of
Securities pursuant to the terms of this Indenture. All decisions and
determinations of the Trustee regarding the Market Exchange Rate or any
alternative determination provided for in the preceding paragraph shall be in
its sole discretion and shall, in the absence of manifest error, to the extent
permitted by law, be conclusive for all purposes and irrevocably binding upon
the Company and all Holders.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    

    Section 10.16 Judgment
Currency. The Company agrees, to the fullest extent that it may
effectively do so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of or interest or other amount on the Securities of any
Series (the “Required Currency”) into a currency in which a judgment will be
rendered (the “Judgment Currency”), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the
day on which final unappealable judgment is entered, unless such day is not a
New York Banking Day, then the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the New
York Banking Day preceding the day on which final unappealable judgment is
entered and (b) its obligations under this Indenture to make payments in
the Required Currency (i) shall not be discharged or satisfied by any
tender, any recovery pursuant to any judgment (whether or not entered in
accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of
recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable, and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, “New York Banking Day” means any day except a Saturday, Sunday or a
legal holiday in The City of New York on which banking institutions are
authorized or required by law, regulation or executive order to
close.

    

    ARTICLE
XI

    SINKING
FUNDS

    

    Section 11.01 Applicability of
Article. The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of a Series, except as
otherwise permitted or required by any form of Security of such Series issued
pursuant to this Indenture. The minimum amount of any sinking fund payment
provided for by the terms of the Securities of any Series is herein referred to
as a “ mandatory sinking fund
payment ” and any other amount provided for by the terms of Securities of
such Series is herein referred to as an “ optional sinking fund
payment .” If provided for by the terms of Securities of any Series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 11.02. Each sinking fund payment shall be applied to the
redemption of Securities of any Series as provided for by the terms of the
Securities of such Series.

    

    Section 11.02 Satisfaction of
Sinking Fund Payments with Securities. The Company may, in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
any Series to be made pursuant to the terms of such Securities (1) deliver
outstanding Securities of such Series to which such sinking fund payment is
applicable (other than any of such Securities previously called for mandatory
sinking fund redemption) and (2) apply as credit Securities of such Series
to which such sinking fund payment is applicable and which have been repurchased
by the Company or redeemed either at the election of the Company pursuant to the
terms of such Series of Securities (except pursuant to any mandatory sinking
fund) or through the application of permitted optional sinking fund payments or
other optional redemptions pursuant to the terms of such Securities, provided
that such Securities have not been previously so credited. Such Securities shall
be received by the Trustee, together with an Officers’ Certificate with respect
thereto, not later than 15 days prior to the date on which the Trustee begins
the process of selecting Securities for redemption, and shall be credited for
such purpose by the Trustee at the price specified in such Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly. If as a result of the delivery or
credit of Securities in lieu of cash payments pursuant to this
Section 11.02, the principal amount of Securities of such Series to be
redeemed in order to exhaust the aforesaid cash payment shall be less than
$100,000, the Trustee need not call Securities of such Series for redemption,
except upon receipt of a Company Order that such action be taken, and such cash
payment shall be held by the Trustee or a Paying Agent and applied to the next
succeeding sinking fund payment, provided, however, that the Trustee or such
Paying Agent shall from time to time upon receipt of a Company Order pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
Series purchased by the Company having an unpaid principal amount equal to the
cash payment required to be released to the Company.

    
      
         

      

      
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    Section 11.03 Redemption of
Securities for Sinking Fund. Not less than 45 days (unless otherwise
indicated in the Board Resolution, supplemental indenture or Officers’
Certificate in respect of a particular Series of Securities) prior to each
sinking fund payment date for any Series of Securities, the Company will deliver
to the Trustee an Officers’ Certificate specifying the amount of the next
ensuing mandatory sinking fund payment for that Series pursuant to the terms of
that Series, the portion thereof, if any, which is to be satisfied by payment of
cash and the portion thereof, if any, which is to be satisfied by delivering and
crediting of Securities of that Series pursuant to Section 11.02, and the
optional amount, if any, to be added in cash to the next ensuing mandatory
sinking fund payment, and the Company shall thereupon be obligated to pay the
amount therein specified. Not less than 30 days (unless otherwise indicated in
the Board Resolution, Officers’ Certificate or supplemental indenture in respect
of a particular Series of Securities) before each such sinking fund payment date
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.02 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 3.03. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 3.04, 3.05 and 3.06.

    

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

    

    
      
        	
                ACORN
      ENERGY, INC.

              
	 
      
	
                By:

              	
                  

              
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

     

    Attest:

     

    
      
        	
                By:

              	
                  

              
	
                Name:

              
	
                Title:

              

      

    

     

    
      
        	
                ____________________,
      as Trustee

              
	 
      
	
                By:

              	
                  

              
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

    
      
         

      

      
        31Unassociated Document

    NOTE
PURCHASE AGREEMENT

    

    THIS NOTE
PURCHASE AGREEMENT (this “Agreement”), dated as of
August 13, 2009 (“Effective
Date”), is entered into by and between American Petro-Hunter, Inc., a
Nevada corporation (the “Company”), and John E.
Friesen, an individual (the “Purchaser”).

    

    RECITAL

    

    WHEREAS, the Purchaser is
willing to acquire from the Company, and the Company is willing to issue to the
Purchaser, on the terms and subject to the conditions set forth herein, a (i)
Secured Convertible Promissory Note in the aggregate principal amount of
$500,000 (the “Note”) on
the terms and conditions as set forth in the Note in the form attached hereto as
Exhibit A, and
(ii) warrant to purchase 1,428,571 shares of common stock of the Company (the
“Warrant”) on the terms
and conditions set forth in the Warrant in the form attached hereto as Exhibit
D.

    

    NOW, THEREFORE, in
consideration of the foregoing, and the representations, warranties, covenants
and conditions set forth below, the parties hereto, intending to be legally
bound, hereby agree as follows:

    

    AGREEMENT

    

    1.       Issuance and Receipt of the Note and
Warrant. The Company agrees to issue and deliver the Note and Warrant to
the Purchaser upon receipt of funds from the Purchaser.  The issue
date of the Note and Warrant shall be such date the Company first receives such
funds.

     

    

    2.       Representations and Warranties of the
Company.  The Company represents, and warrants to, the
Purchaser as follows:

     

    (a) 
Organization and Good Standing:
Certificate of Incorporation and Bylaws. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its organization and has all requisite corporate power and authority to
carry on its business as now conducted and proposed to be
conducted.  The Company is duly qualified to conduct business as a
foreign corporation and is in good standing as a foreign corporation in all
jurisdictions where the properties owned, leased or operated by it are located
or where its business is conducted, except where the failure to so qualify or be
in good standing is not reasonably likely to have a material adverse effect on
the Company’s business, financial condition, results of operations, assets,
liabilities or prospects (a “Material Adverse
Effect”).

     

    (b) 
Corporate
Power.  The Company has all requisite legal and corporate power
to enter into, execute, deliver and perform its obligations under this
Agreement, the Note and Warrant.  This Agreement is and, upon each of
their issuance, the Note and Warrant will be, valid and binding obligations of
the Company, enforceable in accordance with their terms.

     

    (c) 
Authorization.

     

    (i)         Corporate
Action.  All corporate and legal action on the part of the Company,
its officers, directors and stockholders necessary for the execution and
delivery of this Agreement and the Note, and the performance of the Company’s
obligations hereunder and thereunder, has been taken.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)         No
Preemptive Rights.  No person has any right of first refusal or any
preemptive or similar rights in connection with the issuance of the Note, or the
issuance of common stock of the Company upon conversion of the Note (the “Conversion
Stock”).

     

    (d) 
Noncontravention.  The
execution, delivery and performance of and compliance with this Agreement, the
Note, the issuance of the Conversion Stock will not result in nor constitute any
breach, default or violation of (i) any agreement, contract, lease,
license, instrument or commitment (oral or written) to which the Company is a
party or is bound or (ii) any law, rule, regulation, statute or order applicable
to the Company or its properties, nor result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of the
Company, any of which breach, default or violation under clause (i) or (ii),
preceding, would have a Material Adverse Effect.

     

    (e) 
Consents. No consent,
approval, order or authorization of, or designation, registration, declaration
or filing with, any federal, state, local or provincial or other governmental
authority or other person on the part of the Company is required in connection
with the valid execution and delivery of this Agreement and the Note, or the
offer, or issuance of the Note or the Conversion Stock other than, if required,
filings or qualifications under applicable state securities laws, which filings
or qualifications, if required, will be timely filed or obtained by the
Company.

     

    (f) 
Offering.  In
reliance, in part, on the representations and warranties of the Purchaser in
Section 3 hereof, the offer and issuance of the Note in conformity with the
terms of this Agreement and the issuance of the Conversion Stock will not result
in a violation of the requirements of Section 5 of the Securities Act of 1933,
as amended, (the “Securities
Act”) or the qualification or registration requirements of any applicable
state securities laws.

     

    (g) 
Compliance with
Laws.  The Company is not (i) subject to the terms or
provisions of any material judgment, decree, order, writ or injunction or (ii)
in violation of any terms or provisions of any laws, rules, or regulations,
except where such violations do not and are not likely to have a Material
Adverse Effect.

     

    (h) 
Compliance with Corporate
Instruments and Laws.  The Company is not in violation of any
provisions of its Articles of Incorporation or Bylaws as currently in
effect.  The Company is in compliance in all material respects with
all applicable laws, statutes, rules, and regulations of all governmental and
regulatory authorities which are applicable and the compliance with which is
material to the Company or its assets or business.  All licenses,
franchises, permits and other governmental authorizations held by the Company
and which are material to its business are valid and sufficient in all respects
for the business presently carried on by the Company.

     

    (i)  
Use of
Proceeds.  The Company expects to use the net proceeds received
under this Agreement for general working capital purposes and possibly the
acquisition of assets and companies. The Company has not reserved or allocated
specific amounts for these purposes. Accordingly, the Company’s management will
have broad discretion as to the application of such funds.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (j) 
Public
Filings.

     

    (i)         The
Company has filed all reports required to be filed by Section 13 or 15 (d) of
the Securities Exchange Act of 1934, as amended, during the past twelve months
(the “Company SEC
Reports”). The Company SEC Reports, each as amended prior to the date
hereof, (i) have been prepared in all material respects in accordance with
the requirements of the Securities Act or the under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), as the case
may be, and the rules and regulations promulgated thereunder, and (ii) did
not, when filed as amended prior to the date hereof, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.

     

    (ii)         Each
of the consolidated financial statements (including, in each case, any notes
thereto) contained in or incorporated by reference into the Company SEC Reports
was prepared in accordance with U.S. Generally Accepted Accounting Principles
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto), complied in all material respects with
applicable accounting requirements and the rules and regulations of the
Securities and Exchange Commission (the “SEC”) and each fairly
presented, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company of the dates thereof and for
the respective periods indicated therein except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year end
adjustments).

     

    3.       Representations and Warranties by the
Purchaser. The Purchaser represents, and warrants to, and covenants with,
the Company as follows:

     

    (a) 
Investment. The
Purchaser is acquiring the Note, Warrant and Conversion Stock for the
Purchaser’s own account, and not directly or indirectly for the account of any
other person.  The Purchaser is acquiring the Note and Conversion
Stock for investment and not with a view to distribution or resale thereof
except in compliance with Securities Act of 1933, as amended (the “Securities Act”) and any applicable state
law regulating securities.

     

    (b) 
Registration of Note and
Conversion Stock.  The Purchaser must bear the economic risk of
investment for an indefinite period of time because the Note, Warrant and
Conversion Stock have not been registered under the Securities Act and therefore
cannot and will not be sold unless they are subsequently registered under the
Securities Act or an exemption from such registration is
available.  The Company has made no representations, warranties or
covenants whatsoever as to whether any exemption from the Securities Act,
including, without limitation, any exemption for limited sales in routine
brokers’ transactions pursuant to Rule 144 under the Securities Act will become
available. Transfer of the Note, Warrant and Conversion Stock have not been
registered or qualified under any applicable state law regulating securities and
therefore the Note, Warrant and Conversion Stock cannot and will not be sold
unless they are subsequently registered or qualified under any such act or an
exemption therefrom is available.  The Company has made no
representations, warranties or covenants whatsoever as to whether any exemption
from any such act will become available.

     

    (c) 
Accredited Investor. The
Purchaser represents and warrants to, and covenants with, the Company that: (i)
the Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D
under the Securities Act and the Purchaser is also knowledgeable, sophisticated
and experienced in making, and is qualified to make decisions with respect to
investments in securities presenting an investment decision like that involved
in the purchase of the Note, including investments in securities issued by the
Company and investments in comparable companies, and has requested, received,
reviewed and considered all information it deemed relevant in making an informed
decision to purchase the Note; and (ii) the Purchaser has had the opportunity to
review the risks identified on Annex I, attached
hereto.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (d) 
Access to
Information.  The Purchaser acknowledges that he has had access
to the Company SEC Reports.  The Purchaser further acknowledges that
the Company has made available to him the opportunity to ask questions of and
receive answers from the Company's officers and directors concerning the terms
and conditions of this Agreement and the business and financial condition of the
Company, and the Purchaser has received such information about the business and
financial condition of the Company and the terms and conditions of the Agreement
as he has requested.  The Purchaser understands that the Note, Warrant
and Conversion Stock are speculative investments, which involve a high degree of
risk of loss of the Purchaser’s entire investment.  Among others, the
undersigned has had the opportunity to review of the risks identified under the
caption “Risk Factors” in the Company SEC Reports and Annex I.

     

    (e) 
Foreign
Matters.  The Purchaser acknowledges that no action has been or
will be taken in any jurisdiction outside the United States by the Company that
would permit an offering of the Note, or possession or distribution of offering
materials in connection with the issuance of the Note, in any jurisdiction
outside the United States where legal action by the Company for that purpose is
required.  Each Purchaser outside the United States will comply with
all applicable laws and regulations in each foreign jurisdiction in purchasing
this Note, Warrant and the Conversion Stock.

     

    (f) 
Compliance with
Laws.  Purchaser will not use any of the Conversion Stock to
cover any short position in the Common Stock of the Company if doing so would be
in violation of applicable securities laws.

     

    (g) 
Legal and Tax
Advice.  The Purchaser understands that nothing in the Company
SEC Reports, this Agreement or any other materials presented to the Purchaser in
connection with the purchase of the Note, Warrant and Conversion Stock
constitutes legal, tax or investment advice.  The Purchaser has
consulted such legal, tax and investment advisors, as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of the Note, Warrant and Conversion Stock.

     

    4.       Redemption Right. Upon the
Repayment Date (as defined in the Note), the Company shall have the right to
automatically convert any remaining outstanding principal balance and accrued
interest under the Note into Conversion Stock at the rate of the Conversion
Price (as defined in the Note).

     

    5.       Security
Interest and Collateral Assignment.

     

    (a) 
Security
Interest.  As security interest for the full, prompt, complete,
and final payment when due (whether at stated maturity, by acceleration, or
otherwise) of the amounts owed under the Note, the Company shall grant to the
Purchaser a security interest in all of the Company’s right, title, and interest
in, to, and under all of the Company’s assets on the terms and conditions set
forth in the form of Security Agreement attached hereto as Exhibit
B.

     

    (b) 
Collateral
Assignment.  The Company agrees to pay and assign up to $7,500
of any royalty fees payable to the Company from the Company’s investment in the
Poston Prospect #1 Lutters oil well located in Trego County, Kansas on the terms
and conditions set forth in the form of Collateral Assignment of Royalties
attached hereto as Exhibit C. Each
payment shall be credited first to accrued but unpaid interest and the balance
to principal.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    6.       Indemnification.

     

    (a) 
Company’s Indemnification of
Purchaser.  To the extent permitted by law, the Company shall
defend, indemnify and hold harmless the Purchaser from and against any and all
losses, claims, judgments, liabilities, demands, charges, suits, penalties,
costs or expenses, including court costs and attorneys’ fees resulting from any claim, demand, suit,
action or proceeding brought by any third party (“Claims and Liabilities”) with
respect to or arising from (i) the breach of any warranty or any inaccuracy
of any representation made by the Company in this Agreement, or (ii) the
breach of any covenant or agreement made by the Company in this
Agreement.

     

    (b) 
Purchaser’s Indemnification of
Company.  To the extent permitted by law, the Purchaser shall
defend, indemnify and hold harmless the Company from and against any and all
Claims and Liabilities with respect to or arising from (i) the breach of
any warranty or any inaccuracy of any representation made by the Purchaser in
this Agreement, or (ii) the breach of any covenant or agreement made by the
Purchaser in this Agreement.

     

    (c) 
Claims
Procedure.  Promptly after the receipt by any indemnified party
(the “Indemnitee”) of
notice of the commencement of any action or proceeding against such Indemnitee,
such Indemnitee shall, if a claim with respect thereto is or may be made against
any indemnifying party (the “Indemnifying Party”) pursuant
to this Section 6, give such Indemnifying Party written notice of the
commencement of such action or proceeding and give such Indemnifying Party a
copy of such claim and/or process and all legal pleadings in connection
therewith.  The failure to give such notice shall not relieve any
Indemnifying Party of any of its indemnification obligations contained in this
Section 6, except where, and solely to the extent that, such failure actually
and materially prejudices the rights of such Indemnifying Party.  Such
Indemnifying Party shall have, upon request within thirty (30) days after
receipt of such notice, but not in any event after the settlement or compromise
of such claim, the right to defend, at its own expense and by its own counsel
reasonably acceptable to the Indemnitee, any such matter involving the asserted
liability of the Indemnitee; provided, however, that if the Indemnitee
determines that there is a reasonable probability that a claim may materially
and adversely affect it, other than solely as a result of money payments
required to be reimbursed in full by such Indemnifying Party under this Section
6 or if a conflict of interest exists between Indemnitee and the Indemnifying
Party, the Indemnitee shall have the right to defend, compromise or settle such
claim or suit; and, provided, further, that such settlement or compromise shall
not, unless consented to in writing by such Indemnifying Party, which shall not
be unreasonably withheld, be conclusive as to the liability of such Indemnifying
Party to the Indemnitee.  In any event, the Indemnitee, such
Indemnifying Party and its counsel shall cooperate in the defense against, or
compromise of, any such asserted liability, and in cases where the Indemnifying
Party shall have assumed the defense, the Indemnitee shall have the right to
participate in the defense of such asserted liability at the Indemnitee’s own
expense.  In the event that such Indemnifying Party shall decline to
participate in or assume the defense of such action, prior to paying or settling
any claim against which such Indemnifying Party is, or may be, obligated under
this Section 6 to indemnify an Indemnitee, the Indemnitee shall first supply
such Indemnifying Party with a copy of a final court judgment or decree holding
the Indemnitee liable on such claim or, failing such judgment or decree, the
terms and conditions of the settlement or compromise of such
claim.  An Indemnitee’s failure to supply such final court judgment or
decree or the terms and conditions of a settlement or compromise to such
Indemnifying Party shall not relieve such Indemnifying Party of any of its
indemnification obligations contained in this Section 6, except where, and
solely to the extent that, such failure actually and materially prejudices the
rights of such Indemnifying Party.  If the Indemnifying Party is
defending the claim as set forth above, the Indemnifying Party shall have the
right to settle the claim only with the consent of the
Indemnitee.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (d) 
Exclusive
Remedy.  Each of the parties hereto acknowledges and agrees
that, from and after the Effective Date, its sole and exclusive monetary remedy
with respect to any and all claims relating to the subject matter of this
Agreement shall be pursuant to the indemnification provisions set forth in this
Section 6, except that nothing in this Agreement shall be deemed to constitute a
waiver of any injunctive or other equitable remedies or any tort claims of, or
causes of action arising from, intentionally fraudulent misrepresentation,
willful breach or deceit.

     

    7.       Confidentiality.  The
Purchaser represents to the Company that, at all times during the Company’s
offering of the Note, the Purchaser has maintained in confidence all non-public
information regarding the Company received by the Purchaser from the Company or
its agents, and covenants that it will continue to maintain in confidence such
information and shall not use such information for any purpose other than to
evaluate the purchase of the Note until such information (a) becomes generally
publicly available other than through a violation of this provision by the
Purchaser or his agents or (b) is required to be disclosed in legal proceedings
(such as by deposition, interrogatory, request for documents, subpoena, civil
investigation demand, filing with any governmental authority or similar
process), provided, however, that before making any use or disclosure in
reliance on this subparagraph (b) the Purchaser shall give the Company at least
fifteen (15) days prior written notice (or such shorter period as required by
law) specifying the circumstances giving rise thereto and will furnish only that
portion of the non-public information which is legally required and will
exercise his best efforts to obtain reliable assurance that confidential
treatment will be accorded any non-public information so furnished.

     

    8.       Miscellaneous.

     

    (a) 
Waivers and
Amendments.  Any provision of this Agreement may be amended,
waived or modified upon the written consent of the Company and the
Purchaser.

     

    (b) 
Governing
Law.  This Agreement and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada, without regard to the conflict of laws
provisions of the State of Nevada or of any other state.

     

    (c)  
Entire
Agreement.  This Agreement, together with the Exhibits hereto,
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.

     

    (d) 
Notices.  All
notices, requests and other communications hereunder shall be in writing and
shall be deemed to have been duly given at the time of receipt if delivered by
hand or by facsimile transmission or three (3) days after being mailed,
registered or certified mail, return receipt requested, with postage prepaid to
the applicable parties hereto at the address stated on the signature page hereto
or if any party shall have designated a different address or facsimile number by
notice to the other party given as provided above, then to the last address or
facsimile number so designated.

     

    (e) 
Validity.  If
any provision of this Agreement shall be judicially determined to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions thereof shall not in any way be affected or impaired
thereby.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (f) 
Counterparts.  This
Agreement may be executed in any number of counterparts, and a party’s delivery
of a signed counterpart by facsimile transmission shall constitute that party’s
due execution of this Agreement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the
parties have executed and delivered this Agreement as of the date and year first
written above.

    

    AMERICAN
PETRO-HUNTER, INC.

    

    
      
        	
                By:

              	
                /s/ Robert
  McIntosh

              

      

    

    

    Name:
Robert McIntosh

    Title:
Chief Executive Officer

     

    Address:
17470 North Pacesetter Way

      Scottsdale,
AZ  85255

     

    JOHN
E. FRIESEN

    

    
      
        	
                By:

              	
                /s/ John E.
  Friesen

              

      

    

    

    
      
        	
                Address:

              	 
      
	 
      

      

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    EXHIBIT
A

    FORM OF SECURED CONVERTIBLE
PROMISSORY NOTE

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      Exhibit
A

    

     

    
      THIS NOTE
AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933.  THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHER­WISE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE BORROWER THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH
ACT.

       

      American
Petro-Hunter, Inc.

       

      SECURED
CONVERTIBLE PROMISSORY NOTE

      
        	 	 
	August 13,
      2009	
                $500,000

              
	 	 

      American
Petro-Hunter, Inc., a Nevada corporation (the “Company”), for value received,
promises to pay to the order of John E. Friesen (the “Holder”), the sum of $500,000,
or the aggregate unpaid principal balance of all amounts outstanding hereunder,
whichever is less (the "Principal"), plus simple
interest thereon from the date first set forth above until paid at an annual
interest rate equal to eighteen percent (18%) and in accordance with the
provisions of Section
2 below.  Any remaining principal and interest hereof will be
payable at the principal office of the Company or by mail to the registered
address of the Holder on or before August 13, 2010 (the “Repayment Date”) except that
no payment will be required to the extent that such principal and interest are
or have been paid or converted pursuant to the terms hereof or under the
Agreement.

       

      This Note
is issued by the Company in connection with that certain Note Purchase Agreement
dated as of even date herewith (the “Agreement”).  This
Note incorporates by reference all the terms of the Note Purchase
Agreement.  The following is a statement of the rights of the Holder
and the conditions to which this Note is subject, and to which the Holder, by
the acceptance of this Note, agrees:

       

      1. Definitions.  As
used in this Note, the following terms, unless the context otherwise requires,
have the following meanings:

       

      1.1 “Company” will mean American
Petro-Hunter, Inc. and will include any corporation, partnership, limited
liability company or other entity that will succeed to or assume the obligations
of the Company under this Note.

       

      1.2 “Holder” will mean any person
who will at the time be the registered holder of this Note.

       

      2. Conversion
and Payment of Interest

       

      2.1 Any
monthly royalty fee payable to the Company from the Company’s twenty five (25%)
ownership of working interest in the Poston Prospect #1 Lutters oil well located
in Trego County, Kansas will be payable by mail to the registered address of the
Holder in an amount equal to the lesser of (i) such royalty fee payable to the
Company, or (ii) $7,500. Such payment shall continue until and including the
Repayment Date. Any remaining accrued interest shall be payable in arrears on
the 1st day after the end of each month, commencing August 1, 2009, and
continuing thereafter until and including the Repayment Date, when all accrued
but unpaid interest and the unpaid principal balance shall be paid in full. Each
payment shall be credited first to accrued but unpaid interest and the balance
to principal, and interest shall cease to accrue on the amount of principal so
paid. Interest shall be computed on the basis of a year of 365 days for the
actual number of days elapsed.

       

      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

      2.2 At any
time prior to the Repayment Date, Holder at its option and upon prior written
notice to the Company, may convert in whole or in part, the outstanding
Principal and accrued but unpaid interest thereon (the “Debt”) into shares of common
stock of the Company based on a per share conversion price of the lower of (i)
$0.35, or (ii) a twenty five percent (25%) discount to the average closing
trading price (as reported by Bloomberg) of a share of Company common stock
during the five (5) trading days prior to the conversion date  (the
“Conversion Price”);
provided, however, the number
of shares of Company common stock that may be acquired by Holder upon any
conversion of the Debt shall be limited to the extent necessary to ensure that,
following such exercise, the total number of shares of Company common stock then
beneficially owned by Holder and his affiliates and any other persons whose
beneficial ownership of Company common stock would be aggregated with the
Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed
4.999% of the total number of issued and outstanding shares of Company common
stock (including for such purpose the shares of Company common stock issuable
upon such conversion).  For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations thereunder.  Notwithstanding the foregoing, Holder may
waive such limitation on conversion contained in this Section 2.2 or
increase or decrease such limitation percentage to any other percentage as
specified in a written notice to the Company.

       

      2.3 In the
event of conversion, the Holder will surrender the original copy of this Note
for conversion at the principal office of the Company at the time of such
closing.  Holder agrees to execute all necessary documents in
connection with the conversion of this Note, including a definitive stock
purchase agreement.  If upon such conversion of this Note a fraction
of a share would result, then the Company will round up to the nearest whole
share.

       

      2.4 All
rights with respect to such portion of this Note converted pursuant to Section 2.2 shall
terminate upon issuance of the corresponding shares of common stock to the
Holder.  Notwithstanding the foregoing, Holder agrees to surrender
this Note to the Company for cancellation as to that portion of the Note that
the Holder elects to convert under Section 2.2 as
soon as possible following the conversion of this Note, and the Company shall
execute and deliver a new Note upon the same terms and conditions set forth
herein, dated the date hereof, evidencing the right of the Holder to the balance
of the principal that was not converted (and accrued but unpaid interest
thereon, as applicable).

       

      3. Issuance of Consideration on
Conversion.  As soon as practicable after conversion of this
Note pursuant to Section 2 and receipt
of the original Note and related documents, but in not event later than five (5)
business days, the Company at its expense will cause to be issued in the name of
and delivered to the Holder, a certificate or certificates for the number of
shares of securities to which the Holder will be entitled on such conversion
(bearing such legends as may be required by applicable state and federal
securities laws in the opinion of legal counsel for the Company), together with
any other securities and property, if any, to which the Holder is entitled on
such conversion under the terms of this Note.

       

      4. Adjustment
Provisions.  The number and character of shares of common stock
issuable upon conversion of this Note and the Conversion Price therefor, are
subject to adjustment upon occurrence of the following events:

       

      
        
           

        

        
          A-2

          
            

          

        

        
           

        

      

      4.1 Adjustment for Stock Splits, Stock
Dividends, Recapitalizations, etc.  The Conversion Price of
this Note and the number of shares of common stock issuable upon conversion of
this Note shall each be proportionally adjusted to reflect any stock dividend,
stock split, reverse stock split, reclassification, recapitalization or other
similar event affecting the number of outstanding shares of common
stock.

       

      4.2 Adjustment for Reorganization,
Consolidation, Merger.  In the event (a) of any
reorganization of the Company, (b) the Company consolidates with or merges
into another entity, (c) the Company sells all or substantially all of its
assets to another entity and then distributes the proceeds to its shareholders,
or (d) the Company issues or otherwise sells securities representing more
than 50% of the voting power of the Company in a single or series of related
transactions immediately after giving effect to such transaction or series of
related transaction (each of such events shall be referred to herein as a “Liquidation Event”), then,
and in each such case, the Holder, upon the conversion of this Note at any time
after the consummation of any Liquidation Event shall be entitled to receive, in
lieu of the stock or other securities and property receivable upon the
conversion of this Note prior to such consummation, the stock or other
securities or property to which the Holder would have been entitled upon the
consummation of such Liquidation Event if the Holder had converted this Note
immediately prior thereto, all subject to further adjustment as provided in this
Note, and the successor or purchasing entity in a Liquidation Event (if other
than the Company) shall duly execute and deliver to the Holder a supplement
hereto acknowledging such entity’s obligations under this Note.

       

      4.3           No Change
Necessary.  The form of this Note need not be changed because
of any adjustment in the Conversion Price or in the number of shares of common
stock issuable upon its conversion.

       

      5. Defaults.  Holder
may declare the entire unpaid principal and accrued interest on this Note due
and payable within five (5) business days, by a notice in writing sent by
certified mail to the Company if the Company defaults in the payment of
principal of the Note or accrued interest thereon when due and not cured by the
Company within thirty (30) days.

       

      6. Prepayment.  At any
time prior to the Repayment Date and upon seven (7) days prior written notice,
the Company may prepay, in whole or in part, the Debt in full satisfaction and
accord of the Company’s obligations under this Note.

       

      7. Secured Note.  The
full amount of this Note is secured by the Collateral identified and described
as security therefor in the Security Agreement attached as Exhibit B to the
Agreement.

       

      8. Representations and Acknowledgments
of the Holder.  The Holder hereby represents, warrants,
acknowledges and agrees that:

       

      8.1 Investment.  The
Holder is acquiring this Note and the securities issuable upon conversion of
this Note (together, the “Securities”) for the Holder’s
own account, and not directly or indirectly for the account of any other
person.  The Holder is acquiring the Securities for investment and not
with a view to distribution or resale thereof except in compliance with
Securities Act of 1933 (the “Act”) and any applicable state
law regulating securities.

       

      8.2 Access to
Information.  The Holder has had the opportunity to ask
questions of, and to receive answers from, appropriate executive officers of the
Company with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
condition and results of operations of the Company.  The Holder has
had access to such financial and other information as is necessary in order for
the Holder to make a fully informed decision as to investment in the Company,
and has had the opportunity to obtain any additional information necessary to
verify any of such information to which the Holder has had access.

       

      
        
           

        

        
          A-3

          
            

          

        

        
           

        

      

      8.3 Pre-Existing
Relationship.  The Holder further represents and warrants that
the Holder has such business or financial expertise as to be able to protect the
Holder’s own interests in connection with the purchase of the
Securities.

       

      8.4 Speculative
Investment.  The Holder’s investment in the Company represented
by the Securities is highly speculative in nature and is subject to a high
degree of risk of loss in whole or in part; the amount of such investment is
within the Holder’s risk capital means and is not so great in relation to the
Holder’s total financial resources as would jeopardize the personal financial
needs of the Holder and the Holder’s family in the event such investment were
lost in whole or in part.

       

      8.5 Unregistered
Securities.

       

      (a) The
Holder must bear the economic risk of investment for an indefinite period of
time because the Securities have not been registered under the Act and therefore
cannot and will not be sold unless they are subsequently registered under the
Act or an exemption from such registration is available.  The Company
has made no representations, warranties or covenants whatsoever as to whether
any exemption from the Act, including, without limitation, any exemption for
limited sales in routine brokers’ transactions pursuant to Rule 144 under the
Act will become available.

       

      (b) Transfer
of the Securities has not been registered or qualified under any applicable
state law regulating securities and therefore the Securities cannot and will not
be sold unless they are subsequently registered or qualified under any such act
or an exemption therefrom is available.  The Company has made no
representations, warranties or covenants whatsoever as to whether any exemption
from any such act will become available.

       

      8.6 Accredited
Investor.  The Holder presently qualifies as an “accredited
investor” within the meaning of Regulation D of the rules and regulations
promulgated under the Act.

       

      9. Miscellaneous.

       

      9.1 Waiver and
Amendment.  Any provision of this Note may be amended, waived
or modified only upon the written consent of the Company and the
Holder.

       

      9.2 Restrictions on
Transfer.  This Note may only be transferred in compliance with
applicable state and federal laws.  All rights and obligations of the
Company and the Holder will be binding upon and benefit the successors, assigns,
heirs, and administrators of the parties.

       

      9.3 Company
Representation.  The Company represents to the Holder that the
Company is a corporation duly organized, validly existing, authorized to
exercise all its corporate powers, rights and privileges, and in good standing
in the State of Nevada and has the corporate power and corporate authority to
own and operate its properties and to carry on its business as now conducted;
all corporate action on the part of the Company, its officers, directors, and
shareholders necessary for the authorization, execution, delivery, and
performance of all obligations under this Note have been taken; this Note
constitutes a legally binding and valid obligation of the Company enforceable in
accordance with its terms, except to the extent that such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance or other laws or court decisions relating to
or affecting the rights of creditors generally, and such enforcement may be
limited by equitable principles of general applicability.

       

      
        
           

        

        
          A-4

          
            

          

        

        
           

        

      

      9.4 No
Assignment.  Holder may not transfer or assign all or any part
of this Note except upon prior written notice to the Company and with the
Company’s prior written consent, which consent shall not be unreasonably
withheld; except that Holder may transfer this Note or part thereof either
during his lifetime or on death by will or intestacy to his immediate family or
to a trust, the beneficiaries of which are exclusively Holder and/or a member or
members of his immediate family, or to a family-owned corporation.

       

      9.5 Governing Law.  This
Note will be governed by the laws of the State of Nevada applicable to contracts
between Nevada residents wholly to be performed in Nevada.

       

      
        
           

        

        
          A-5

          
            

          

        

        
           

        

      

       

      IN WITNESS WHEREOF, the Company has
caused this Note to be issued as of the date first above written.

      
        
          	 	 	 
	 	 	 
	 	      
                  American
      Petro-Hunter, Inc.

                  a
      Nevada corporation

                	 
	 	 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Robert
      McIntosh	 
	 	 	      
                  Robert
      McIntosh

                  Chief
      Executive Officer

                	 
	 	 	 	 
	 	 	 	 

        

      

      
        Agreed
and Accepted by the Holder:

      

      

      

      /s/ John
E. Friesen

      John E.
Friesen

       

    

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

      
        Exhibit
B

      

       

    

    EXHIBIT
B

    FORM OF SECURITY
AGREEMENT

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      SECURITY
AGREEMENT

       

      THIS SECURITY AGREEMENT (this “Agreement”) is made
as of August 13, 2009 (“Effective Date”) by and
between ­­­­­­­­­­­­John E.
Friesen (the “Secured
Party”) and American Petro-Hunter, Inc., a Nevada corporation (the “Company”).

       

      RECITAL

       

      A.           Pursuant
to that certain Note Purchase Agreement dated as of the Effective Date (“Purchase Agreement”),
Company and Secured Party entered into a Secured Convertible Promissory Note
dated as of the Effective Date (the “Note”)
evidencing the Company’s obligation to repay the Secured Party certain funds on
the terms and conditions set forth in the Note.

       

      B.           The
parties have agreed that the Company’s obligations under such Note will be
secured by the Company’s grant to the Secured Party of a security interest in
and to certain Collateral (as defined below), pursuant to the terms and
conditions of this Agreement.

       

      NOW,
THEREFORE, in consideration of the foregoing, and the representations,
warranties, covenants and conditions set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:

       

      AGREEMENT

       

      1. SECURITY.

       

      1.1 Grant of Security
Interest.  As security for the prompt and punctual payment and
performance of all Indebtedness (as defined below) of the Company to the Secured
Party when and as due under the Note, the Company hereby grants to the Secured
Party a security interest in the Collateral (as defined below).  For
purposes of this Agreement, “Indebtedness” means
all obligations and liabilities of the Company to the Secured Party under (i)
the Note, and (ii) this Agreement.

       

      1.2 Collateral
Defined.  As used in this Agreement, the term “Collateral” means,
(i) collectively, any and all of the “accounts,” “chattel paper,” “contracts,”
“documents,” “equipment,” “fixtures,” “general intangibles” (including, without
limitation, all intellectual property of the Company), “goods,” “investment
property,” “instruments,” and “inventory” (as such terms are defined in the
Uniform Commercial Code in effect on the Effective Date), and all other assets
and personal property held in the Company’s name, whether now owned by the
Company or hereafter acquired, and all proceeds and products thereof and all
accessions to, substitutions and replacements for, and rents and profits of each
of the foregoing; and (ii) all of the royalty fees payable to the Company from
the Company’s investment in the Poston Prospect #1 Lutters oil well located in
Kansas in an amount not to exceed $7,500 per month; provided that any royalty
fees in excess of $7,500 per month shall be payable to the Company.

       

      1.3 Secured Party
Rights.  Secured Party is hereby authorized to file one of more
UCC-1 Financing Statements with the Secretary of State of the State of Nevada
evidencing and providing notice of the security interest granted pursuant to
this Agreement in the Collateral.

       

      1.4 Release of
Collateral.  Upon the full and final discharge of all of the
Indebtedness, the Secured Party will execute and deliver such documents as may
be reasonably necessary and requested by the Company to release the Collateral
from the security interest granted to the Secured Party in this
Agreement.

       

      1.5 Termination.  When
all the Indebtedness has been paid in full and discharged, this Agreement and
the security interest granted to the Secured Party hereunder will terminate and
a UCC-3 Termination Statement shall be filed by Secured Party to indicate the
termination of the security interest created hereby.

       

      
        
           

        

        
          B-1

          
            

          

        

        
           

        

      

      2. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.  The Company hereby represents and
warrants to the Secured Party that the statements contained in the following
paragraphs of this Section 2 are all true and correct immediately prior to the
execution of the Note.

       

      2.1 Title.  The
Company owns all right, title and interest in and to the
Collateral.

       

      2.2 Right to Grant
Interest.  The Company has the right to grant the security
interest under this Agreement to Secured Party in the Collateral.

       

      2.3 No
Bankruptcy.  Company is not subject to any bankruptcy case or
insolvency proceedings before any court in any jurisdiction.  In the
ninety (90) days preceding the date of this Agreement, the Company has not
received any threat from any third party to subject the Company to any
involuntary bankruptcy or insolvency proceeding.

       

      3. COVENANTS OF THE
COMPANY.  So long as any of the Company Indebtedness to the
Secured Party has not been fully satisfied, the Company covenants and agrees
with the Secured Party that:

       

      3.1 Payment of
Indebtedness.  The Company will pay all Indebtedness when due
under the Note;

       

      3.2 Condition of
Collateral.  The Company will maintain the Collateral in good
condition and repair;

       

      3.3 Further Assurances.
The Company will execute and deliver such documents as Secured Party deems
necessary to create, perfect and continue the security interests granted by this
Agreement;

       

      3.4 Taxes.  The
Company will pay all taxes due and owing by the Company at such time as they
become due.

       

      3.5 No Sale or
Transfer.  The Company will not to sell, offer to sell, or
otherwise transfer the Collateral, except in the ordinary course of
business;

       

      3.6 Books and
Records.  The Company will keep, in accordance with accounting
principles consistently applied, complete and accurate books and records
regarding all Collateral;

       

      3.7 Inspection.  The
Company will permit Secured Party and its designees at all reasonable times to
inspect the Collateral and Debtor’s books and records relating to Collateral,
and to audit and make copies or extracts from such books and
records

       

      4. RIGHTS AND REMEDIES UPON
EVENT OF DEFAULT.

       

      4.1 General
Remedies.  In the event of an occurrence of a default (as that
term is defined in Section 5 of the Note), in addition to exercising any other
rights or remedies the Secured Party may have under the Note, at law or in
equity, or pursuant to the provisions of the Uniform Commercial Code, the
Secured Party may, at its option, and without demand first made, exercise any
one or all of the following rights and remedies: (i) collect the Collateral
and its proceeds; (ii) take possession of the Collateral wherever it may be
found, using all reasonable means to do so, or require the Company to assemble
the Collateral and make it available to the Secured Party at a place designated
by the Secured Party that is reasonably convenient to the Company;
(iii) proceed with the foreclosure of the security interest in the
Collateral granted herein and the sale or endorsement and collection of the
proceeds of the Collateral in any manner permitted by law or provided for
herein; (iv) sell, lease or otherwise dispose of the Collateral at public
or private sale, with or without having the Collateral at the place of sale;
(v) institute a suit or other action against the Company for recovery on
the Note or to obtain possession or effect a sale of the Collateral;
(vi) exercise any rights and remedies of a Company under the Uniform
Commercial Code; and/or (vii) offset, against any payment due from the
Company to the Secured Party, the whole or any part of any Indebtedness of the
Secured Party to the Company.

       

      
        
           

        

        
          B-2

          
            

          

        

        
           

        

      

      4.2 No Election of
Remedies.  The election by the Secured Party of any right or
remedy will not prevent the Secured Party from exercising any other right or
remedy against the Company.

       

      4.3 Proceeds.  If
a default (as defined in Section 5 of the Note) occurs, all proceeds and
payments with respect to the Collateral will be retained by the Secured Party
(or if received by the Company will be held in trust and will be forthwith
delivered by the Company to the Secured Party in the original form received,
endorsed in blank) and held by the Secured Party as part of the Collateral or
applied by the Secured Party to the payment of the Indebtedness.

       

      4.4 Sales of
Collateral.  Any item of Collateral may be sold for cash or
other value at public or private sale or other disposition and the proceeds
thereof collected by or for the Secured Party as provided in the Uniform
Commercial Code or under other applicable law.  The Company agrees to
promptly execute and deliver, or promptly cause to be executed and delivered,
such instruments, documents, assignments, waivers, certificates and affidavits
and supply or cause to be supplied such further information and take such
further action as the Secured Party may reasonably require in connection with
any such sale or disposition.  The Secured Party will have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Company,
which right or equity is hereby waived or released.  If any notice of
a proposed sale, lease, license or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least ten (10) days before such sale, lease, license or other
disposition.  The Secured Party agrees to give the Company ten (10)
days’ prior written notice of any sale, lease, license or other disposition of
Collateral (or any part thereof) by the Secured Party.

       

      4.5 Application of
Proceeds.  The proceeds of all sales and collections in respect
of the Collateral, the application of which is not otherwise specifically herein
provided for, will be applied as follows:  (i) first, to the
payment of the costs and expenses of such sale or sales and collections and the
actual attorneys’ fees and out-of-pocket expenses incurred by the Secured Party
relating to costs of collection; (ii) second, any surplus then remaining
will be applied to the payment of all unpaid principal under the Note; and
(iii) third, any surplus then remaining will be paid to the
Company.

       

      5. GENERAL
PROVISIONS.

       

      5.1 Survival of
Warranties.  The representations, warranties and covenants of
the Company and the Secured Party contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of any of the Secured Party or the Company, as the case may
be.

       

      
        
           

        

        
          B-3

          
            

          

        

        
           

        

      

      5.2 Successors and
Assigns.  The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties.

       

      5.3 Governing
Law.  This Agreement shall be governed by and construed under
the internal laws of the State of Nevada as applied to agreements among Nevada
residents entered into and to be performed entirely within Nevada, without
reference to principles of conflict of laws or choice of laws and, to the extent
applicable, by federal law.

       

      5.4 Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

       

      5.5 Headings.  The
headings and captions used in this Agreement are used only for convenience and
are not to be considered in construing or interpreting this
Agreement.  All references in this Agreement to sections, paragraphs,
exhibits and schedules shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits and schedules attached hereto, all of which
exhibits and schedules are incorporated herein by this reference.

       

      5.6 Notices.  Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given (i) at the time
of personal delivery, if delivery is in person; (ii) one (1) business day
after deposit with an express overnight courier for United States deliveries, or
two (2) business days after such deposit for deliveries outside of the United
States, with proof of delivery from the courier requested; or (iii) three
(3) business days after deposit in the United States mail by certified mail
(return receipt requested) for United States deliveries when addressed to the
party to be notified at the address indicated for such party on the signature
page hereto, or, or at such other address as any party or the Company may
designate by giving ten (10) days’ advance written notice to all other
parties.

       

      5.7 Severability.  If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision(s) were so
excluded and shall be enforceable in accordance with its terms.

       

      5.8 Further
Assurances.  From and after the date of this Agreement, upon
the request of the Secured Party or the Company, the Company and the Secured
Party shall execute and deliver such instruments, documents or other writings as
may be reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.

       

      5.9           Waiver and
Amendment.  Any of the terms and provisions of this Agreement
may be waived at any time by the party that is entitled to the benefit thereof,
but only by a written instrument executed by such party.  This
Agreement may be amended only by an agreement in writing executed by the
parties.

      

      5.10           Delay or
Omission.  No delay or omission to exercise any right, power or
remedy accruing to any party hereto shall impair any such right, power or remedy
of such party nor be construed to be a waiver of any such right, power or remedy
nor constitute any course of dealing or performance hereunder.

      

       

      [SIGNATURE
PAGE IMMEDIATELY FOLLOWS]

       

      
        
           

        

        
          B-4

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the parties have
caused this SECURITY AGREEMENT to be executed and delivered as of the date first
above written.

      

       

      

       

      SECURED
PARTY:

       

      

      /s/ John
E. Friesen

      JOHN E.
FRIESEN

      

      

      

       

      COMPANY:

      

      AMERICAN
PETRO-HUNTER, INC.

      
        	 	 
	 	 
	By: 	
                /s/
      Robert McIntosh

                Robert
      McIntosh

                Chief
      Executive Officer

              
	 	 

      

       

    

    
      
         

      

      
        B-5

        
          

        

      

      
         

      

    

    EXHIBIT
C

    FORM OF COLLATERAL
ASSIGNMENT OF ROYALTIES

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      COLLATERAL
ASSIGNMENT OF ROYALTIES

      

      THIS COLLATERAL ASSIGNMENT OF ROYALTIES
(the “Assignment”) is
made as of August 13, 2009 by American Petro-Hunter, Inc., a Nevada corporation
(“Assignor”), in favor
of John E. Friesen, an individual (“Assignee”).

      

      RECITAL

       

      A.           Pursuant
to that certain Note Purchase Agreement dated as of the Effective Date (“Purchase Agreement”), Assignor
and Assignee entered into a Secured Convertible Promissory Note dated as of the
Effective Date (the “Note”)
evidencing the Assignor’s obligation to repay the Assignee certain funds on the
terms and conditions set forth in the Note.

       

      B.           Assignor
is the owner of a twenty-five percent (25%) working interest in the Poston
Prospect #1 Lutters oil well located in Kansas, as evidenced by that certain
Division Order, recorded in the Register of Deeds for Trego County, State of
Kansas (the “Interest”).

       

      C.           The
parties have agreed that the Assignor’s obligations under such Note will be
secured by the Assignor’s collateral assignment to the Assignee of the Interest,
and to pay Assignor’s royalties from the Interest to Assignee, pursuant to the
terms and conditions of this Agreement.

       

      NOW,
THEREFORE, in consideration of the foregoing, and the representations,
warranties, covenants and conditions set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:

       

      1.           Collateral
Assignment.  Assignor hereby irrevocably grants, sells,
assigns, transfers and sets over to Assignee all of the royalties, issues,
profits, royalties, income and other benefits (collectively, the “Royalties”) derived from the
Interest, together with all of Assignor's right, title and interest in the
Interest, now or hereafter held by Assignor as security for the performance of
the obligations of Assignor under the Note.

      

      2.           Payment
Rights.  Assignor hereby agrees to pay all of the Royalties in
an amount not to exceed $7,500 per month to Assignee, and retain any Royalties
in excess of $7,500 per month.

      

      3.           Termination of
Assignment.  Unless Assignor is in default under the terms of
the Purchase Agreement or Note, this Assignment shall terminate upon the earlier
of August 13, 2010 or the earlier repayment in full of all unpaid interest and
principal under the Note.

      

      4.           Priority of Assignment;
Further Assurances.  Assignor hereby represents and warrants
that the assignment of Royalties hereby granted is a first priority assignment
and that no other assignments of all or any portion of the Royalties or the
Interest exists or remains outstanding.  Assignor agrees to take such
action and to execute, deliver and record such documents as may be reasonably
necessary to evidence such assignment, to establish the priority thereof and to
carry out the intent and purpose hereof.

      

      
        
           

        

        
          C-1

          
            

          

        

        
           

        

      

      5.           Acknowledgment.  The Assignor and
Assignee acknowledge that the only terms and conditions upon which the Royalties
are to be paid are as set forth in this Agreement.  Any dispute with
respect to the Royalties shall be resolved by Assignor and Assignee pursuant to
the terms of the Purchase Agreement.

      

      6.           Successors and
Assigns.  The provisions of this Assignment shall be binding
upon Assignor, its legal representatives, successors or assigns and shall be for
the benefit of Assignee, its successors and assigns.

      

      7.           Notices.  Any
notice under this Agreement shall be in writing, and any written notice or other
document shall be deemed to have been duly given (i) on the date of
personal service on the parties, (ii) on the third business day after
mailing, if the document is mailed by registered or certified mail,
(iii) one day after being sent by professional or overnight courier or
messenger service guaranteeing one-day delivery, with receipt confirmed by the
courier, or (iv) on the date of transmission if sent by telegram, telex,
telecopy or other means of electronic transmission resulting in written copies,
with receipt confirmed.  Any such notice shall be delivered or
addressed to the parties at the addresses set forth below or at the most recent
address specified by the addressee through written notice under this
provision.  Failure to give notice in accordance with any of the
foregoing methods shall not defeat the effectiveness of notice actually received
by the addressee.

      

      8.           Governing
Law.  This Assignment shall be governed by and construed in
accordance with the laws of the State of Nevada.

      

      9.           Counterparts.  This
Assignment may be executed in any number of counterparts each of which shall be
deemed an original and all of which shall constitute one and the same instrument
with the same effect as if all parties had signed the same signature
page.  Any signature page of this Assignment may be detached from any
counterpart of this Assignment and reattached to any other counterpart of this
Assignment identical in form hereto but having attached to it one or more
additional signature pages.

      

      10.           Severability.  If
any term of this Assignment, or the application thereof to any person or
circumstance, shall, to any extent, be invalid or unenforceable, the remainder
of this Assignment, or the application of such term to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each term of this Assignment shall be valid and
enforceable to the fullest extent permitted by law.

      

      11.           Amendments.  This
Assignment may not be amended, modified or changed, nor shall any waiver of any
provision hereof be effective, except only by an instrument in writing and
signed by the party against whom enforcement of any such amendment,
modification, change or waiver is sought.

      

      
        
           

        

        
          C-2

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, Assignor has caused this Assignment to be executed by its
representative thereunto duly authorized as of the date first above
written.

      

      ASSIGNEE:

       

      

      /s/ John
E. Friesen

      JOHN E.
FRIESEN

      

      Address:
____________________________

      ___________________________________

      

      

      

      ASSIGNOR:

      

      AMERICAN
PETRO-HUNTER, INC.

      
        
          	 	 
	 	 
	By: 	
                  /s/
      Robert McIntosh

                  Robert
      McIntosh

                  Chief
      Executive Officer

                
	 	 

        

        
          	 	 
	Address: 	
                  17470
      North Pacesetter Way

                  Scottsdale,
      AZ 85255

                
	 	 

        

      

      

      

    

     

    
      
         

      

      
        C-3

        
          

        

      

      
         

      

    

    EXHIBIT
D

    FORM OF
WARRANT

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      Exhibit
D

    

     

    
      THE
SECURITIES EVIDENCED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE
SOLD, TRANSFERRED, OR ASSIGNED, UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT COVERING SUCH SECURITIES, OR THE SALE IS MADE
IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION
UNDER THE SECURITIES ACT.

      
        	 	 
	August 13,
      2009	
                1,428,571
      Warrants

                Warrant
      Certificate:  20090625

              
	 	 

      

      WARRANT

      TO
PURCHASE COMMON STOCK

      OF

      AMERICAN
PETRO-HUNTER INC.

      (Void
after August 13, 2011)

      

      

      1. Issuance of
Warrant.  FOR
VALUE RECEIVED, on and after the date of issuance of this Warrant, and
subject to the terms and conditions herein set forth, the Holder (as defined
below) is entitled to purchase from American Petro-Hunter Inc., a Nevada
corporation (the “Company”), at any time during
the Exercise Period (as defined below), at a price per share equal to the
Warrant Price (as defined below and subject to adjustment as described below),
the Warrant Stock (as defined below and subject to adjustment as described
below) upon exercise of this warrant (this “Warrant”) pursuant to Section
6 hereof.

       

      2. Definitions.  As
used in this Warrant, the following terms have the definitions ascribed to them
below:

       

      (a) “Commencement Date” means
August 13, 2009.

       

      (b) “Common Stock” means the Common
Stock, $0.001 par value, of the Company.

       

      (c)  “Exercise Period” means the
period commencing on the Commencement Date and ending at 5:00 p.m. Pacific
Standard Time on the Termination Date (as defined below); provided, however, the Exercise
Period shall end and this Warrant shall no longer be exercisable and shall
become null and void (except the right to receive the securities and property to
which the Holder is entitled by virtue of exercising or converting this Warrant
in connection with any Termination Event) upon consummation of any of the
following (each, a “Termination
Event”): (i) the lease of all or substantially all of the assets of the
Company or the exclusive license of all or substantially all of the Company’s
intellectual property to a third party, (ii) the acquisition of the Company by
another entity by means of any transaction or series of related transactions
(including without limitation, any reorganization, merger or consolidation, but
excluding any merger or conversion effected exclusively for the purpose of
changing the domicile of the Company), or (iii) the sale, conveyance or disposal
of all or substantially all of the assets of the Company, unless the Company’s
shareholders of record as constituted immediately prior to such acquisition or
sale will, immediately after such acquisition or sale (by virtue of securities
issued as consideration for the Company’s acquisition or sale or otherwise) hold
at least fifty percent (50%) of the voting power of the surviving or acquiring
entity.  Notwithstanding anything to the contrary herein, this Warrant
shall continue in full force and effect until the Termination Date unless (y) no
less than thirty (30) days prior to any Termination Event, the Company shall
have given the Holder notice of such Termination Event, which notice shall
include a reasonably detailed description of the terms of such Termination
Event, and (z) the Company shall have given the Holder a reasonable opportunity
to exercise or convert this Warrant.

       

      
        
           

        

        
          D-1

          
            

          

        

        
           

        

      

      (d) “Holder” means John E. Friesen
or his assigns.

       

      (e) “Termination Date” means August 13, 2011.

       

      (f) “Warrant Price” means $0.50 per
warrant share.

       

      (g) “Warrant Stock” means the
shares of Common Stock purchasable upon exercise of this Warrant or issuable
upon conversion of this Warrant.  The total number of shares of
Warrant Stock to be issued upon the exercise of this Warrant shall be 1,428,571;
provided, however, such number
shall be subject to adjustment as described in Section 3 hereof.

       

      3. Adjustments and
Notices.  The Warrant Price and the number of shares of Warrant
Stock shall be subject to adjustment from time to time in accordance with this
Section 3.

       

      (a) Subdivision, Stock Dividends
or Combinations.  In case the Company shall at any time
subdivide the outstanding shares of Common Stock or shall issue a stock dividend
with respect to the Common Stock, the Warrant Price in effect immediately prior
to such subdivision or the issuance of such dividend shall be proportionately
decreased, and in case the Company shall at any time combine the outstanding
shares of the Common Stock, the Warrant Price in effect immediately prior to
such combination shall be proportionately increased, in each case effective at
the close of business on the date of such subdivision, dividend or combination,
as the case may be.  When any adjustment is required to be made to the
Warrant Price, the number of shares of Warrant Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of
this Warrant immediately prior to such adjustment, multiplied by the Warrant
Price in effect immediately prior to such adjustment, by (ii) the Warrant
Price in effect immediately after such adjustment.  The provisions of
this Section 3(a) shall similarly apply to successive subdivisions and
combinations.

       

      (b) Reclassification, Exchange,
Substitution, In-Kind Distribution.  Upon any
reclassifications, exchange, substitution or other event that results in a
change of the number and/or class of the securities issuable upon exercise of
this Warrant or upon the payment of a dividend in securities or property other
than shares of Common Stock, the Holder shall be entitled to receive, upon
exercise of this Warrant, the number and kind of securities and property that
Holder would have received if this Warrant had been exercised or converted
immediately before the record date for such reclassification, exchange,
substitution, or other event or immediately prior to the record date for such
dividend.  The Company or its successor shall promptly issue to Holder
a new warrant for such new securities or other property.  The new
warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 3 including,
without limitation, adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise of the new warrant. The provisions
of this Section 3(b) shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events and successive dividends.

       

      (c) Certificate of
Adjustment.  In each case of an adjustment or readjustment of
the Warrant Price, the Company, at its own expense, shall compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate executed by the Company’s Chief Financial Officer showing such
adjustment or readjustment, and shall mail such certificate, by first class
mail, postage prepaid, to the Holder.

       

      (d) No
Impairment.  The Company shall not, by amendment of its
Articles of Incorporation or through a reorganization, transfer of assets,
consolidation, dissolution, issue, or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed under this Warrant by the Company, but shall at all
times in good faith assist in carrying out all of the provisions of this Section
3 and in taking all such action as may be necessary or appropriate to protect
the Holder’s rights under this Section 3 against impairment.

       

      
        
           

        

        
          D-2

          
            

          

        

        
           

        

      

      (e) Fractional
Shares.  No fractional shares shall be issuable upon exercise
or conversion of the Warrant and the number of shares to be issued shall be
rounded to the nearest whole share.  If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying the Holder an amount computed
by multiplying the fractional interest by the fair market value of a full
share.

       

      4. Reservation of
Stock.  On and after the Commencement Date, the Company shall
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Warrant Stock upon the exercise or
conversion of this Warrant.  Issuance of this Warrant shall constitute
full authority to the Company’s officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Warrant Stock issuable upon the exercise or conversion of this
Warrant.

       

      5. Exercise of
Warrant.  This Warrant may be exercised as a whole or part by
the Holder, at any time after the date hereof prior to the termination of this
Warrant, by the surrender of this Warrant, together with the Notice of Exercise
and Investment Representation Statement in the forms attached hereto as Attachments 1 and 2,
respectively, duly completed and delivered to  the principal office of
the Company, specifying the portion of the Warrant to be exercised and
accompanied by payment in full of the Warrant Price in cash or by check with
respect to the shares of Warrant Stock being purchased.  This Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the shares of Warrant Stock issuable upon such
exercise shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date.  As promptly as
practicable after such date, the Company shall issue and deliver to the person
or persons entitled to receive the same a certificate or certificates for the
number of full shares of Warrant Stock issuable upon such
exercise.  If this Warrant shall be exercised for less than the total
number of shares of Warrant Stock then issuable upon exercise, promptly after
surrender of this Warrant upon such exercise, the Company will execute and
deliver a new warrant, dated the date hereof, evidencing the right of the Holder
to the balance of this Warrant Stock purchasable hereunder upon the same terms
and conditions set forth herein.

       

      6. Transfer of
Warrant.  Notwithstanding anything to the contrary herein,
subject to applicable securities laws, this Warrant may be transferred or
assigned in whole or in part by the Holder, and the Company shall permit such
transfer or assignment to an affiliate of the Holder.

       

      7. Termination.  This
Warrant shall terminate at 5:00 p.m. Pacific Standard Time on the Termination
Date, subject to earlier termination as set forth in Section 2(d)
hereof.

       

      8. Miscellaneous.  This
Warrant shall be governed by the laws of the State of Nevada, as such laws are
applied to contracts to be entered into and performed entirely in Nevada. In the
event of any dispute among the Holder and the Company arising out of the terms
of this Warrant, the parties hereby consent to the exclusive jurisdiction of the
federal and state courts located in the State of Nevada for resolution of such
dispute, and agree not to contest such exclusive jurisdiction or seek to
transfer any action relating to such dispute to any other jurisdiction. The
headings in this Warrant are for purposes of convenience and reference only, and
shall not be deemed to constitute a part hereof.  Neither this Warrant
nor any term hereof may be changed or waived orally, but only by an instrument
in writing signed by the Company and the Holder of this Warrant.

       

      
        
           

        

        
          D-3

          
            

          

        

        
           

        

      

       

      AMERICAN
PETRO-HUNTER INC.

       

       

      /s/ Robert
McIntosh                                                                           

      Authorized
Signature

       

      Robert
McIntosh                                                      

      Name

       

      Chief Executive
Officer                                                                           

      Title

       

      
        
           

        

        
          D-4

          
            

          

        

        
           

        

      

       

      ATTACHMENT
1

       

      NOTICE
OF EXERCISE

       

      

       

      TO:           ___________________

       

      1. The
undersigned hereby elects to purchase _______________ shares of the Warrant
Stock pursuant to the terms of the attached Warrant, and tenders herewith
payment of the purchase price in full, together with all applicable transfer
taxes, if any.

       

      2. Please
issue a certificate or certificates representing said shares of Warrant Stock in
the name of the undersigned or in such other name as is specified
below:

       

      

      

      _____________________________________

      (Name)

      

      _____________________________________

      (Address)

      
        	 	 
	_____________________________________
      
                (Date) 

              	
                ___________________________________

                (Name
      of Warrant Holder)

              
	 	 
	 	
                ___________________________________

                (Signature)

                 

                _______________________________­­­____

                (Title)

              
	 	 

      

       

      
        
           

        

        
          D-5

          
            

          

        

        
           

        

      

      ATTACHMENT
2

      

      INVESTMENT
REPRESENTATION STATEMENT

      

      

      Shares of
Common Stock of American Petro-Hunter, Inc., a Nevada corporation (the
“Company”)

      

      In connection with the purchase of the
above-listed securities, the undersigned hereby represents to the Company as
follows:

       

      (a) The
securities to be received upon the exercise of the Warrant (the “Securities”)
will be acquired for investment for its own account, not as a nominee or agent,
and not with a view to the sale or distribution, within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”) of any part thereof,
and the undersigned has no present intention of selling, granting participation
in or otherwise distributing the same, other than to its affiliates, but
subject, nevertheless, to any requirement of law that the disposition of its
property shall at all times be within its control.  By executing this
statement, the undersigned further represents that it does not, other than in
connection with transfers to its affiliates, have any contract, undertaking,
agreement or arrangement with any person to sell, transfer, or grant
participations to such person or to any third person, with respect to any
Securities issuable upon exercise of the Warrant.

       

      (b) The
undersigned understands that the Securities issuable upon exercise of the
Warrant at the time of issuance may not be registered under the Securities Act
and applicable state securities laws, on the ground that the issuance of such
securities is exempt pursuant to Section 4(2) of the Securities Act and state
law exemptions relating to offers and sales not by means of a public offering,
and that the Company’s reliance on such exemptions is predicated on the
undersigned’s representations set forth herein.

       

      (c) The
undersigned agrees that in no event will it make a disposition of any Securities
acquired upon the exercise of the Warrant unless and until the undersigned
provides, at the Company’s request, an opinion of counsel reasonably
satisfactory to the Company that such transfer does not require registration
under the Securities Act and the securities laws applicable with respect to any
other applicable jurisdiction. Notwithstanding the foregoing, no opinion of
counsel shall be necessary and such transfer or assignment by the undersigned
shall be permitted (a) if such transfer or assignment is to an affiliate of the
undersigned or (b) if the Company becomes the subject of foreign ownership,
control or influence and such transfer or assignment is to a charitable
organization.

       

      (d) The
undersigned acknowledges that an investment in the Company is highly speculative
and represents that it is able to fend for itself in the transactions
contemplated by this statement, has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of its
investments, and has the ability to bear the economic risks (including the risk
of a total loss) of its investment.  The undersigned represents that
it has had the opportunity to ask questions of the Company concerning the
Company’s business and assets and to obtain any additional information which it
considered necessary to verify the accuracy of or to amplify the Company’s
disclosures, and has had all questions which have been asked by it
satisfactorily answered by the Company

       

      
        
           

        

        
          D-6

          
            

          

        

        
           

        

      

      (e) The
undersigned acknowledges that the Securities issuable upon exercise or
conversion of the Warrant must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available.  The undersigned is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than six months after a party has
purchased and paid for the security to be sold from the Company or any affiliate
of the Company, the sale being through a “broker’s transaction” or in
transactions directly with a “market maker” (as provided by Rule 144(f)) and the
number of shares being sold during any three month period not exceeding
specified limitations.

       

      
        	 	 
	      
                Dated:________________________

              	
                 

              
	 	
                _______________________________________

                (Typed
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        D-7

        
          

        

      

      
         

      

    

    ANNEX
I

    RISK
FACTORS

     

    The risks
described below are the ones the Company believes are the most important for the
Purchaser to consider, although these risks are not the only ones that the
Company faces. If events anticipated by any of the following risks actually
occur, the Company’s business, operating results or financial condition could
suffer and the trading price of the Company’s common stock could
decline.  As used below, “we,” “us” and “our” refer to American
Petro-Hunter Inc., which is also sometimes referred to as the
“Company.”

     

    Risks
Relating to Our Business

     

    The
duration or severity of the current global economic downturn and disruptions in
the financial markets, and their impact on our company, are
uncertain.

    

    The oil
and gas industry generally is highly cyclical, with prices subject to worldwide
market forces of supply and demand and other influences. The recent global
economic downturn, coupled with the global financial and credit market
disruptions, have had a historic negative impact on the oil and gas industry.
These events have contributed to an unprecedented decline in crude oil and
natural gas prices, weak end markets, a sharp drop in demand, increased global
inventories, and higher costs of borrowing and/or diminished credit
availability. While we believe that the long-term prospects for oil and gas
remain bright, we are unable to predict the duration or severity of the current
global economic and financial crisis. There can be no assurance that any actions
we may take in response to further deterioration in economic and financial
conditions, will be sufficient. A protracted continuation or worsening of the
global economic downturn or disruptions in the financial markets could have a
material adverse effect on our business, financial condition or results of
operations.

    

    We
have a history of losses which may continue, which may negatively impact our
ability to achieve our business objectives.

    

    We have
incurred net losses and other comprehensive losses of $3,681,022 for the period
from January 24, 1996 (inception) to March 31, 2009. We cannot be assured that
we can achieve or sustain profitability on a quarterly or annual basis in the
future. Our operations are subject to the risks and competition inherent in the
establishment of a business enterprise. There can be no assurance that future
operations will be profitable. We may not achieve our business objectives and
the failure to achieve such goals would have an adverse impact on
us.

    

    If
we are unable to obtain additional funding our business operations will be
harmed and if we do obtain additional financing our then existing shareholders
may suffer substantial dilution.

    

    We will
require additional funds to initiate our oil and gas exploration activities, and
to take advantage of any available business opportunities. Historically, we have
financed our expenditures primarily with proceeds from the sale of debt and
equity securities, and bridge loans from our officers and stockholders. In order
to meet our obligations or acquire an operating business, we will have to raise
additional funds. Obtaining additional financing will be subject to market
conditions, industry trends, investor sentiment and investor acceptance of our
business plan and management. These factors may make the timing, amount, terms
and conditions of additional financing unattractive or unavailable to us. If we
are not successful in achieving financing in the amount necessary to further our
operations, implementation of our business plan may fail or be
delayed.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern, which may hinder our ability to obtain future
financing
..

    In their
report dated April 15, 2009, our independent auditors stated that our financial
statements for the fiscal year ended December 31, 2008 were prepared assuming
that we would continue as a going concern. Our ability to continue as a going
concern is an issue raised as a result of recurring losses from operations. We
continue to experience net operating losses. Our ability to continue as a going
concern is subject to our ability to obtain necessary funding from outside
sources, including obtaining additional funding from the sale of our securities.
Our continued net operating losses increase the difficulty in meeting such goals
and there can be no assurances that such methods will prove
successful.

    

    We
have a limited operating history and if we are not successful in growing our
business, then we may have to scale back or even cease our ongoing business
operations
..

    

    We have
yet to generate positive earnings from our current business strategy and there
can be no assurance that we will ever operate profitably. Our company has a
limited operating history in the business of oil and gas exploration and must be
considered in the development stage. Our success is significantly dependent on a
successful acquisition and exploration activities. Our operations will be
subject to all the risks inherent in the establishment of a developing
enterprise and the uncertainties arising from the absence of a significant
operating history. We may be unable to locate recoverable reserves or operate on
a profitable basis. We are in the development stage and potential investors
should be aware of the difficulties normally encountered by enterprises in the
development stage. If our business plan is not successful, and we are not able
to operate profitably, investors may lose some or all of their investment in our
company.

    

    Our
compliance with the Sarbanes-Oxley Act and SEC rules concerning internal
controls may be time-consuming, difficult and costly for us.

    

    It may be
time consuming, difficult and costly for us to maintain, improve and implement
our internal controls and reporting procedures policy as required by the
Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal
controls and other finance staff in order to further develop and implement
appropriate internal controls and reporting procedures as we grow our business.
If we are unable to comply with the internal controls requirements of the
Sarbanes-Oxley Act, we may not be able to obtain the independent accountant
certifications that the Sarbanes-Oxley Act requires publicly-traded companies to
obtain, and this would impact our ability to comply with SEC regulations
governing public companies.

    

    Risks
Related to our Oil and Gas Exploration

    

    If
we are unable to successfully recruit qualified managerial and field personnel
having experience in oil and gas exploration, we may not be able to execute on
our business plan.

    

    In order
to successfully implement and manage our business plan, we will be dependent
upon, among other things, successfully recruiting qualified managerial and field
personnel having experience in the oil and gas exploration business. Competition
for qualified individuals is intense. There can be no assurance that we will be
able to find, attract and retain existing employees or that we will be able to
find, attract and retain qualified personnel on acceptable terms.

    

    Even
if we are able to discover and produce oil or natural gas, the potential
profitability of oil and gas ventures depends upon factors beyond the control of
our company.

    

    The
potential profitability of oil and gas properties is dependent upon many factors
beyond our control. For instance, world prices and markets for oil and gas are
unpredictable, highly volatile, potentially subject to governmental fixing,
pegging, controls or any combination of these and other factors, and respond to
changes in domestic, international, political, social and economic environments.
Additionally, due to worldwide economic uncertainty, the availability and cost
of funds for production and other expenses have become increasingly difficult,
if not impossible, to project. These changes and events may materially affect
our future financial performance. These factors cannot be accurately predicted
and the combination of these factors may result in our company not receiving an
adequate return on invested capital.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    Inherent
risk in drilling

    

    Drilling
for oil and gas involves numerous risks, including the risk that we will not
encounter commercially productive oil and gas reservoirs. The wells we drill or
participate in may not be productive and we may not recover all or any portion
of our investment in those wells. The seismic data and other technologies we use
do not allow us to know conclusively prior to drilling a well that crude or
natural gas is present or may be produced economically. The costs of drilling,
completing and operating wells are often uncertain, and drilling operations may
be curtailed, delayed or canceled as a result of a variety of factors including,
but not limited to:

     

    
      	
               
      

            	
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              unexpected
      drilling conditions;

            

    

    

    
      	
               
      

            	
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              pressure
      or irregularities in formations;

            

    

    

    
      	
               
      

            	
              •

            	
              equipment
      failures or accidents;

            

    

    

    
      	
               
      

            	
              •

            	
              mechanical
      difficulties, such as lost or stuck oil field drilling and service
      tools;

            

    

    

    
      	
               
      

            	
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              fires,
      explosions, blowouts and surface
cratering;

            

    

    

    
      	
               
      

            	
              •

            	
              uncontrollable
      flows of oil and formation water;

            

    

    

    
      	
               
      

            	
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              environmental
      hazards, such as oil spills, pipeline ruptures and discharges of toxic
      gases;

            

    

    

    
      	
               
      

            	
              •

            	
              other
      adverse weather
conditions; and

            

    

    

    
      	
               
      

            	
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              increase
      in the cost of, or shortages or delays in the availability of, drilling
      rigs and equipment.

            

    

     

    Certain
future drilling activities may not be successful and, if unsuccessful, this
failure could have an adverse effect on our future results of operations and
financial condition. While all drilling, whether developmental or exploratory,
involves these risks, exploratory drilling involves greater risks of dry holes
or failure to find commercial quantities of hydrocarbons.

    

    Our
oil and gas operations involve substantial costs and are subject to various
economic risks.

    

    Our oil
and gas operations are subject to the economic risks typically associated with
exploration, development and production activities, including the necessity of
significant expenditures to locate and acquire producing properties and to drill
exploratory wells. The cost and length of time necessary to produce any reserves
may be such that it will not be economically viable. In conducting exploration
and development activities, the presence of unanticipated pressure or
irregularities in formations, miscalculations or accidents may cause our
exploration, development and production activities to be unsuccessful. In
addition, the cost and timing of drilling, completing and operating wells is
often uncertain. We also face the risk that the oil and gas reserves may be less
than anticipated, that we will not have sufficient funds to successfully drill
on the property, that we will not be able to market the oil and gas due to a
lack of a market and that fluctuations in the prices of oil will make
development of those leases uneconomical. This could result in a total loss of
our investment.

    

    A
substantial or extended decline in oil and gas prices may adversely affect our
business, financial condition, cash flow, liquidity or results of operations as
well as our ability to meet our capital expenditure obligations and financial
commitments to implement our business plan.

    

     Any
revenues, cash flow, profitability and future rate of growth we achieve will be
greatly dependent upon prevailing prices for oil and gas. Our ability to
maintain or increase our borrowing capacity and to obtain additional capital on
attractive terms is also expected to be dependent on oil and gas prices.
Historically, oil and gas prices and markets have been volatile and are likely
to continue to be volatile in the future. Prices for oil and gas are subject to
potentially wide fluctuations in response to relatively minor changes in supply
of and demand for oil and gas, market uncertainty, and a variety of additional
factors beyond our control. Those factors include:

    
      
         

      

      
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              the
      domestic and foreign supply of oil and natural
  gas;

            

    

    

    
      	
               
      

            	
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              the
      ability of members of the Organization of Petroleum Exporting Countries
      and other producing countries to agree upon and maintain oil prices and
      production levels;

            

    

    

    
      	
               
      

            	
              •

            	
              political
      instability, armed conflict or terrorist attacks, whether or not in oil or
      natural gas producing regions;

            

    

    

    
      	
               
      

            	
              •

            	
              the
      level of consumer product demand;

            

    

    

    
      	
               
      

            	
              •

            	
              the
      growth of consumer product demand in emerging markets, such as China and
      India;

            

    

    

    
      	
               
      

            	
              •

            	
              weather
      conditions, including hurricanes and other natural occurrences that affect
      the supply and/or demand of oil and natural
gas;

            

    

    

    
      	
               
      

            	
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              domestic
      and foreign governmental regulations and other
  actions;

            

    

    

    
      	
               
      

            	
              •

            	
              the
      price and availability of alternative
fuels;

            

    

    

    
      	
               
      

            	
              •

            	
              the
      price of foreign imports;

            

    

    

    
      	
               
      

            	
              •

            	
              the
      availability of liquid natural gas imports;
and

            

    

    

    
      	
               
      

            	
              •

            	
              worldwide
      economic conditions.

            

    

     

    These
external factors and the volatile nature of the energy markets make it difficult
to estimate future prices of oil and natural gas. Lower oil and natural gas
prices may not only decrease our revenues on a per unit basis, but may also
reduce the amount of oil we can produce economically, if any. A substantial or
extended decline in oil and natural gas prices may materially affect our future
business, financial condition, results of operations, liquidity and borrowing
capacity. While our revenues may increase if prevailing oil and gas prices
increase significantly, exploration and production costs and acquisition costs
for additional properties and reserves may also increase.

    

    Competition
in the oil and gas industry is highly competitive and there is no assurance that
we will be successful in acquiring viable leases.

    

    The oil
and gas industry is intensely competitive. We compete with numerous individuals
and companies, including many major oil and gas companies which have
substantially greater technical, financial and operational resources and staffs.
Accordingly, there is a high degree of competition for desirable oil and gas
leases, suitable properties for drilling operations and necessary drilling
equipment, as well as for access to funds. We cannot predict if the necessary
funds can be raised or that any projected work will be completed.

    

    Oil
and gas operations are subject to comprehensive regulation which may cause
substantial delays or require capital outlays in excess of those anticipated
causing an adverse effect on our company .

    

    Oil and
gas operations are subject to country-specific federal, state, and local laws
relating to the protection of the environment, including laws regulating removal
of natural resources from the ground and the discharge of materials into the
environment. Oil and gas operations are also subject to country-specific
federal, state, and local laws and regulations which seek to maintain health and
safety standards by regulating the design and use of drilling methods and
equipment. Various permits from government bodies are required for drilling
operations to be conducted and no assurance can be given that such permits will
be received. Environmental standards imposed by federal, state, provincial, or
local authorities may be changed and any such changes may have material adverse
effects on our activities. Moreover, compliance with such laws may cause
substantial delays or require capital outlays in excess of those anticipated,
thus causing an adverse effect on us. Additionally, we may be subject to
liability for pollution or other environmental damages. To date, we have not
been required to spend any material amount on compliance with environmental
regulations. However, we may be required to do so in the future and this may
affect our ability to expand or maintain our operations.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    The
unavailability or high cost of drilling rigs, equipment, supplies, personnel and
oil field services could adversely affect our ability to execute our exploration
and development plans on a timely basis and within our budget.

    

    Our
industry is cyclical and, from time to time, there is a shortage of drilling
rigs, equipment, supplies or qualified personnel. During these periods, the
costs and delivery times of rigs, equipment and supplies are substantially
greater. In addition, the demand for, and wage rates of, qualified drilling rig
crews rise as the number of active rigs in service increases. As a result of
increasing levels of exploration and production in response to strong prices of
oil and natural gas, the demand for oilfield services and equipment has risen,
and the costs of these services and equipment are increasing. If the
unavailability or high cost of drilling rigs, equipment, supplies or qualified
personnel were particularly severe in Wyoming, we could be materially and
adversely affected because our operations and properties are concentrated in
Wyoming.

     

    We
depend on the skill, ability and decisions of third party operators to a
significant extent.

    

    The
success of the drilling, development and production of the oil properties in
which we have or expect to have a working interest is substantially dependent
upon the decisions of such third-party operators and their diligence to comply
with various laws, rules and regulations affecting such properties. The failure
of any third-party operator to make decisions, perform their services, discharge
their obligations, deal with regulatory agencies, and comply with laws, rules
and regulations, including environmental laws and regulations in a proper manner
with respect to properties in which we have an interest could result in material
adverse consequences to our interest in such properties, including substantial
penalties and compliance costs. Such adverse consequences could result in
substantial liabilities to us or reduce the value of our properties, which could
negatively affect our results of operations.

    

    Exploration
and production activities are subject to certain environmental regulations which
may prevent or delay the commencement or continuation of our
operations.

    

    In
general, our future exploration and production activities are subject to certain
country-specific federal, state and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuation of a given operation. Compliance with these laws and regulations
has not had a material effect on our operations or financial condition to date.
Specifically, we will be subject to legislation regarding emissions into the
environment, water discharges and storage and disposition of hazardous wastes.
In addition, legislation has been enacted which requires well and facility sites
to be abandoned and reclaimed to the satisfaction of U.S. state authorities.
However, such laws and regulations are frequently changed and we are unable to
predict the ultimate cost of compliance. Generally, environmental requirements
do not appear to affect us any differently or to any greater or lesser extent
than other companies in the industry. We believe that our current operations
comply, in all material respects, with all applicable environmental
regulations.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Risks
Related to our Common Stock

    

    Our common stock may be subject to
the penny stock rules which may make it more difficult to sell our common
stock.

    The
Securities and Exchange Commission has adopted regulations which generally
define a “penny stock” to be any equity security that has a market price, as
defined, less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities may be covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors such as, institutions with assets in excess of $5,000,000
or an individual with net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 jointly with his or her spouse. For transactions
covered by this rule, the broker-dealers must make a special suitability
determination for the purchase and receive the purchaser’s written agreement of
the transaction prior to the sale. Consequently, the rule may affect the ability
of broker-dealers to sell our securities and also affect the ability of our
stockholders to sell their shares in the secondary market.

    

    Our
management and stockholders may lose control of the Company as a result of a
merger or acquisition.

    

    We may
consider an acquisition in which we would issue as consideration for the
business opportunity to be acquired an amount of our authorized but unissued
common stock that would, upon issuance, represent the great majority of the
voting power and equity of the Company. As a result, the acquiring company's
stockholders and management would control the Company, and our current
management may be replaced by persons unknown at this time. Such a merger would
result in a greatly reduced percentage of ownership of the Company by its
current stockholders.

    

    We
have historically not paid dividends and do not intend to pay
dividends.

    

    We have
historically not paid dividends to our stockholders and management does not
anticipate paying any cash dividends on our common stock to our stockholders for
the foreseeable future. We intend to retain future earnings, if any, for use in
the operation and expansion of our business.

    

    A
limited public trading market exists for our common stock, which makes it more
difficult for our stockholders to sell their common stock in the public
markets.

    Although
our common stock is quoted on the OTCBB under the symbol “AAPH,” there is a
limited public market for our common stock. No assurance can be given that an
active market will develop or that a stockholder will ever be able to liquidate
its shares of common stock without considerable delay, if at all. Many brokerage
firms may not be willing to effect transactions in the securities. Even if a
purchaser finds a broker willing to effect a transaction in these securities,
the combination of brokerage commissions, state transfer taxes, if any, and any
other selling costs may exceed the selling price. Furthermore, our stock price
may be impacted by factors that are unrelated or disproportionate to our
operating performance. These market fluctuations, as well as general economic,
political and market conditions, such as recessions, interest rates or
international currency fluctuations may adversely affect the market price and
liquidity of our common stock.

    
      
         

      

      
        14

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