Document:

exv4w2

Exhibit 4.2

PETROQUEST ENERGY, INC.

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

Trustee

 

INDENTURE

Dated as of August 19, 2010

 

SENIOR DEBT SECURITIES

 

 

PetroQuest Energy, Inc.

Reconciliation and tie between Trust Indenture Act of 1939

and Indenture dated as of August 19, 2010

	 	 	 	 	 	 	 
	Section of Trust	 	Section(s) of	 
	Indenture Act of 1939	 	of Indenture	 
	§ 310
	 	(a)(1)	 	 	609	 
	 
	 	(a)(2)	 	 	609	 
	 
	 	(a)(3)	 	Not Applicable
	 
	 	(a)(4)	 	Not Applicable
	 
	 	(b)	 	 	608, 610	 
	§ 311
	 	(a)	 	 	613	 
	 
	 	(b)	 	 	613	 
	 
	 	(c)	 	Not Applicable
	§ 312
	 	(a)	 	 	701, 702	 
	 
	 	(b)	 	 	702	 
	 
	 	(c)	 	 	702	 
	§ 313
	 	(a)	 	 	703	 
	 
	 	(b)	 	 	703	 
	 
	 	(c)	 	 	703	 
	 
	 	(d)	 	 	703	 
	§ 314
	 	(a)	 	 	704, 105	 
	 
	 	(b)	 	Not Applicable
	 
	 	(c)(1)	 	 	102	 
	 
	 	(c)(2)	 	 	102	 
	 
	 	(c)(3)	 	Not Applicable
	 
	 	(d)	 	Not Applicable
	 
	 	(e)	 	 	102	 
	§ 315
	 	(a)	 	 	601	 
	 
	 	(b)	 	 	602	 
	 
	 	(c)	 	 	601	 
	 
	 	(d)	 	 	601	 
	 
	 	(d)(1)	 	 	603	 
	 
	 	(d)(2)	 	 	603	 
	 
	 	(d)(3)	 	 	601	 
	 
	 	(e)	 	 	514	 
	§ 316
	 	(a)(1)(A)	 	 	512	 
	 
	 	(a)(1)(B)	 	 	513	 
	 
	 	(a)(2)	 	Not Applicable
	 
	 	(a)(last sentence)	 	 	101	 
	 
	 	(b)	 	 	508	 
	§ 317
	 	(a)(1)	 	 	503	 
	 
	 	(a)(2)	 	 	504	 
	 
	 	(b)	 	 	1003	 
	§ 318
	 	(a)	 	 	107	 

 

			
	 	 	Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the
Indenture.

1

 

TRUST INDENTURE

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	ARTICLE ONE DEFINITIONS
	 	 	1	 
	Section 101. Definitions
	 	 	1	 
	Section 102. Compliance Certificates and Opinions
	 	 	7	 
	Section 103. Form of Documents Delivered to Trustee
	 	 	8	 
	Section 104. Acts of Holders; Record Dates
	 	 	8	 
	Section 105. Notices, Etc., to Trustee and Company
	 	 	10	 
	Section 106. Notice to Holders; Waiver
	 	 	10	 
	Section 107. Conflict with Trust Indenture Act
	 	 	11	 
	Section 108. Effect of Headings and Table of Contents
	 	 	11	 
	Section 109. Successors and Assigns
	 	 	11	 
	Section 110. Separability Clause
	 	 	11	 
	Section 111. Benefits of Indenture
	 	 	11	 
	Section 112. Governing Law
	 	 	11	 
	Section 113. Legal Holidays
	 	 	12	 
	Section 114. Language of Notices, Etc
	 	 	12	 
	Section 115. Submission to Jurisdiction
	 	 	12	 
	Section 116. Corporate Obligation
	 	 	12	 
	 
	 	 	 	 
	ARTICLE TWO SECURITY FORMS
	 	 	12	 
	Section 201. Forms Generally
	 	 	12	 
	Section 202. Form of Legend for Global Securities
	 	 	13	 
	Section 203. Form of Trustee’s Certificate of Authentication
	 	 	13	 
	Section 204. Securities in Global Form
	 	 	14	 
	 
	 	 	 	 
	ARTICLE THREE THE SECURITIES
	 	 	14	 
	Section 301. Amount Unlimited; Issuable In Series
	 	 	14	 
	Section 302. Denominations
	 	 	18	 
	Section 303. Execution, Authentication, Delivery and Dating
	 	 	18	 
	Section 304. Temporary Securities
	 	 	19	 
	Section 305. Registration, Registration of Transfer and Exchange
	 	 	20	 
	Section 306. Mutilated, Destroyed, Lost and Stolen Securities
	 	 	21	 
	Section 307. Payment of Interest; Interest Rights Preserved
	 	 	22	 
	Section 308. Persons Deemed Owners
	 	 	23	 
	Section 309. Cancellation
	 	 	23	 
	Section 310. Computation of Interest
	 	 	23	 
	Section 311. CUSIP Numbers
	 	 	24	 
	 
	 	 	 	 
	ARTICLE FOUR SATISFACTION AND DISCHARGE
	 	 	24	 
	Section 401. Satisfaction and Discharge of Indenture
	 	 	24	 
	Section 402. Application of Trust Money
	 	 	25	 

i

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE FIVE REMEDIES
	 	 	25	 
	Section 501. Events of Default
	 	 	25	 
	Section 502. Acceleration of Maturity; Rescission and Annulment
	 	 	27	 
	Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee
	 	 	28	 
	Section 504. Trustee May File Proofs of Claim
	 	 	28	 
	Section 505. Trustee May Enforce Claims Without Possession of Securities
	 	 	29	 
	Section 506. Application of Money Collected
	 	 	29	 
	Section 507. Limitation on Suits
	 	 	30	 
	Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest
	 	 	30	 
	Section 509. Restoration of Rights and Remedies
	 	 	30	 
	Section 510. Rights and Remedies Cumulative
	 	 	31	 
	Section 511. Delay or Omission Not Waiver
	 	 	31	 
	Section 512. Control by Holders
	 	 	31	 
	Section 513. Waiver of Past Defaults
	 	 	31	 
	Section 514. Undertaking for Costs
	 	 	32	 
	Section 515. Waiver of Stay or Extension Laws
	 	 	32	 
	 
	 	 	 	 
	ARTICLE SIX THE TRUSTEE
	 	 	32	 
	Section 601. Certain Duties and Responsibilities
	 	 	32	 
	Section 602. Notice of Defaults
	 	 	33	 
	Section 603. Certain Rights of Trustee
	 	 	33	 
	Section 604. Not Responsible for Recitals or Issuance of Securities
	 	 	34	 
	Section 605. May Hold Securities
	 	 	34	 
	Section 606. Money Held in Trust
	 	 	35	 
	Section 607. Compensation and Reimbursement
	 	 	35	 
	Section 608. Conflicting Interests
	 	 	35	 
	Section 609. Corporate Trustee Required; Eligibility
	 	 	35	 
	Section 610. Resignation and Removal; Appointment of Successor
	 	 	36	 
	Section 611. Acceptance of Appointment by Successor
	 	 	37	 
	Section 612. Merger, Conversion, Consolidation or Succession to Business
	 	 	38	 
	Section 613. Preferential Collection of Claims Against Company
	 	 	38	 
	Section 614. Appointment of Authenticating Agent
	 	 	39	 
	 
	 	 	 	 
	ARTICLE SEVEN HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
	 	 	41	 
	Section 701. Company to Furnish Trustee Names and Addresses of Holders
	 	 	41	 
	Section 702. Preservation of Information; Communications to Holders
	 	 	41	 
	Section 703. Reports by Trustee
	 	 	42	 
	Section 704. Reports by Company
	 	 	42	 
	 
	 	 	 	 
	ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	42	 
	Section 801. Company May Consolidate, Etc., Only on Certain Terms
	 	 	42	 
	Section 802. Successor Substituted
	 	 	43	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE NINE SUPPLEMENTAL INDENTURES
	 	 	43	 
	Section 901. Supplemental Indentures Without Consent of Holders
	 	 	43	 
	Section 902. Supplemental Indentures With Consent of Holders
	 	 	44	 
	Section 903. Execution of Supplemental Indentures
	 	 	45	 
	Section 904. Effect of Supplemental Indentures
	 	 	46	 
	Section 905. Conformity with Trust Indenture Act
	 	 	46	 
	Section 906. Reference in Securities to Supplemental Indentures
	 	 	46	 
	 
	 	 	 	 
	ARTICLE TEN COVENANTS
	 	 	46	 
	Section 1001. Payment of Principal, Premium and Interest
	 	 	46	 
	Section 1002. Maintenance of Office or Agency
	 	 	46	 
	Section 1003. Money for Securities Payments to be Held in Trust
	 	 	47	 
	Section 1004. Statement by Officers as to Default
	 	 	48	 
	Section 1005. Existence
	 	 	48	 
	Section 1006. Waiver of Certain Covenants
	 	 	48	 
	Section 1007. Additional Amounts
	 	 	49	 
	 
	 	 	 	 
	ARTICLE ELEVEN REDEMPTION OF SECURITIES
	 	 	49	 
	Section 1101. Applicability of Article
	 	 	49	 
	Section 1102. Election to Redeem; Notice to Trustee
	 	 	49	 
	Section 1103. Selection by Trustee of Securities to be Redeemed
	 	 	50	 
	Section 1104. Notice of Redemption
	 	 	51	 
	Section 1105. Deposit of Redemption Price
	 	 	51	 
	Section 1106. Securities Payable on Redemption Date
	 	 	52	 
	Section 1107. Securities Redeemed in Part
	 	 	52	 
	Section 1108. Purchase of Securities
	 	 	52	 
	 
	 	 	 	 
	ARTICLE TWELVE SINKING FUNDS
	 	 	52	 
	Section 1201. Applicability of Article
	 	 	52	 
	Section 1202. Satisfaction of Sinking Fund Payments with Securities
	 	 	53	 
	Section 1203. Redemption of Securities for Sinking Fund
	 	 	53	 
	 
	 	 	 	 
	ARTICLE THIRTEEN LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	 	 	53	 
	Section 1301. Company’s Option to Effect Legal Defeasance or Covenant Defeasance
	 	 	53	 
	Section 1302. Legal Defeasance and Discharge
	 	 	54	 
	Section 1303. Covenant Defeasance
	 	 	54	 
	Section 1304. Conditions to Legal Defeasance or Covenant Defeasance
	 	 	54	 
	Section 1305. Deposited Money and Government Obligations to be Held in Trust; Other
Miscellaneous Provisions
	 	 	56	 
	Section 1306. Reinstatement
	 	 	56	 
	Section 1307. Deposited Money and Government Obligations to be Held in Trust
	 	 	57	 
	 
	 	 	 	 
	ARTICLE FOURTEEN MEETING OF HOLDERS OF SECURITIES
	 	 	57	 
	Section 1401. Purposes for which Meetings may be Called
	 	 	57	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	Section 1402. Call, Notice and Place of Meetings
	 	 	57	 
	Section 1403. Persons Entitled to Vote at Meetings
	 	 	58	 
	Section 1404. Quorum; Action
	 	 	58	 
	Section 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings
	 	 	59	 
	Section 1406. Counting Votes and Recording Action of Meetings
	 	 	60	 

iv

 

     INDENTURE, dated as of August 19, 2010, between PetroQuest Energy, Inc., a corporation duly
organized and existing under the laws of the State of Delaware (herein called the “Company”),
having its principal office at 400 E. Kaliste Saloom Road, Suite 6000, Lafayette, Louisiana 70508,
and The Bank of New York Mellon Trust Company, N.A., a New York banking corporation as Trustee
(herein called the “Trustee”).

RECITALS OF THE COMPANY

     The Company has duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of its unsecured debentures, notes or other evidences of
indebtedness (herein called the “Securities”), which may be convertible into or exchangeable for
any securities of any Persons (including the Company), to be issued in one or more series as in
this Indenture provided.

     All things necessary to make this Indenture a valid and legally binding agreement of the
Company, in accordance with its terms, have been done.

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities or of series thereof, as follows:

ARTICLE ONE

DEFINITIONS

Section 101. Definitions.

     For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:

     (1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;

     (2) all other terms used herein which are defined in the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to them therein;

     (3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting principles;
the term “generally accepted accounting principles” with respect to any computation required
or permitted hereunder shall mean such accounting principles as are generally accepted as
consistently applied by the Company at the date of such computation;

     (4) unless the context otherwise requires, any reference to an “Article”, a
“Section” or an “Exhibit” refers to an Article, a Section or an Exhibit, as the case may be,
of or to this Indenture; and

1

 

     (5) the words “herein”, “hereof” and “hereunder” and other words of similar
import refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision.

     Certain terms, used principally in Article Six and Article Thirteen, are defined in those
Articles.

     “Act”, when used with respect to any Holder, has the meaning specified in Section 104.

     “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” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     “Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to
act on behalf of the Trustee to authenticate Securities of one or more series.

     “Authorized Newspaper” means a newspaper, in the English language or in an official language
of the country of publication, customarily published on each Business Day, whether or not published
on Saturdays, Sundays or holidays, and of general circulation in each place in connection with
which the term is used or in the financial community of each such place. Where successive
publications are required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the foregoing requirements and
in each case on any Business Day.

     “Board of Directors” means either the board of directors of the Company or any duly authorized
committee of that board.

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

     “Business Day”, when used with respect to any Place of Payment, means each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking institutions in that Place of
Payment are authorized or obligated by law or executive order to close.

     “Commission” means the United States Securities and Exchange Commission, from time to time
constituted, created under the Exchange Act, or, if at any time after the execution of this
instrument the United States Securities and Exchange Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body performing such duties at
such time.

     “Company” means the Person named as the “Company” in the first paragraph of this Indenture
until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Company” shall mean such successor Person.

2

 

     “Company Request” or “Company Order” means a written request or order signed in the name of
the Company by its Chairman of the Board, its Vice Chairman of the Board, its President 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 principal office of the Trustee at which at any particular
time its corporate trust business shall be administered, which as of the date hereof is located at
Corporate Trust, 601 Travis Street, 16th Floor, Houston, Texas 77002, Attention: Kash Asghar.

     “corporation” means a corporation, association, company, joint-stock company or business
trust.

     “covenant defeasance” has the meaning specified in Section 1303.

     “Defaulted Interest” has the meaning specified in Section 307.

     “Depositary” means, with respect to Securities of any series issuable in whole or in part in
the form of one or more Global Securities, a clearing agency registered under the Exchange Act that
is designated to act as Depositary for such Securities as contemplated by Section 301.

     “Event of Default” has the meaning specified in Section 501.

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

     “Expiration Date” has the meaning specified in Section 104.

     “Global Security” means a Security that evidences all or part of the Securities of any series
and bears the legend set forth in Section 202 (or such legend as may be specified as contemplated
by Section 301 for such Securities).

     “Government Obligation” has the meaning specified in Section 1304.

     “Holder” means the Person in whose name the Security is registered in the Security Register.

     “Indenture” means this instrument as originally executed and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of
and govern this instrument and any such supplemental indenture, respectively. The term “Indenture”
shall also include the terms of particular series of Securities established as contemplated by
Section 301.

     “interest”, when used with respect to an Original Issue Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.

3

 

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

     “Investment Company Act” means the United States Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.

     “legal defeasance” has the meaning specified in Section 1302.

     “Maturity”, when used with respect to any Security, means the date on which the principal of
such Security or an 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.

     “Notice of Default” means a written notice of the kind specified in Section 501(4).

     “Officers’ Certificate” means a certificate signed by the Chairman of the Board, a Vice
Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.
One of the officers signing an Officers’ Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.

     “Opinion of Counsel” means a written opinion of counsel, who may be counsel for or an employee
of the Company.

     “Original Issue Discount Security” means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502.

     “Outstanding”, when used with respect to Securities, means, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture, except:

     (1) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;

     (2) Securities for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other than the Company)
in trust or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; provided that, if such Securities
are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture
or provision therefor satisfactory to the Trustee has been made;

     (3) Securities as to which legal defeasance has been effected pursuant to
Section 1302; and

     (4) Securities that have been paid pursuant to Section 1001 or in exchange
for or in lieu of which other Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are held by a bona

4

 

fide purchaser in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount
of the Outstanding Securities have given, made or taken any request, demand, authorization,
direction, notice, consent, waiver, or other action hereunder as of any date or whether a
quorum is present at a meeting of Holders of Securities, (A) the principal amount of an
Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount
of the principal thereof that would be due and payable as of such date upon acceleration of
the Maturity thereof to such date pursuant to Section 502, (B) if, as of such date, the
principal amount payable at the Stated Maturity of a Security is not determinable, the
principal amount of such Security that shall be deemed to be Outstanding shall be the amount
as specified or determined as contemplated by Section 301, (C) the principal amount of a
Security denominated in one or more foreign currencies or currency units which shall be
deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of such Security
(or, in the case of a Security described in clause (A) or (B) above, of the amount
determined as provided in such clause), and (D) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent, waiver, or other action, or upon any such determination as to
the presence of a quorum, only Securities that a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee’s right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.

     “Paying Agent” means any Person, which may include the Company, authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of the Company.

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

     “Place of Payment”, when used with respect to the Securities of any series, means the place or
places specified in accordance with Section 301 where the principal of and any premium and interest
on the Securities of that series are payable.

     “Predecessor Security” of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 306 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Security.

5

 

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

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

     “Regular Record Date” for the interest payable on any Interest Payment Date on the Securities
of any series means the date specified for that purpose as contemplated by Section 301.

     “Responsible Officer”, when used with respect to the Trustee, means any vice president, any
assistant treasurer, any trust officer or assistant trust officer or any other officer of the
Trustee customarily performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his or her knowledge of and familiarity with the particular
subject and who shall have responsibility for the administration of this Indenture.

     “Securities” has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture provided,
however, that if at any time there is more than one Person acting as Trustee under this Indenture,
“Securities” with respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more particularly mean Securities
authenticated and delivered under this Indenture, exclusive, however, of Securities of any series
as to which such Person is not Trustee.

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

     “Security Register” and “Security Registrar” have the respective meanings specified in Section
305.

     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.

     “Stated Maturity”, when used with respect to any Security or any installment of principal
thereof or interest thereon, means 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 a corporation, limited liability company, limited partnership, or other
entity more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by
the Company or by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, “voting stock” means the equity interest that
ordinarily has voting power for the election of directors, managers, trustees or general partners
of an entity, or persons performing similar functions, whether at all times or only so long as no
senior class of equity interest has such voting power by reason of any contingency.

     “Trust Indenture Act” means the United States Trust Indenture Act of 1939 as in force at the
date as of which this instrument was executed; provided, however, that in the event the Trust

6

 

Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.

     “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 or include 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.

     “United States Alien” means any Person who, for United States Federal income tax purposes, is
a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign
estate or trust, or a foreign partnership one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

     “Vice President”, when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
“vice president”.

Section 102. Compliance Certificates and Opinions.

     Upon any application or request by the Company to the Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall
be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or
an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the
Trust Indenture Act and any other requirements set forth in this Indenture.

     Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (except for certificates provided for in Section 1004) shall include,

     (1) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;

     (2) 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;

     (3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has been complied with; and

     (4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.

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Section 103. Form of Documents Delivered to Trustee.

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

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

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

Section 104. Acts of Holders; Record Dates.

     Any request, demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed by such Holders in
person or by agent duly appointed in writing. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the
Holders signing such instrument or instruments, and shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.

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

     The principal amount and serial numbers of Securities held by any Person, and the date of
holding the same, shall be proved by the Security Register.

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     Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company
in reliance thereon, whether or not notation of such action is made upon such Security.

     The Company may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be given, made or taken by Holders of Securities of such series, provided, that the
Company may not set a record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders after such record
date; provided, that no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities
of such series on such record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date has previously been
set pursuant to this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable Expiration Date to be given
to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set
forth in Section 106.

     The Trustee may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of
Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to
institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section
512, in each case with respect to Securities of such series. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities of such series on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request or direction, whether
or not such Holders remain Holders after such record date; provided, that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the
requisite principal amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person be cancelled and of
no effect), and nothing
in this paragraph shall be construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the
Company’s expense, shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the

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Company in writing and to each Holder of Securities
of the relevant series in the manner set forth in Section 106.

     With respect to any record date set pursuant to this Section, the party hereto that sets such
record date may designate any day as the “Expiration Date” and from time to time may change the
Expiration Date to any earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in writing, and to
each Holder of Securities of the relevant series in the manner set forth in Section 106, on or
prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto that set such record date shall be
deemed to have initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as provided in this
paragraph.

     Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with
regard to any particular Security may do so with regard to all or any part of the principal amount
of such Security or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.

Section 105. Notices, Etc., to Trustee and Company.

     Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with,

     (1) the Trustee by any Holder or by the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing (which may be via facsimile)
to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or

     (2) the Company by the Trustee or by any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument, Attention: Chief Financial
Officer, or at any other address previously furnished in writing to the Trustee by the
Company.

Section 106. Notice to Holders; Waiver.

     Except as otherwise expressly provided herein, where this Indenture provides for notice of any
event to Holders of Securities, such notice shall be sufficiently given to Holders of Securities if
in writing and mailed, first-class postage prepaid, to each Holder of a Security affected by such
event, at the address of such Holder as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of
such notice.

     In case by reason of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice to Holders of Securities by mail, then such

10

 

notification as shall be made in a manner directed by the Company or as provided in a supplemental indenture
hereto shall constitute a sufficient notification for every purpose hereunder. In any case where
notice to Holders of Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder of a Security shall affect the sufficiency
of such notice with respect to other Holders.

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

Section 107. Conflict with Trust Indenture Act.

     This Indenture shall incorporate and be governed by the provisions of the Trust Indenture Act
that are required to be part of and to govern indentures qualified under the Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act
that is required under such Act to be a part of and govern this Indenture, the latter provision
shall control. If any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the former provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.

Section 108. Effect of Headings and Table of Contents.

     The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

Section 109. Successors and Assigns.

     All covenants and agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.

Section 110. Separability Clause.

     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 111. Benefits of Indenture.

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

Section 112. Governing Law.

     This Indenture and the Securities shall be governed by and construed in accordance with the
law of the State of New York.

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Section 113. Legal Holidays.

     In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Securities (other than a provision
of any Security which specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity.

Section 114. Language of Notices, Etc.

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

Section 115. Submission to Jurisdiction.

     The Company irrevocably submits to the non-exclusive
jurisdiction of any federal or state court in the City, County and State of New York, United
States, and any appellate court from any thereof, in any legal suit, action or proceeding based on
or arising under the Securities or this Indenture and agrees that all claims in respect of such
suit or proceeding may be determined in any such court. The Company irrevocably waives to the
fullest extent permitted by law, any objection to any such suit, including actions, suits or
proceedings relating to the securities laws of the United States of America or any state thereof,
in such courts whether on the grounds of venue, residence or domicile or the defense of an
inconvenient forum or objections to personal jurisdiction with respect to the maintenance of such
legal suit, action or proceeding. The Company agrees that the final judgment in any such suit,
action or proceeding brought in such court shall be conclusive and binding upon the Company and may
be enforced in any court to the jurisdiction of which the Company is subject by a suit upon such
judgment.

Section 116. Corporate Obligation.

     No recourse may be taken, directly or indirectly, against
any incorporator, subscriber to the capital stock, stockholder, officer, director or employee of
the Company or the Trustee or of any predecessor or successor of the Company or the Trustee with
respect to the Company’s obligations on the Securities or the obligations of the Company or the
Trustee under this Indenture or any certificate or other writing delivered in connection herewith.

ARTICLE TWO

SECURITY FORMS

Section 201. Forms Generally.

     The Securities of each series shall be in substantially the form
of forms as shall be established by or pursuant to a Board Resolution or in one or more indentures
supplemental

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hereto, in each case with such appropriate insertions, omissions, substitutions and
other
variations as are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon as may be required
to comply with the rules of any securities exchange or Depositary therefor or as may, consistently
herewith, be determined by the officers executing such Securities as evidenced by their execution
thereof. If the form of Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of
the Company Order contemplated by Section 303 for the authentication and delivery of such
Securities (or any such temporary global Security).

     The definitive Securities shall be printed, lithographed or engraved on steel engraved borders
or may be produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.

Section 202. Form of Legend for Global Securities.

     Unless otherwise specified as contemplated by
Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:

     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

Section 203. Form of Trustee’s Certificate of Authentication.

     The Trustee’s certificates of
authentication shall be in substantially the following form:

     “This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	The Bank of New York Mellon Trust Company, N.A., As Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

Dated:        
                  
                  
                ”

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Section 204. Securities in Global Form.

     If Securities of or within a series are issuable in
global form, as specified as contemplated by Section 301, then any such Security shall represent
such of the Outstanding Securities of such series as shall be specified therein and may provide
that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed
thereon and that the aggregate amount of Outstanding Securities represented thereby may from time
to time be reduced to reflect exchanges. Any endorsement of a Security in global form to reflect
the amount, or any increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Trustee in such manner and upon instructions given by such Person or
Persons as shall be specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 303 or Section 304. Subject to the provisions of Section 303 and, if
applicable, Section 304, the Trustee shall deliver and redeliver any Security in permanent global
form in the manner and upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or Section 304 has been, or
simultaneously is, delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel.

     The provisions of the last sentence of Section 303 shall apply to any Security represented by
a Security in global form if such Security was never issued and sold by the Company and the Company
delivers to the Trustee the Security in global from together with written instructions (which need
not comply with Section 102 and need not be accompanied by an Opinion of Counsel) with regard to
the reduction in the principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of Section 303.

     Notwithstanding the provisions of Section 307, unless otherwise specified as contemplated by
Section 301, payment of principal of and any premium and interest on any Security in permanent
global form shall be made to the Person or Persons specified therein.

ARTICLE THREE

THE SECURITIES

Section 301. Amount Unlimited; Issuable In Series.

     The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is unlimited.

     The Securities may be issued in one or more series. There shall be established in or pursuant
to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided,
in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to
the issuance of Securities of any series,

     (1) the title of the Securities of the series, including CUSIP numbers, if applicable
(which shall distinguish the Securities of the series from Securities of any other series);

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     (2) 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 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder);

     (3) the Trustees, Authenticating Agents, Paying Agents, Security Registrars or other
agents with respect to the series;

     (4) the Person to whom any interest on any Security of the series shall be payable, if
other than the Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest, the extent
to which, or the manner in which, any interest payable on a temporary global Security on an
Interest Payment Date will be paid if other than in the manner provided in Section 304;

     (5) the date or dates on which the principal of the Securities of the series is
payable;

     (6) the ability to issue additional Securities in the same series;

     (7) the price or prices at which the Securities will be sold;

     (8) the right, if any, to extend the interest payment periods and the duration of any
such deferral period, including the maximum consecutive period during which interest payment
periods may be extended;

     (9) provisions, if any, granting special rights to holders of the Securities upon the
occurrence of specified events;

     (10) the terms, if any, upon which Holders may convert or exchange (or upon which the
Company may require Holders to convert or exchange) the Securities of the series into or for
the common stock, preferred stock or other securities or property of the Company or of
another Person (or upon which the Securities of the series shall automatically convert or be
exchanged into or for such other securities or property);

     (11) the rate or rates at which the Securities of the series shall bear interest, if
any, which may be fixed or variable, or the method by which such rate shall be determined,
the date or dates from which any such interest shall accrue, or the method by which such
date or dates will be determined, the Interest Payment Dates on which any such interest
shall be payable, and the Regular Record Date for the interest payable on any Securities on
any Interest Payment Date;

     (12) in the case of Original Issue Discount Securities, the rate of accretion of
principal, which may be fixed or variable, or the method of determining such rate, and the
date or dates from which principal will accrete or the method by which such date or dates
will be determined;

15

 

     (13) the place or places where, subject to the provisions of Section 1002, the
principal of and any premium, if any, and interest, if any, on Securities of the series
shall be payable, where any Securities of the series may be surrendered for registration of
transfer, where Securities of the series may be surrendered for exchange, where Securities
of the series that are convertible or exchangeable may be surrendered for conversion or
exchange, as applicable, and notices and demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served;

     (14) the period or periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series may be redeemed, in whole or in part at
the option of the Company (including whether the redemption may be made conditional upon
events occurring after the delivery or publication of the notice of redemption) and, if
other than by a Board Resolution, the manner in which any election by the Company to redeem
the Securities shall be evidenced;

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

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

     (17) whether the amount of payments of principal (or premium, if any) or interest, if
any, on the Securities of the series may be determined with reference to an index, formula
or other method (which index, formula or method may be based, without limitation, on one or
more currencies, commodities, equity indices or other indices), and the manner in which such
amounts shall be determined;

     (18) the currency or currencies, including currency units or composite currencies, in
which payment of the principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United States of America and the
manner of determining the equivalent thereof in the currency of the United States of America
for purposes of the definition of “Outstanding” in Section 101;

     (19) if the principal of or any premium or interest on any Securities of the series is
to be payable, at the election of the Company or the Holder thereof, in one or more
currencies or currency units other than that or those in which such Securities are stated to
be payable, the currency, currencies or currency units in which the principal of or any
premium or interest on such Securities as to which such election is made shall be payable,
the periods within which and the terms and conditions upon which such election
is to be made and the amount so payable (or the manner in which such amount shall be
determined);

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     (20) if other than the entire principal amount thereof, the portion of the principal
amount of any Securities of the series which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502;

     (21) the collateral, if any, securing the Securities of the series, and the guarantors,
if any, who will guarantee the Securities of the series, or the methods of determining such
collateral, if any, and such guarantors, if any;

     (22) whether the amount of principal, premium, if any, and interest on the Securities
of the series may be determined by reference to an index, formula or other method, such as
one or more currencies, commodities, equity indices or other indices, and the manner in
which such amounts shall be determined;

     (23) if the principal amount payable at the Stated Maturity of any Securities of the
series will not be determinable as of any one or more dates prior to the Stated Maturity,
the amount which shall be deemed to be the principal amount of such Securities as of any
such date for any purpose thereunder or hereunder, including the principal amount thereof
which shall be due and payable upon any Maturity other than the Stated Maturity or which
shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any
such case, the manner in which such amount deemed to be the principal amount shall be
determined);

     (24) if applicable, that the Securities of the series, in whole or any specified part,
shall be defeasible pursuant to Section 1302 or Section 1303 or both such Sections and, if
other than by a Board Resolution, the manner in which any election by the Company to defease
such Securities shall be evidenced;

     (25) if applicable, that any Securities of the series shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the respective
Depositaries for such Global Securities, the form of any legend or legends which shall be
borne by any such Global Security in addition to or in lieu of that set forth in Section 202
and any circumstances in addition to or in lieu of those set forth in the legend set forth
in Section 202 in which any such Global Security may be exchanged in whole or in part for
Securities registered, and any transfer of such Global Security in whole or in part may be
registered in the name or names of Persons other than the Depositary for such Global
Security or a nominee thereof;

     (26) any addition to or change in the Events of Default which apply 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 502;

     (27) any addition to or change in the covenants set forth in Article Ten which applies
to Securities of the series, including any limitation on the Company’s ability to incur
debt, redeem stock or sell its assets;

     (28) whether, under what circumstances and the currency in which the Company will pay
additional amounts as contemplated by Section 1007 on the Securities

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of the series to any
Holder who is not a United States Person(s) (including any modification to the definition of
such term) in respect of any tax, assessment or governmental charge and, if so, whether the
Company will have the option to redeem such Securities rather than pay such additional
amounts (and the terms of any such option);

     (29) provisions, if any, granting special rights to holders of Securities of the series
upon the occurrence of specified events; and

     (30) any other terms of the series (which terms shall not be inconsistent with the
provisions of this Indenture, except as permitted by Section 901 or 902), including the
stated intervals of time the Trustee shall be required to transmit reports pursuant to
Section 313(a) of the Act.

All Securities of such series shall be substantially identical except as to denomination and except
as may otherwise be provided in or pursuant to the Board Resolution or supplemental indenture
referred to above and (subject to Section 303) set forth, or determined in the manner provided, in
the Officers’ Certificate referred to above or in any such indenture supplemental hereto. If any of
the terms of the series are established by action taken pursuant to a Board Resolution, a copy of
an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary
of the Company and delivered to the Trustee at or prior to the delivery of the Officers’
Certificate setting forth the terms of the series.

Section 302. Denominations

     
Unless otherwise provided as contemplated by Section 301 with
respect to the Securities of any series, any Securities of such series, other than Securities
issued in global form (which may be of any denomination), shall be issuable in denominations of
$1,000 and any integral multiple thereof.

Section 303. Execution, Authentication, Delivery and Dating.

     The Securities shall be executed on
behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President
or one of its Vice Presidents, attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.

     Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.

     At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver
such Securities. If the forms or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in

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authenticating
such Securities, and accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,

     (1) if the forms of such Securities have been established by or pursuant to Board
Resolution as permitted by Section 201, that such forms have been established in conformity
with the provisions of this Indenture;

     (2) if the terms of such Securities have been established by or pursuant to Board
Resolution as permitted by Section 301, that such terms have been established in conformity
with the provisions of this Indenture; and

     (3) that such Securities when authenticated and delivered by the Trustee and issued by
the Company in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or
affecting creditors’ rights and to general principles of equity.

The Trustee shall not be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the
Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.

     Notwithstanding the provisions of Section 301 and of the two preceding paragraphs, if all
Securities of a series are not to be originally issued at one time, it shall not be necessary to
deliver the Officers’ Certificate otherwise required pursuant to Section 301 or the Company Order
and Opinion of Counsel otherwise required pursuant to such preceding paragraphs at or prior to the
authentication of each Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to be issued.

     Each Security shall be dated the date of its authentication.

     No Security shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of authentication substantially
in the form provided for herein executed by the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for
all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled to the benefits
of this Indenture.

Section 304. Temporary Securities.

     Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which

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are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

     If temporary Securities of any series are issued, the Company will cause definitive Securities
of that series to be prepared without unreasonable delay. After the preparation of definitive
Securities of that series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities of such series at
the office or agency of the Company in a Place of Payment for that series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or
more definitive Securities of the same series, of any authorized denominations and like aggregate
principal amount and tenor.

     Until exchanged in full as hereinafter provided, the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as definitive Securities of
the same series and of like tenor authenticated and delivered hereunder.

Section 305. Registration, Registration of Transfer and Exchange.

     The Company shall cause to be
kept at an office or agency to be maintained by the Company in accordance with Section 1002 a
register (being the combined register of the Security Registrar and all transfer agents designated
pursuant to Section 1002 for the purpose of registration of transfer of Securities and sometimes
collectively referred to as the “Security Register”) in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration of Securities and
the registration of transfers of Securities. The Trustee is hereby appointed “Security Registrar”
for the purpose of registering Securities and transfers of Securities as herein provided.

     Except as otherwise provided in Section 203 or as may be provided as contemplated by Section
301, upon surrender for registration of transfer of any Security of a series at the office or
agency of the Company maintained pursuant to Section 1002 for such purpose in a Place of Payment
for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of the same series, of
any authorized denominations and of like tenor and aggregate principal amount.

     At the option of the Holder, Securities of any series may be exchanged for other Securities of
the same series, of any authorized denominations and of like tenor and aggregate principal amount,
upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities that the Holder making the exchange is entitled to receive.

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

     Every Security presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee or any transfer agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar or any transfer agent duly executed, by the Holder thereof or his attorney duly
authorized in writing.

     No service charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

     If the Securities of any series (or of any series and specified tenor) are to be redeemed in
part, the Company shall not be required to issue, register the transfer of or exchange any
Securities of that series (or of that series and specified tenor, as the case may be) during a
period beginning at the opening of business 15 days before any selection of Securities of that
series to be redeemed and ending at the close of business on the day of the mailing of the relevant
notice of redemption.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

     If any mutilated Security is
surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and
deliver 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 bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and deliver, 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.

     Notwithstanding the provisions of the previous two paragraphs, 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.

     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.

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     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 307. Payment of Interest; Interest Rights Preserved.

     Except as otherwise provided as
contemplated by Section 301 with respect to any series of Securities, interest on any Security
which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest.

     Any interest on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:

     (1) The Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on a special record date (a “Special Record Date”) for
the payment of such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each Security of such series and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to
the date of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be given to each Holder of Securities of such series in the manner set forth in
Section 106, not less than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities
of such series (or their respective Predecessor Securities) are

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registered at the close of
business on such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).

     (2) The Company may make payment of any Defaulted Interest on the Securities of any
series in any other lawful manner not inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section and Section 305, each Security delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.

Section 308. Persons Deemed Owners.

     Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person
in whose name such Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and any premium and (subject to Section 305 and Section 307) any
interest on such Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

Section 309. Cancellation.

     All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever,
and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company has not issued and
sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities
shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of in the Trustee’s customary manner.

Section 310. Computation of Interest.

     Except as otherwise specified as contemplated by Section
301 for Securities of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.

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Section 311. CUSIP Numbers.

     The Company in issuing the Securities may use “CUSIP” numbers, ISINs
and “Common Code” numbers (in each case if then generally in use), and, if so, the Trustee shall
use such “CUSIP” numbers, ISINs and “Common Code” 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 identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or omission of such
numbers. The Company will notify the Trustee of any change in “CUSIP” numbers, ISINs or “Common
Code” numbers.

ARTICLE FOUR

SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

     This Indenture shall upon Company Request
cease to be of further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for, and any right to receive additional amounts,
as provided in Section 1007), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when

     (1) either

     (A) all Securities theretofore authenticated and delivered (other than
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and Securities for whose payment
money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or

     (B) all such Securities not theretofore delivered to the Trustee for
cancellation:

     (i) have become due and payable, or

     (ii) will become due and payable at their Stated Maturity within
one year, or

     (iii) 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,

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and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such
purpose money in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and any premium and interest to the date of such
deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;

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

     (3) 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 607, the obligations of the Company to any Authenticating
Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003 shall survive such satisfaction and discharge.

Section 402. Application of Trust Money.

     Subject to the provisions of the last paragraph of
Section 1003, all money deposited with the Trustee pursuant to Section 401 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 (including the Company acting as its own
Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and interest for
whose payment such money has been deposited with the Trustee.

ARTICLE FIVE

REMEDIES

Section 501. Events of Default.

     “Event of Default”, wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

     (1) default in the payment of any interest upon any Security of that series when it
becomes due and payable, and continuance of such default for a period of 30 days; or,

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     (2) default in the payment of the principal of or any premium on any Security of that
series at its Maturity and (if so established as contemplated by Section 301 in respect of
that series), in the case of technical or administrative difficulties only if such default
persists for a period of five days; or

     (3) default in the deposit of any sinking fund payment, when and as due by the terms of
a Security of that series; or

     (4) default in the performance, or breach, of any covenant or warranty of the Company
in this Indenture (other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach 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 at least 25% 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

     (5) the entry by a court having jurisdiction in the premises of (A) a decree or order
for relief in respect of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or
(B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of 90 consecutive
days; or

     (6) the commencement by the Company of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt or insolvent, of the consent by
it to the entry of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or the consent
by it to the filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due; or

     (7) any other Event of Default provided with respect to Securities of that series.

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Section 502. Acceleration of Maturity; Rescission and Annulment.

     If an Event of Default (other
than an Event of Default specified in Section 501(5) or 501(6)) with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities of that series may
declare the principal amount of all the Securities of that series (or, if any Securities of that
series are Original Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) 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) shall become immediately due and payable. If an Event
of Default specified in Section 501(5) or 501(6) with respect to Securities of any series at the
time Outstanding occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion of the principal
amount of such Securities as may be specified by the terms thereof) shall automatically, and
without any declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.

     At any time after such a declaration of acceleration with respect to Securities of 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

     (1) the Company has paid or deposited with the Trustee a sum sufficient to pay

     (A) all overdue interest on all Securities of that series,

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

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

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

     (2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which has become due solely by
such declaration of acceleration, have been cured or waived as provided in Section 513.

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

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Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

     The Company
covenants that if

     (1) 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

     (2) default is made in the payment of the principal of (or premium, if any, on) any
Security at the Maturity thereof,

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 any premium
and interest and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on 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 decreed 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 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 reasonably necessary 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 504. 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 (or lesser amount in the case of Original Issue Discount Securities) 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 (and premium, if any) or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,

     (1) to file and prove a claim for the whole amount of principal (or lesser amount in
the case of Original Issue Discount Securities) (and premium, if any) 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

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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

     (2) to collect and receive any monies 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 607.

     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 proceedings; provided, however,
that the Trustee may on behalf of the Holders, vote for the election of a trustee in bankruptcy or
similar official and be a member of a creditors’ or other similar committee.

Section 505. 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 506. 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 any premium 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 607;

     SECOND: To the payment of the amounts then due and unpaid for principal of and any
premium 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 any premium and interest,
respectively; and

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     THIRD: To the Company.

Section 507. Limitation on Suits.

     Subject to Section 508, 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

     (1) an Event of Default with respect to Securities of such series shall have occurred
and be continuing and such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;

     (2) the Holders of not less than 25% 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;

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

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

     (5) 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;

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 of such Holders.

Section 508. Unconditional Right of Holders to Receive Principal, Premium 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 any
premium and (subject to Sections 305 and 307) interest on such Security on the respective 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 509. 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

30

 

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 510. Rights and Remedies Cumulative.

     Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, 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 prevent the concurrent assertion or employment of any other
appropriate right or remedy.

Section 511. 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 512. Control by Holders.

     Subject to Section 603(5), with respect to the Securities of
any series, 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,
provided that

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

     (2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.

Section 513. 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

     (1) in the payment of the principal of or any premium or interest on any Security of
such series, or

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     (2) in respect of a covenant or provision hereof which under Article Nine 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.

Section 514. 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 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, a court may require any party litigant in such
suit to file an undertaking to pay the costs of such suit, and may assess costs including
reasonable attorneys’ fees and expenses against any such party litigant, in the manner and to the
extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such
an assessment in any suit instituted by the Company or the Trustee.

Section 515. Waiver of Stay or Extension Laws.

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

ARTICLE SIX

THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

     The duties and responsibilities of the Trustee
shall be as provided by the Trust Indenture Act. No implied duties or obligations shall be read
into this Indenture against the Trustee. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether
or not therein expressly so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.

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Section 602. Notice of Defaults.

     If a default occurs hereunder with respect to Securities of any
series that is known to the Trustee, the Trustee shall give the Holders of Securities of such
series notice of such default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section 501(4) with respect
to Securities of such series, no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term “default” means any event which
is, or after notice or lapse of time or both would become, an Event of Default with respect to
Securities of such series.

Section 603. Certain Rights of Trustee.

     Subject to the provisions of Section 601:

     (1) the Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document (whether in its original or facsimile form) believed
by it to be genuine and to have been signed or presented by the proper party or parties;

     (2) any request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order, and any resolution of the Board of
Directors shall be sufficiently evidenced by a Board Resolution;

     (3) whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of negligence or bad faith on its part, conclusively rely upon an Officers’
Certificate;

     (4) the Trustee may consult with counsel of its own selection 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 in good faith and in
reliance thereon;

     (5) 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 pursuant to
this Indenture, unless such Holders shall have offered to the Trustee reasonable security or
indemnity satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;

     (6) 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, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall be entitled
to

33

 

examine the books, records and premises of the Company, personally or by agent or
attorney;

     (7) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;

     (8) the Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;

     (9) the Trustee shall not be deemed to have, or required to take, 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 and this Indenture and specifies that such notice is a notice of an Event of
Default;

     (10) the rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian
and the Person employed to act hereunder; and

     (11) the Trustee may request that the Company deliver an Officers’ Certificate setting
forth the names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by
any person authorized to sign an Officers’ Certificate, including any person specified as so
authorized in any such certificate previously delivered and not superseded.

Section 604. Not Responsible for Recitals or Issuance of Securities.

     The recitals contained
herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken
as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating
Agent shall be accountable for the use or application by the Company of Securities or the proceeds
thereof.

Section 605. May Hold Securities.

     The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Company with the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.

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Section 606. Money Held in Trust.

     Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise agreed with the
Company.

Section 607. Compensation and Reimbursement.

     The Company agrees

     (1) to pay to the Trustee from time to time such compensation for all services rendered
by it hereunder as shall be agreed in writing between the Company and the Trustee (which
compensation shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);

     (2) except as otherwise expressly provided herein, to reimburse the Trustee and any
predecessor Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as shall be determined by a court
of competent jurisdiction to have been caused by its own negligence or bad faith; and

     (3) to indemnify the Trustee and any predecessor Trustee for, and to hold it harmless
against, any and all loss, liability claim, damage or expense, including taxes (other than
those based upon, measured by or determined by the income of the Trustee), incurred without
negligence or bad faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim (whether asserted by the Company, any Holder or any other
Person) or liability in connection with the exercise or performance of any of its powers or
duties hereunder.

     This Section shall survive the termination of the Indenture and the resignation or removal of
the Trustee.

Section 608. Conflicting Interests.

     If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture. To the extent permitted by the Trust Indenture Act, the Trustee
shall not be deemed to have a conflicting interest by virtue of being a trustee under this
Indenture with respect to Securities of more than one series.

Section 609. Corporate Trustee Required; Eligibility.

     There shall at all times be one (and only
one) Trustee hereunder with respect to the Securities of each series, which may be Trustee
hereunder for Securities of one or more other

35

 

series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus
of at least $50,000,000 and has its Corporate Trust Office or another office customarily used as a
place of payment of securities in New York, New York. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at any time the
Trustee with respect to the Securities of any series shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

Section 610. Resignation and Removal; Appointment of Successor.

     No resignation or removal of the
Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.

     The Trustee may resign at any time with respect to the Securities of one or more series by
giving written notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the resigning Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction at the expense of the Company for the appointment of a successor Trustee
with respect to the Securities of such series.

     The Trustee may be removed at any time with respect to the Securities of any series by Act of
the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.

     If at any time:

     (1) the Trustee shall fail to comply with Section 608 after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a Security for at least six
months, or

     (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign
after written request therefor by the Company or by any such Holder, or

     (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect
to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees. If an instrument of acceptance by
a successor Trustee shall not have been delivered to the Trustee within 30 days

36

 

after the giving of
such notice of removal, the Trustee being removed may petition, at the expense of the Company, any
court of competent jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

     If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause, with respect to the Securities of one or more series,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of such series and
that at any time there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 611. If, within one year after
the successor trustee takes office, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders of Securities of such series and
accepted appointment in the manner required by Section 611, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.

     The Company shall give notice of each resignation and each removal of the Trustee with respect
to the Securities of any series and each appointment of a successor Trustee with respect to the
Securities of any series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

Section 611. Acceptance of Appointment by Successor.

     In case of the appointment hereunder of a
successor Trustee with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.

     In case of the appointment hereunder of a successor Trustee with respect to the Securities of
one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and which

37

 

(1) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall 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, it being
understood that nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee hereunder with respect
to the Securities of that or those series to which the appointment of such successor Trustee
relates.

     Upon request of any such successor Trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in the first or second preceding paragraph, as the case may be.

     No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.

Section 612. Merger, Conversion, Consolidation or Succession to Business.

     Any corporation into
which the Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such successor Trustee had
itself authenticated such Securities.

Section 613. Preferential Collection of Claims Against Company.

     If and when the Trustee shall be
or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall
be subject to the provisions of Section 311 of the

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Trust Indenture Act, but only to the extent
therein specified, regarding the collection of claims against the Company (or any such other
obligor). For purposes of Section 311(b)(4) and (6) of such Act, the following terms shall mean:

     (a) “cash transaction” means any transaction in which full payment for goods or
securities sold is made within seven days after delivery of the goods or securities
in currency or in checks or other orders drawn upon banks or bankers and payable
upon demand; and

     (b) “self-liquidating paper” means any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacturing, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents evidencing
title to, possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or merchandise
previously constituting the security, provided the security is received by the
Trustee simultaneously with the creation of the creditor relationship with the
Company arising from the making, drawing, negotiating or incurring of the draft,
bill of exchange, acceptance or obligation.

Section 614. Appointment of Authenticating Agent.

     The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series issued upon original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Any such appointment shall be evidenced by an instrument in
writing signed by a Responsible Officer of the Trustee, and a copy of such instrument shall be
promptly furnished to the Company. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee’s certificate of
authentication, such reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to the requirements of
said supervising or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the effect specified in
this Section.

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     Any corporation into which an Authenticating Agent may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate
agency or corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of the Trustee or the
Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 106 to all Holders of Securities of
the series with respect to which such Authenticating Agent will serve. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under
the provisions of this Section.

     The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section.

     If an appointment with respect to one or more series is made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of
authentication, an alternative certificate of authentication in the following form:

     “This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.

	 	 	 	 	 
	 	The Bank of New York Mellon Trust Company, N.A.,

As Trustee

 	 
	 	By:  	 	 
	 	 	Authenticating Agent 	 
	 	 	 
	 	By:  	
 	 
	 	 	Authorized Officer” 	 
	 	 	 	 

     If all of the Securities of a series may not be originally issued at one time, and if the
Trustee does not have an office capable of authenticating Securities upon original issuance located
in a Place of Payment where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested by the Company in writing (which writing need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint in
accordance with this Section an Authenticating Agent having an office in a Place of Payment
designated by the Company with respect to such series of Securities.

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ARTICLE SEVEN

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701. Company to Furnish Trustee Names and Addresses of Holders.

     With respect to each
series of the Securities, the Company will furnish or cause to be furnished to the Trustee

     (1) semi-annually, not later than 15 days after each Regular Record Date or in the case
of any series of Securities on which semi-annual interest is not payable, not more than 15
days after such semi-annual dates specified by the Trustee, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of Securities of
each series as of the Regular Record Date or such semi-annual date, as the case may be, and

     (2) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date
not more than 15 days prior to the time such list is furnished;

provided, that so long as the Trustee is the Security Registrar, the Company shall not be required
to furnish or cause to be furnished such a list to the Trustee.The Company shall otherwise comply
with Section 310(a) of the Trust Indenture Act.

Section 702. Preservation of Information; Communications to Holders.

     The Trustee shall preserve,
in as current a form as is reasonably practicable, the names and addresses of Holders contained in
the most recent list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may
destroy any list furnished to it as provided in Section 701 upon receipt of a new list so
furnished.

     The rights of Holders to communicate with other Holders with respect to their rights under
this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee,
shall be as provided by the Trust Indenture Act.

     Every Holder of Securities, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of any such information as to the names and addresses of
the Holders in accordance with this Section 702, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under this Section 702.The Company, the Trustee, the
Security Registrar and any other Person shall have the protection of Section 312(c) of the Trust
Indenture Act.

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Section 703. Reports by Trustee.

     The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto, including Sections 313(a), 313(b),
313(c) and 313(d) of the Trust Indenture Act.

     A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the Commission and with
the Company. The Company will notify the Trustee when any Securities are listed on any stock
exchange or delisted therefrom.

Section 704. Reports by Company.

     The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such summaries thereof, as
may be required pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed
with the Commission. The Company
shall otherwise comply with Section 314(a) of the Trust Indenture Act.

     Delivery of such 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 Officers’ Certificates).

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801. Company May Consolidate, Etc., Only on Certain Terms.

     The Company shall not
consolidate with or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person (other than a direct or indirect wholly-owned
subsidiary of the Company) and the Company shall not permit any Person (other than a direct or
indirect wholly-owned subsidiary of the Company) to consolidate with or merge into the Company,
unless:

     (1) the Company is the surviving corporation or, in case the Company shall consolidate
with or merge into another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an entirety shall be a
corporation, limited liability company, partnership or trust, organized and validly existing
under the laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture

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supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the principal of and any
premium and interest (including all additional amounts, if any payable pursuant to
Section 1007) on all the Securities and the performance or observance of every covenant of
this Indenture on the part of the Company to be performed or observed;

     (2) immediately after giving effect to such transaction and treating any indebtedness
which becomes an obligation of the Company or any Subsidiary as a result of such transaction
as having been incurred by the Company or such Subsidiary at the time of such transaction,
no Event of Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing;

     (3) if, as a result of any such consolidation or merger or such conveyance, transfer or
lease, properties or assets of the Company would become subject to a mortgage, pledge, lien,
security interest or other encumbrance which would not be permitted by this Indenture, the
Company or such successor Person, as the case may be, shall take such steps as shall be
necessary effectively to secure the Securities equally and ratably with (or prior to) all
indebtedness secured thereby; and

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

Section 802. Successor Substituted.

     Upon any consolidation of the Company with, or merger of the Company into, any other Person or
any conveyance, transfer or lease of the properties and assets of the Company substantially as an
entirety in accordance with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease 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 had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures Without Consent of Holders.

     Without the consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form reasonably satisfactory to the Trustee, for any of the
following purposes:

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     (1) to evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company herein and in the Securities; or

     (2) to add to the 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 solely for
the benefit of such series) or to surrender any right or power herein conferred upon the
Company; or

     (3) to add any additional Events of Default for the benefit of the Holders of all or
any series of Securities (and if such additional Events of Default are to be for the benefit
of less than all series of Securities, stating that such additional Events of Default are
expressly being included solely for the benefit of such series); or

     (4) 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; or

     (5) to secure the Securities; or

     (6) to establish the form or terms of Securities of any series as permitted by
Sections 201 and 301; or

     (7) 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, pursuant to the
requirements of Section 611; or

     (8) to cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Indenture, provided that such action
shall not adversely affect the interests of the Holders of Securities of any series in any
material respect.

Section 902. Supplemental Indentures With Consent of Holders.

     With the consent of the Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders of Securities

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of such
series under this Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby,

     (1) change the Stated Maturity of the principal of, or any installment of principal of
or interest on, any Security, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or change any obligation of the
Company to pay additional amounts pursuant to Section 1007 (except as contemplated by
Sections 801 and 802 and permitted by Section 901(1)), or reduce the amount of the principal
of an Original Issue Discount Security or any other Security which would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or
change any Place of Payment where, or the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or

     (2) reduce the percentage in principal amount of the Outstanding Securities of any
series, the consent of whose Holders is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences) provided for in this
Indenture, or

     (3) change any obligation of the Company to maintain an office or agency in the places
and for the purposes specified in Section 1002, or

     (4) modify any of the provisions of this Section, Section 513 or Section 1006, except
to increase any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby; provided, however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the references to “the Trustee”
and concomitant changes in this Section and Section 901, or deletion of this proviso, in
accordance with the requirements of Sections 611 and 901(7).

     A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

     It shall not be necessary for any Act of Holders of Securities under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.

Section 903. Execution of Supplemental Indentures.

     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, and (subject to Section 601) shall be fully protected in
relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of

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such
supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the Trustee’s owner’s
rights, duties or immunities under this Indenture or otherwise.

Section 904. Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.

Section 905. Conformity with Trust Indenture Act.

     Every supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.

Section 906. Reference in Securities to Supplemental Indentures.

     Securities of any series authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities
of such series.

ARTICLE TEN

COVENANTS

Section 1001. Payment of Principal, Premium and Interest.

     The Company covenants and agrees for the benefit of Holders of each series of Securities that
it will duly and punctually pay the principal of and any premium and interest on the Securities of
that series in accordance with the terms of the Securities and this Indenture.

Section 1002. Maintenance of Office or Agency.

     The Company will maintain in each Place of Payment for any series an office or agency where
Securities of that series may be presented or surrendered for payment, where Securities of that
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 that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and any change in the
location, of any such office or agency. If at any time the Company shall fail to maintain any such
required office or agency in respect of any series of Securities or shall fail to furnish the
Trustee with the address thereof, such presentations and surrenders of Securities of that series
may be made and notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the same as its agent to receive such

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respective
presentations, surrenders, notices and demands. The Company may also from time to time designate
one or more other offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in each Place of Payment 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 location of any such other office or agency.

Section 1003. Money for Securities Payments to be Held in Trust.

     If the Company shall at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of or any premium or interest on
any of the Securities of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal and any premium or interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.

     Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, prior to each due date of the principal of or any premium or interest on any Securities of
that series, deposit with a Paying Agent a sum sufficient to pay the principal and any premium or
interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.

     The Company will cause each Paying Agent for any series of Securities other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will (1)
comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(2) during the continuance of any default by the Company (or any other obligor upon the Securities
of that series) in the making of any payment in respect of the Securities of that series, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.

     The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.

     Subject to applicable unclaimed property or “escheat laws,” any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal
of or any premium or interest on any Security of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be

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discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect
to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an Authorized Newspaper
in each Place of Payment, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

Section 1004. Statement by Officers as to Default.

     The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the performance and observance
of any of the terms, provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they may have knowledge.
The Company shall deliver to the Trustee, as soon as reasonably practicable and in any event within
20 days after the Company becomes aware of the occurrence of any Event of Default or an event
which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers’
Certificate setting forth the details of such Event of Default or default.

Section 1005. Existence.

     Subject to Article Eight, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights (charter and statutory) and
franchises; provided, however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the ability of the Company to make payments hereunder.

Section 1006. Waiver of Certain Covenants.

     Except as otherwise specified as contemplated by Section 301 for Securities of such series and
as contemplated by Section 508, the Company may, with respect to the Securities of any series, omit
in any particular instance to comply with any term, provision or condition set forth in this
Indenture for the benefit of the Holders of such series if before the time for such compliance the
Holders of at least 50% in principal amount of the Outstanding Securities of such series shall, by
Act of such Holders, either waive such compliance in such instance or generally waive compliance
with such term, provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.

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Section 1007. Additional Amounts.

     If the Securities of a series provide for the payment of additional amounts, the Company will
pay to the Holder of any Security of such series additional amounts as provided therein. Whenever
in this Indenture there is mentioned, in any context, the payment of the principal of or any
premium or interest on, or in respect of, any Security of any series or the net proceeds received
on the sale or exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of additional amounts provided for in this Section to the extent that, in
such context, additional amounts are, were or would be payable in respect thereof pursuant to the
provisions of this Section and express mention of the payment of additional amounts (if applicable)
in any provisions hereof shall not be construed as excluding additional amounts in those provisions
hereof where such express mention is not made.

     If the Securities of a series provide for the payment of additional amounts, at least 10 days
prior to the first Interest Payment Date with respect to that series of Securities (or if the
Securities of that series will not bear interest prior to Maturity, the first day on which a
payment of principal and any premium is made), and at least 10 days prior to each date of payment
of principal and any premium or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers’ Certificate, the Company will furnish the Trustee and
the Company’s principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers’
Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of
principal of and any premium or interest on the Securities of that series shall be made
to Holders of Securities of that series who are United States Aliens without withholding for
or on account of any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers’ Certificate shall
specify by country the amount, if any, required to be withheld on such payments to such Holders of
Securities and the Company will pay to the Trustee or such Paying Agent the additional amounts
required by this Section. The Company covenants to indemnify the Trustee and any Paying Agent for,
and to hold them harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with actions taken or omitted
by any of them in reliance on any Officers’ Certificate furnished pursuant to this Section.

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

Section 1101. Applicability of Article.

     Securities of any series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 301
for such Securities) in accordance with this Article.

Section 1102. Election to Redeem; Notice to Trustee.

     The election of the Company to redeem any Securities shall be evidenced by a Board Resolution
or in another manner specified as contemplated by Section 301 for such Securities. In case of any
redemption at the election of the Company of less than all the Securities of any series

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(including
any such redemption affecting only a single Security), the Company shall, at least 60 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such
series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed (unless all
of the Securities of a specified tenor are to be redeemed). In the case of any redemption of
Securities (i) prior to the expiration of any restriction on such redemption provided in the terms
of such Securities or elsewhere in this Indenture, or (ii) pursuant to an election of the Company
which is subject to a condition specified in the terms of such Securities, the Company shall
furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction or
condition.

Section 1103. Selection by Trustee of Securities to be Redeemed.

     If less than all the Securities of any series are to be redeemed (unless all the Securities of
such series and of a specified tenor are to be redeemed or unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not
previously called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series or of the principal amount of global
securities of such series. If less than all of the Securities of such series and of a specified
tenor are to be redeemed, the particular Securities to be redeemed shall be selected not more than
60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series
and specified tenor not previously called for redemption in accordance with the preceding sentence.

     The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption as aforesaid and, in case of any Securities selected for partial redemption as
aforesaid, the principal amount thereof to be redeemed.

     The provisions of the two preceding paragraphs shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in whole or in part. In
the case of any such redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.

     For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to
be redeemed only in part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.

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Section 1104. Notice of Redemption.

     Notice of redemption shall be given in the manner provided in Section 106 to the Holders of
Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date.

     All notices of redemption shall identify the Securities and state:

     (1) the Redemption Date,

     (2) the Redemption Price,

     (3) if less than all the Outstanding Securities of any series consisting of more than a
single Security are to be redeemed, the identification (and, in the case of partial
redemption of any such Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series consisting of a
single Security are to be redeemed, the principal amount of the particular Security to be
redeemed,

     (4) that on the Redemption Date the Redemption Price will become due and payable upon
each such Security to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date,

     (5) the place or places where such Securities are to be surrendered for payment of the
Redemption Price,

     (6) that the redemption is for a sinking fund, if such is the case, and

     (7) applicable CUSIP number, ISIN or “Common Code” number, if any.

     A notice of redemption published as contemplated by Section 106 need not identify particular
registered Securities to be redeemed.

     Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of
the Company and shall be irrevocable.

     In case of any redemption at the election of the Company, the Company will, at least 35 days
prior to the Redemption Date (unless a shorter notice will be satisfactory to the Trustee), notify
the Trustee of such Redemption Date.

Section 1105. Deposit of Redemption Price.

     Prior to 11:00 a.m. Eastern time on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest
on, all the Securities which are to be redeemed on that date.

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Section 1106. Securities Payable on Redemption Date.

     Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date; provided, however, that,
unless otherwise specified as contemplated by Section 301, installments of interests on Securities
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 as such at the close of business on
the relevant Record Dates according to their terms and the provisions of Section 307.

     If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date
at the rate prescribed therefor in the Security.

Section 1107. Securities Redeemed in Part.

     Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new
Security or Securities of the same series and of like tenor, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.

Section 1108. Purchase of Securities.

     Unless otherwise specified as contemplated by Section 301, the Company and any Affiliate of
the Company may at any time purchase or otherwise acquire Securities in the open market or by
private agreement. Such acquisition shall not operate as or be deemed for any purpose to be a
redemption of the indebtedness represented by such Securities. Any Securities purchased or
acquired by the Company may be delivered to the Trustee and, upon such delivery, the indebtedness
represented thereby shall be deemed to be satisfied. Section 309 shall apply to all Securities so
delivered.

ARTICLE TWELVE

SINKING FUNDS

Section 1201. Applicability of Article.

     The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of any series except as otherwise specified as contemplated by Section 301 for such
Securities.

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     The minimum amount of any sinking fund payment provided for by the terms of any Securities is
herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum
amount provided for by the terms of such Securities is herein referred to as an “optional sinking
fund payment”. If provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities as provided for by the terms of such Securities.

Section 1202. Satisfaction of Sinking Fund Payments with Securities.

     The Company (1) may deliver Outstanding Securities of a series (other than any previously
called for redemption) and (2) may apply as a credit Securities of a series which have been
redeemed either at the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund payment with
respect to any Securities of such series required to be made pursuant to the terms of such
Securities as and to the extent provided for by the terms of such Securities; provided that the
Securities to be so credited have not been previously so credited. The Securities to be so credited
shall be received and credited for such purpose by the Trustee at the Redemption Price, as
specified in the Securities so to be redeemed, for redemption through operation of the sinking fund
and the amount of such sinking fund payment shall be reduced accordingly.

Section 1203. Redemption of Securities for Sinking Fund.

     Not less than 45 days prior (unless a shorter period shall be satisfactory to the Trustee) to
each sinking fund payment date for any Securities, the Company will deliver to the Trustee an
Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, 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 Securities pursuant to Section 1202 and will also deliver to the Trustee
any Securities to be so delivered. The Trustee shall select any Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 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 1104. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 1106 and 1107.

ARTICLE THIRTEEN

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 1301. Company’s Option to Effect Legal Defeasance or Covenant Defeasance.

     The Company may at its option, at any time elect to have either Section 1302 or Section 1303
applied to the Outstanding Securities of any series upon compliance with the conditions set forth
below in this Article Thirteen.

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Section 1302. Legal Defeasance and Discharge.

     Upon the Company’s exercise of the option provided in Section 1301 applicable to this Section,
the Company shall be deemed to have been discharged from its obligations with respect to the
Outstanding Securities of any series on the date the conditions set forth below are satisfied
(hereinafter, “legal defeasance”). For this purpose, such legal defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding
Securities of such series and to have satisfied all its other obligations under the Securities of
such series and this Indenture insofar as the Securities of such series are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same),
except for the following which shall survive until otherwise terminated or discharged hereunder:
(A) the rights of Holders of the Securities of such series to receive, solely from the trust fund
described in Section 1304 and as more fully set forth in such Section, payments in respect of the
principal of and any premium and interest on the Securities of such series when such payments are
due, (B) the Company’s obligations with respect to such Securities under Sections 304, 305, 306,
1002 and 1003, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder and
(D) this Article Thirteen. Subject to compliance with this Article Thirteen, the Company may
exercise its option under this Section 1302 notwithstanding the prior exercise of its option under
Section 1303.

Section 1303. Covenant Defeasance.

     Upon the Company’s exercise of the option provided in Section 1301 applicable to this Section,
(i) the Company shall be released from its obligations with respect to the Securities of such
series under Section 801, Section 1006 and Section 1007 and any covenants provided pursuant to
Section 301 for the benefit of the Holders of such Securities (to the extent so provided pursuant
to Section 301) and (ii) the occurrence of an event specified in Sections 501(3) or (4) shall not
be deemed to be an Event of Default on and after the date the conditions set forth below are
satisfied (hereinafter, “covenant defeasance”). For this purpose, such covenant defeasance means
that the Company may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or clause whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or clause or by reason of any
reference in any such Section or clause to any other provision herein or in any other document, but
the remainder of this Indenture and such Securities shall be unaffected thereby.

Section 1304. Conditions to Legal Defeasance or Covenant Defeasance.

     The following shall be the conditions to application of either Section 1302 or Section 1303 to
the then Outstanding Securities of any series:

     (1) The Company shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee satisfying the requirements of Section 609 who shall agree to
comply with the provisions of this Article Thirteen applicable to it) 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 the Securities of such
series, (A) money in an amount, or (B) Government Obligations which through the scheduled

54

 

payment of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants or a nationally recognized investment banking firm expressed
in a written certification thereof delivered to the Trustee, (if such firms at such time
customarily deliver such certifications, and, if not, such certification may be from the
principal financial officer of the Company), to pay and discharge, and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge, the principal of,
premium, if any, and each installment of interest on the Securities on the Stated Maturity
of such principal or installment of interest in accordance with the terms of this Indenture
and of the Securities of such series. For this purpose, “Government Obligations” means, with
respect to any series of Securities, securities that are (x) direct obligations of the
government that issued the currency in which such series is denominated (or, if such series
is denominated in euro, the direct obligations of any government that is a member of the
European Monetary Union) for the payment of which its full faith and credit is pledged or
(y) obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of such government the payment of which is unconditionally guaranteed as a
full faith and credit obligation by such government, which, in either case, are not callable
or redeemable at the option of the issuer thereof and shall also include a depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian
with respect to any Government Obligation where the relevant government is the United States
of America or a specific payment of principal of or interest on any such Government
Obligation held by such custodian for the account of the holder of such depositary 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 such Government Obligation or the specific payment
of principal of or interest on such Government Obligation evidenced by such depository
receipt.

     (2) In the event of an election to have Section 1302 apply to any Securities or any
series of Securities, as the case may be, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (y) since the date 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 shall confirm that, the Holders of the
Outstanding Securities of such series will not recognize 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 amount, in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge had not occurred.

     (3) In the event of an election to have Section 1303 apply to any Securities or any
series of Securities, as the case may be, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such
series will not recognize 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
amount, in the same manner and at the same times as would have been the case if such
deposit and covenant defeasance had not occurred.

55

 

     (4) The Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, together stating that all conditions precedent provided for relating to
either the legal defeasance under Section 1302 or the covenant defeasance under Section 1303
(as the case may be) have been complied with.

     (5) Such legal defeasance or covenant defeasance shall not result in the trust arising
from such deposit constituting an investment company as defined in the Investment Company
Act, or such trust shall be qualified under such act or exempt from regulation thereunder.

Section 1305. Deposited Money and Government Obligations to be Held in Trust; Other
Miscellaneous Provisions.

     Subject to the provisions of the last paragraph of Section 1003, all money and Government
Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other
trustee are referred to collectively, for purposes of this Section 1305, as the “Trustee”) pursuant
to Section 1304 in respect of the Securities of such series shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Securities of such series and this
Indenture, to the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of the Securities of
such series, of all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except to the extent
required by law.

     The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the Government Obligations deposited pursuant to Section 1304 or the
principal and interest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the Outstanding Securities.

     Anything in this Article Thirteen to the contrary notwithstanding, the Trustee shall deliver
or pay to the Company from time to time upon Company Request any money or Government Obligations
held by it as provided in Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants (or a nationally recognized investment banking firm or the principal
financial officer of the Company, as appropriate) expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant defeasance.

Section 1306. Reinstatement.

     If the Trustee or the Paying Agent is unable to apply any money in accordance with
Section 1302 or 1303 by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations
under this Indenture and the Securities of such series shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Thirteen until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 1302 or 1303; provided,

56

 

however, that if the Company makes any payment of principal of (and premium, if any) or interest on
any Security following the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of the Securities of such series to receive such payment from the money held
by the Trustee or the Paying Agent.

Section 1307. Deposited Money and Government Obligations to be Held in Trust.

     Subject to the provisions of the last paragraph of Section 1003, all money and Government
Obligations (or other property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee pursuant to Section 1304 in respect of any Securities of any
series shall be held in trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders
of such Securities of all sums due and to become due thereon in respect of principal, premium, if
any, and interest, if any, but such money need not be segregated from other funds except as
provided herein and except to the extent required by law.

ARTICLE FOURTEEN

MEETING OF HOLDERS OF SECURITIES

Section 1401. Purposes for which Meetings may be Called.

     A meeting of Holders of Securities of any or all series of Securities may be called at any
time and from time to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by this Indenture to be
made, given or taken by Holders of Securities of such series.

Section 1402. Call, Notice and Place of Meetings.

     (a) The Trustee may at any time call a meeting of Holders of Securities of any
series for any purposes specified in Section 1401, to be held at any such time and
at such place in the Borough of Manhattan, the City of New York, as the Trustee
shall determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given, in
the manner provided in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.

     (b) In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in principal amount of the Outstanding Securities of any
series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 1401, by written
request setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have made the first publication of the notice of
such meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Company or the
Holders of Securities of such series in the amount above specified, as the case

57

 

may
be, may determine the time and the place in the Borough of Manhattan, the City of
New York for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in subsection (a) of this Section.

Section 1403. Persons Entitled to Vote at Meetings.

     Upon the calling of a meeting of Holders with respect to the Securities of a series all or
part of which are represented by a Security, a record date shall be established for determining
Holders of Outstanding Securities of such series entitled to vote at such meeting, which record
date shall be the close of business on the day the notice of the meeting of Holders is given in
accordance with Section 1402. The Holders on such record date, and their designated proxies, and
only such Persons, shall be entitled to vote at such meeting of Holders. To be entitled to vote at
any meeting of Holders, a Person shall (a) be a Holder of one or more Securities or (b) be a Person
appointed by an instrument in writing as proxy by a Holder of one or more Securities; provided,
however, that in the case of any meeting of Holders with respect to the Securities of a series all
or part of which are represented by a Security, only Holders, or their designated proxies, of
record on the record date established pursuant to Section 1403 hereof shall be entitled to vote at
such meeting. The only Persons who shall be entitled to be present or to speak at any meeting of
Holders shall be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the Company and its
counsel.

Section 1404. Quorum; Action.

     The Persons entitled to vote a majority in principal amount of the Outstanding Securities of a
series shall constitute a quorum for a meeting of Holders of Securities of such series; provided,
however, that if any action is to be taken at such meeting with respect to a consent or waiver
which this Indenture expressly provides may be given by the Holders of not less than 50% in
principal amount of the Outstanding Securities of a series, the Persons entitled to vote 50% in
principal amount of the Outstanding Securities of such series shall constitute a quorum. In the
absence of a quorum within 30 minutes of the time appointed for any such meeting, the
 meeting shall, if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a
period of not less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1402(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series which shall constitute a quorum.

     Except as limited by the proviso to the first paragraph of Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted by the affirmative vote of the Holders of a majority in principal amount
of the Outstanding Securities of that series; provided, however, that, except as limited by

58

 

the
proviso to the first paragraph of Section 902, any resolution with respect to any consent or waiver
which this Indenture expressly provides may be given by the Holders of not less than 50% in
principal amount of the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly convened and at which a quorum is present as aforesaid only by the
affirmative vote of the Holders of 50% in principal amount of the Outstanding Securities of that
series; and provided, further, that, except as limited by the proviso to the first paragraph of
Section 902, any resolution with respect to any request, demand, authorization, direction, notice,
consent, waiver or other action which this Indenture expressly provides may be made, given or taken
by the Holders of a specified percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or any adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding Securities of that series.

     Any resolution passed or decision taken at any meeting of Holders of Securities of any series
duly held in accordance with this Section shall be binding on all the Holders of Securities of such
series and the related coupons, whether or not present or represented at the meeting.

Section 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings.

     (a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of Holders
of Securities of a series in regard to proof of the holding of Securities of such
series and of the appointment of proxies and in regard to the appointment and duties
of inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the conduct
of the meeting as is shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved in the
manner specified in Section 104 and the appointment of any
proxy shall be proved in the manner specified in Section 104 or by having the
signature of the person executing the proxy witnessed or guaranteed by any trust
company, bank or banker authorized by Section 104. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 104 or other proof.

     (b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the Company or
by Holders of Securities as provided in Section 1402(b), in which case the Company
or the Holders of Securities of the series calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Persons entitled
to vote a majority in principal amount of the Outstanding Securities of such series
represented at the meeting.

     (c) At any meeting each Holder of a Security of such series or proxy shall be
entitled to one vote for each $1,000 principal amount of the Outstanding

59

 

Securities
of such series held or represented by him; provided, however, that no vote shall be
cast or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.

     (d) Any meeting of Holders of Securities of any series duly called pursuant to
Section 1402 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be held as
so adjourned without further notice.

Section 1406. Counting Votes and Recording Action of Meetings.

     The vote upon any resolution submitted to any meeting of Holders of Securities of any series
shall be by written ballots on which shall be subscribed the signatures of the Holders of
Securities of such series or of their representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any series shall be
prepared by the secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if applicable, Section 1404.
Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary
of the meeting and one such copy shall be delivered to the Company, and another to the Trustee
to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the matters therein
stated.

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

[Signature page follows]

60

 

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

	 	 	 	 	 
	 	PETROQUEST ENERGY, INC.

 	 
	 	By:  	/s/ J. Bond Clement
 	 
	 	 	Name:  	J. Bond Clement 	 
	 	 	Title:  	Executive Vice President,

Chief Financial Officer and Treasurer 	 
	 
	 	THE BANK OF NEW YORK MELLON 

TRUST COMPANY, N.A.

 	 
	 	By:  	/s/ Kash Asghar
 	 
	 	 	Name:  	Kash Asghar 	 
	 	 	Title:  	Senior Associate 	 
	 

[Signature Page to Base Indenture – 10% Senior Notes due 2017]exv4w3

Exhibit 4.3

EXECUTION COPY

 

PETROQUEST ENERGY, INC.

10% SENIOR NOTES DUE 2017

SUBSIDIARY GUARANTORS

 

FIRST SUPPLEMENTAL INDENTURE

Dated as of August 19, 2010

TO THE INDENTURE

Dated as of August 19, 2010

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee

 

 

 

CROSS-REFERENCE TABLE

	 	 	 	 	 	 	 	 	 
	TIA	 	 	Indenture
	Section	 	Section
	310(a)

	(1	)	 	 	 	 	7.10	 
	(a)

	(2	)	 	 	 	 	7.10	 
	(a)

	(3	)	 	 	 	 	N.A.	 
	(a)

	(4	)	 	 	 	 	N.A.	 
	(b)

	 	 	 	 	 	 	7.08; 7.10	 
	(c)

	 	 	 	 	 	 	N.A.	 
	311(a)

	 	 	 	 	 	 	7.11	 
	(b)

	 	 	 	 	 	 	7.11	 
	(c)

	 	 	 	 	 	 	N.A.	 
	312(a)

	 	 	 	 	 	 	2.05	 
	(b)

	 	 	 	 	 	 	11.03	 
	(c)

	 	 	 	 	 	 	11.03	 
	313(a)

	 	 	 	 	 	 	7.06	 
	(b)

	(1	)	 	 	 	 	N.A.	 
	(b)

	(2	)	 	 	 	 	7.06	 
	(c)

	 	 	 	 	 	 	11.02	 
	(d)

	 	 	 	 	 	 	7.06	 
	314(a)

	 	 	 	 	 	 	4.02	 
	 

	 	 	 	 	 	 	11.02	 
	(b)

	 	 	 	 	 	 	N.A.	 
	(c)

	(1	)	 	 	 	 	11.04	 
	(c)

	(2	)	 	 	 	 	11.04	 
	(c)

	(3	)	 	 	 	 	N.A.	 
	(d)

	 	 	 	 	 	 	N.A.	 
	(e)

	 	 	 	 	 	 	11.05	 
	(f)

	 	 	 	 	 	 	4.13	 
	315(a)

	 	 	 	 	 	 	7.01	 
	(b)

	 	 	 	 	 	 	7.05; 11.02	 
	(c)

	 	 	 	 	 	 	7.01	 
	(d)

	 	 	 	 	 	 	7.01	 
	(e)

	 	 	 	 	 	 	6.11	 
	316(a)
	(last sentence)
	 	 	11.06	 
	(a)

	(1	)(A)	 	 	 	 	6.05	 
	(a)

	(1	)(B)	 	 	 	 	6.04	 
	(a)

	(2	)	 	 	 	 	N.A.	 
	(b)

	 	 	 	 	 	 	6.07	 
	317(a)

	(1	)	 	 	 	 	6.08	 
	(a)

	(2	)	 	 	 	 	6.09	 
	(b)

	 	 	 	 	 	 	2.04	 
	318(a)

	 	 	 	 	 	 	11.01	 
	 

	 	 	 	N.A. means Not Applicable.	 	 	 	 

 

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

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1
	 	 	 	 
	 
	Application of Supplemental Indenture and Creation of Securities; Definitions and Incorporation by
Reference
	 	 	 	 
	 
	SECTION 1.01. Application of this Supplemental Indenture.
	 	 	1	 
	SECTION 1.02. Effect of Supplemental Indenture
	 	 	2	 
	SECTION 1.03. Definitions.
	 	 	3	 
	SECTION 1.04. Other Definitions.
	 	 	37	 
	SECTION 1.05. Incorporation by Reference of Trust Indenture Act
	 	 	37	 
	SECTION 1.06. Rules of Construction
	 	 	38	 
	 
	ARTICLE 2
	 	 	 	 
	 
	The Securities
	 	 	 	 
	 
	SECTION 2.01. Form and Dating
	 	 	38	 
	SECTION 2.02. Execution and Authentication
	 	 	39	 
	SECTION 2.03. Registrar and Paying Agent
	 	 	39	 
	SECTION 2.04. Paying Agent To Hold Money in Trust
	 	 	40	 
	SECTION 2.05. Securityholder Lists
	 	 	40	 
	SECTION 2.06. Transfer and Exchange
	 	 	40	 
	SECTION 2.07. Replacement Securities
	 	 	41	 
	SECTION 2.08. Outstanding Securities
	 	 	41	 
	SECTION 2.09. Temporary Securities
	 	 	41	 
	SECTION 2.10. Cancellation
	 	 	41	 
	SECTION 2.11. Defaulted Interest
	 	 	42	 
	SECTION 2.12. CUSIP Numbers, ISINs, etc
	 	 	42	 
	SECTION 2.13. Issuance of Additional Securities
	 	 	42	 
	 
	ARTICLE 3
	 	 	 	 
	 
	Redemption
	 	 	 	 
	 
	SECTION 3.01. Notices to Trustee
	 	 	43	 
	SECTION 3.02. Selection of Securities To Be Redeemed
	 	 	43	 
	SECTION 3.03. Notice of Redemption
	 	 	43	 
	SECTION 3.04. Effect of Notice of Redemption
	 	 	44	 
	SECTION 3.05. Deposit of Redemption Price
	 	 	44	 
	SECTION 3.06. Securities Redeemed in Part
	 	 	44	 

 

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 4
	 	 	 	 
	 
	Covenants
	 	 	 	 
	 
	SECTION 4.01. Payment of Securities
	 	 	44	 
	SECTION 4.02. SEC Reports
	 	 	45	 
	SECTION 4.03. Limitation on Indebtedness
	 	 	45	 
	SECTION 4.04. Limitation on Restricted Payments
	 	 	48	 
	SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries
	 	 	52	 
	SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock
	 	 	54	 
	SECTION 4.07. Limitation on Affiliate Transactions
	 	 	57	 
	SECTION 4.08. Change of Control
	 	 	59	 
	SECTION 4.09. Limitation on Liens
	 	 	61	 
	SECTION 4.10. Limitation on Sale/Leaseback Transactions
	 	 	61	 
	SECTION 4.11. Future Guarantors
	 	 	62	 
	SECTION 4.12. Compliance Certificate
	 	 	62	 
	SECTION 4.13. Further Instruments and Acts
	 	 	62	 
	 
	ARTICLE 5
	 	 	 	 
	 
	Successor Company
	 	 	 	 
	 
	SECTION 5.01. Merger and Consolidation
	 	 	62	 
	 
	ARTICLE 6
	 	 	 	 
	 
	Defaults and Remedies
	 	 	 	 
	 
	SECTION 6.01. Events of Default
	 	 	64	 
	SECTION 6.02. Acceleration
	 	 	66	 
	SECTION 6.03. Other Remedies
	 	 	67	 
	SECTION 6.04. Waiver of Past Defaults
	 	 	67	 
	SECTION 6.05. Control by Majority
	 	 	67	 
	SECTION 6.06. Limitation on Suits
	 	 	68	 
	SECTION 6.07. Rights of Holders to Receive Payment
	 	 	68	 
	SECTION 6.08. Collection Suit by Trustee
	 	 	68	 
	SECTION 6.09. Trustee May File Proofs of Claim
	 	 	68	 
	SECTION 6.10. Priorities
	 	 	69	 
	SECTION 6.11. Undertaking for Costs
	 	 	69	 
	SECTION 6.12. Waiver of Stay or Extension Laws
	 	 	69	 

-ii-

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 7
	 	 	 	 
	 
	Trustee
	 	 	 	 
	 
	SECTION 7.01. Duties of Trustee
	 	 	70	 
	SECTION 7.02. Rights of Trustee
	 	 	71	 
	SECTION 7.03. Individual Rights of Trustee
	 	 	71	 
	SECTION 7.04. Trustee’s Disclaimer
	 	 	72	 
	SECTION 7.05. Notice of Defaults
	 	 	72	 
	SECTION 7.06. Reports by Trustee to Holders
	 	 	72	 
	SECTION 7.07. Compensation and Indemnity
	 	 	72	 
	SECTION 7.08. Replacement of Trustee
	 	 	73	 
	SECTION 7.09. Successor Trustee by Merger
	 	 	74	 
	SECTION 7.10. Eligibility; Disqualification
	 	 	74	 
	SECTION 7.11. Preferential Collection of Claims Against Company
	 	 	74	 
	 
	ARTICLE 8
	 	 	 	 
	 
	Discharge of Indenture; Defeasance
	 	 	 	 
	 
	SECTION 8.01. Discharge of Liability on Securities; Defeasance
	 	 	74	 
	SECTION 8.02. Conditions to Defeasance
	 	 	75	 
	SECTION 8.03. Application of Trust Money
	 	 	77	 
	SECTION 8.04. Repayment to the Company
	 	 	77	 
	SECTION 8.05. Indemnity for Government Obligations
	 	 	77	 
	SECTION 8.06. Reinstatement
	 	 	77	 
	 
	ARTICLE 9
	 	 	 	 
	 
	Amendments
	 	 	 	 
	 
	SECTION 9.01. Without Consent of Holders
	 	 	77	 
	SECTION 9.02. With Consent of Holders
	 	 	78	 
	SECTION 9.03. Compliance with Trust Indenture Act
	 	 	79	 
	SECTION 9.04. Revocation and Effect of Consents and Waivers
	 	 	79	 
	SECTION 9.05. Notation on or Exchange of Securities
	 	 	80	 
	SECTION 9.06. Trustee To Sign Amendments
	 	 	80	 
	SECTION 9.07. Payment for Consent
	 	 	80	 
	 
	ARTICLE 10
	 	 	 	 
	 
	Subsidiary Guarantees
	 	 	 	 
	 
	SECTION 10.01. Guarantees
	 	 	80	 
	SECTION 10.02. Limitation on Liability
	 	 	82	 
	SECTION 10.03. Successors and Assigns
	 	 	82	 

-iii-

 

	 	 	 	 	 
	 	 	Page	 
	SECTION 10.04. No Waiver
	 	 	82	 
	SECTION 10.05. Modification
	 	 	83	 
	SECTION 10.06. Release of Subsidiary Guarantor
	 	 	83	 
	SECTION 10.07. Contribution
	 	 	84	 
	 
	ARTICLE 11
	 	 	 	 
	 
	Miscellaneous
	 	 	 	 
	 
	SECTION 11.01. Trust Indenture Act Controls
	 	 	84	 
	SECTION 11.02. Notices
	 	 	84	 
	SECTION 11.03. Communication by Holders with Other Holders
	 	 	85	 
	SECTION 11.04. Certificate and Opinion as to Conditions Precedent
	 	 	85	 
	SECTION 11.05. Statements Required in Certificate or Opinion
	 	 	85	 
	SECTION 11.06. When Securities Disregarded
	 	 	85	 
	SECTION 11.07. Rules by Trustee, Paying Agent and Registrar
	 	 	86	 
	SECTION 11.08. Legal Holidays
	 	 	86	 
	SECTION 11.09. Governing Law
	 	 	86	 
	SECTION 11.10. No Recourse Against Others
	 	 	86	 
	SECTION 11.11. Successors
	 	 	86	 
	SECTION 11.12. Multiple Originals
	 	 	86	 
	SECTION 11.13. Table of Contents; Headings
	 	 	86	 
	 
	Appendix

	 	 	 	 
	 
	
Exhibit A —  Form of Security
	 	 	 	 

-iv-

 

     FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of August 19, 2010
to the Indenture dated as of August 19, 2010 (the “Base Indenture,” together with this Supplemental
Indenture, the “Indenture”) among PETROQUEST ENERGY, INC., a Delaware corporation (the “Company”),
the SUBSIDIARY GUARANTORS identified herein and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a
national banking association (the “Trustee”).

     WHEREAS, the Company has executed and delivered to the Trustee the Base Indenture providing
for the issuance from time to time of one or more series of the securities issued thereunder;

     WHEREAS, Section 901 of the Base Indenture provides for the Company and the Trustee to enter
into an indenture supplemental to the Base Indenture without the consent of any Holders to
establish the forms or terms of Securities of any series as permitted by Section 201 and Section
301 of the Base Indenture;

     WHEREAS, pursuant to Section 301 of the Base Indenture, the Company wishes to provide for the
issuance of the 10% Senior Notes due 2017 (together with other securities issued under the
Indenture, the “Securities”), the forms and terms of such Securities and the terms, provisions and
conditions thereof to be set forth as provided in this Supplemental Indenture; and

     WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental
Indenture, and all requirements necessary to make this Supplemental Indenture a valid, binding and
enforceable instrument in accordance with its terms, and to make the Securities, when executed by
the Company and authenticated and delivered by the Trustee, the valid, binding and enforceable
obligations of the Company, have been done and performed, and the execution and delivery of this
Supplemental Indenture has been duly authorized in all respects;

     NOW, THEREFORE, in consideration of the covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1

Application of Supplemental Indenture and Creation of Securities;

Definitions and Incorporation by Reference

          SECTION 1.01. Application of this Supplemental Indenture.

Notwithstanding any other provision of this Supplemental Indenture, the provisions of this
Supplemental Indenture, including as provided in Section 1.02, and any amendments or modifications
to the terms of the Base Indenture made herein, are expressly and solely for the benefit of the
Holders (and not for the benefit of any other series of securities issued under the Base
Indenture). The Securities constitute a series of securities issued under the Base Indenture as
provided in Section 201 thereof. Unless otherwise expressly specified, references in this
Supplemental Indenture to specific Article numbers or

 

 

Section numbers refer to Articles and Sections contained in this Supplemental Indenture, and not
the Base Indenture or any other document. All the Securities issued under this Supplemental
Indenture shall be treated as a single class for all purposes of the Indenture, including waivers,
amendments, redemptions and offers to purchase.

          SECTION 1.02. Effect of Supplemental Indenture. With respect to the Securities only,
the Base Indenture shall be supplemented pursuant to Section 901 thereof to establish the terms of
these Securities as set forth in this Supplemental Indenture, including as follows:

               (a) Definitions. The definitions and other provisions of general application set forth in
Section 101 of the Base Indenture are deleted and replaced in their entirety by the provisions of
Sections 1.03, 1.04, 1.05 and 1.06 of this Supplemental Indenture;

               (b) The Securities. The provisions of Sections 701 and 702 and Articles Two and Three
of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 2 of
this Supplemental Indenture;

               (c) Redemption. The provisions of Article Eleven of the Base Indenture are deleted
and replaced in their entirety by the provisions of Article 3 of this Supplemental Indenture;

               (d) Covenants. The provisions of Section 704 and Article Ten of the Base Indenture
are deleted and replaced in their entirety by the provisions of Article 4 of this Supplemental
Indenture;

               (e) Successor Company. The provisions of Article Eight of the Base Indenture are
deleted and replaced in their entirety by Article 5 of this Supplemental Indenture;

               (f) Defaults and Remedies. The provisions of Article Five of the Base Indenture are
deleted and replaced in their entirety by the provisions of Article 6 of this Supplemental
Indenture;

               (g) Trustee. The provisions of Section 703 and Article Six of the Base Indenture are
deleted and replaced in their entirety by the provisions of Article 7 of this Supplemental
Indenture;

               (h) Discharge of Indenture; Defeasance. The provisions of Articles Four and Thirteen
of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 8 of
this Supplemental Indenture;

               (i) Amendments. The provisions of Section 104 and Articles Nine and Fourteen of the
Base Indenture are deleted and replaced in their entirety by the provisions of Article 9 of this
Supplemental Indenture;

2

 

               (j) Subsidiary Guarantees. The provisions of the Base Indenture shall be amended by
inserting the provisions of Article 10 of this Supplemental Indenture;

               (k) Miscellaneous. The provisions of Sections 102, 103, 105, 106, 107, 108, 109, 112,
113 and 116 of the Base Indenture are deleted and replaced in their entirety by the provisions of
Article 11 of this Supplemental Indenture and the provisions of Sections 110, 111, 114 and 115 of
the Base Indenture are deleted in their entirety; and

               (l) Sinking Funds. The provisions of Article Twelve of the Base Indenture are deleted
in their entirety.

To the extent that the provisions of this Supplemental Indenture (including those referred to in
clauses (a) through (l) above) conflict with any provision of the Base Indenture, the provisions of
this Supplemental Indenture shall govern and be controlling solely with respect to the Securities.

          SECTION 1.03. Definitions.

          “Additional Assets” means:

     (1) any property, plant or equipment used or useful in a Related Business;

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

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

provided, however, that any such Restricted Subsidiary described in clause (2) or
(3) above is primarily engaged in a Related Business.

          “Additional Securities” means Securities issued under the Indenture after the Issue Date and
in compliance with Section 2.13 and 4.03, it being understood that any Security issued in exchange
for or replacement of any Security issued on the Issue Date shall not be an Additional Security.

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

          (a) the sum of:

     (1) discounted future net revenue from proved oil and gas reserves of the Company and
its Restricted Subsidiaries calculated in accordance with SEC guidelines (but giving effect
to applicable Oil and Gas Hedging Contracts in place as of the date of determination
(whether positive or negative)) before any state,
federal, foreign or other income taxes, as estimated by the Company in a reserve

3

 

report prepared as of the end of the most recently completed fiscal year for which audited
financials are available, as increased by, as of the date of determination, the discounted
future net revenue calculated in accordance with SEC guidelines (utilizing the prices
utilized in such year end reserve report) but giving effect to applicable Oil and Gas
Hedging Contracts in place as of the date of determination (whether positive or negative)
of:

     (A) estimated proved oil and gas reserves of the Company and its Restricted
Subsidiaries attributable to acquisitions consummated since the date of such
reserve report, and

     (B) estimated oil and gas reserves of the Company and its Restricted
Subsidiaries attributable to extensions, discoveries and other additions and upward
determinations of estimates of proved oil and gas reserves (including previously
estimated development costs incurred during the period and the accretion of
discount since the prior period end) due to exploration, development or
exploitation, production or other activities which reserves were not reflected in
such reserve report;

and decreased by, as of the date of determination, the discounted
future net revenue (calculated in accordance with SEC guidelines using prices used
in such year-end reserve report) attributable to:

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

     (D) reductions in the estimated oil and gas reserves of the Company and its
Restricted Subsidiaries reflected in such reserve report since the date of such
reserve report attributable to downward determinations of estimates of proved crude
oil and natural gas reserves due to exploration, development or exploitation,
production or other activities conducted or otherwise occurring since the date of
such reserve report;

provided, however, that, in the case of each of the determinations made
pursuant to clauses (A) through (D), such increases and decreases shall be estimated by the
Company’s engineers in accordance with customary reserve engineering practices;

     (2) the capitalized costs that are attributable to oil and gas properties of the
Company and its Restricted Subsidiaries to which no proved oil and gas reserves are
attributed, based on the Company’s books and records as of a date no earlier than the end
of the most recent fiscal quarter for which internal financial
statements of the Company have been made available prior to the date of determination;

4

 

     (3) the Net Working Capital as of the end of the most recent fiscal quarter for which
internal financial statements of the Company have been made available prior to the date of
determination; and

     (4) the greater of (i) the net book value as of a date no earlier than the end of the
most recent fiscal quarter for which internal financial statements of the Company have been
made available prior to the date of determination and (ii) the fair market value, as
estimated by the Company, of other tangible assets of the Company and its Restricted
Subsidiaries as of a date within the immediately preceding twelve months; minus

     (b) to the extent not otherwise taken into account in the immediately preceding clause
(a), the sum of

     (1) minority interests;

     (2) any net gas balancing liabilities of the Company and its Restricted Subsidiaries
reflected in the Company’s latest annual or quarterly balance sheet (to the extent not
deducted in calculating Net Working Capital in accordance with clause (a)(3) above of this
definition);

     (3) the discounted future net revenue, as of the effective date of such reserve
report, calculated in accordance with SEC guidelines (utilizing the same prices utilized in
the Company’s year-end reserve report), attributable to reserves that are required to be
delivered to third parties to fully satisfy the obligations of the Company and its
Restricted Subsidiaries with respect to Volumetric Production Payments on the schedules
specified with respect thereto; and

     (4) the discounted future net revenue, as of the effective date of such reserve
report, calculated in accordance with SEC guidelines, attributable to reserves subject to
Dollar-Denominated Production Payments that, based on the estimates of production included
in determining the discounted future net revenue specified in the immediately preceding
clause (a)(1) (utilizing the same prices utilized in the Company’s year-end reserve
report), would be necessary to satisfy fully the obligations of the Company and its
Restricted Subsidiaries with respect to Dollar-Denominated Production Payments on the
schedules specified with respect thereto.

          Whether the Company uses the successful efforts method of accounting or the full cost (or
similar method) method of accounting, ACNTA shall be calculated as if the Company were using the
full cost method of accounting.

          “Adjusted Treasury Rate” means, with respect to any redemption date, (i) the yield, under the
heading which represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated “H.15(519)” or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant maturity under the
caption

5

 

“Treasury Constant Maturities”, for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after September 1, 2014, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on
a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date, in each case calculated on the third Business Day immediately
preceding the redemption date, plus in the case of each of clauses (i) and (ii) 0.50%.

          “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” when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

          “Applicable Premium” means, with respect to a Security at any redemption date, the greater of
(i) 1.00% of the principal amount of such Security and (ii) the excess, if any, of (A) the
aggregate present value at such redemption date of (1) the redemption price of such Security on
September 1, 2014 (such redemption price being described in the table appearing in paragraph 5 of
the Securities, exclusive of any accrued interest) plus (2) all required remaining
scheduled interest payments due on such Security through September 1, 2014 (but excluding accrued
and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted
Treasury Rate, over (B) the principal amount of such Security on such redemption date.

          “Asset Disposition” means any sale, lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including
any disposition by means of a merger, consolidation or similar transaction (each referred to for
the purposes of this definition as a “disposition”), of:

     (1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’
qualifying shares or shares required by applicable law to be held by a Person other than
the Company or a Restricted Subsidiary);

     (2) any other assets (other than Capital Stock) of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such Restricted
Subsidiary

(other than, in the case of clauses (1) and (2) above,

6

 

     (A) a disposition by a Restricted Subsidiary to the Company or by the Company
or a Restricted Subsidiary to a Restricted Subsidiary;

     (B) for purposes of Section 4.06 only, (i) a disposition that constitutes a
Restricted Payment (or would constitute a Restricted Payment but for the exclusions
from the definition thereof) and that is not prohibited by Section 4.04 and (ii) a
disposition of all or substantially all the assets of the Company in accordance
with Section 5.01;

     (C) any single transaction or series of related transactions that: (a)
involves the disposition of assets having a Fair Market Value of less than $7.5
million; or (b) results in Net Available Cash to the Company and its Restricted
Subsidiaries of less than $7.5 million;

     (D) the trade or exchange (“Permitted Asset Exchange”) by the Company or any
Restricted Subsidiary of any oil and gas lease, oil or gas property or interest
therein and any related assets owned or held by the Company or such Restricted
Subsidiary or the capital stock of a Subsidiary for (a) any oil and gas lease, oil
or gas property or interest therein and any related assets owned or held by another
Person or (b) the Capital Stock of another Person that becomes a Restricted
Subsidiary as a result of such trade or exchange or the Capital Stock of another
Person that is a joint venture, partnership or other similar entity, in each case
all or substantially all of whose assets consist of crude oil or natural gas
properties, including in the case of either of clauses (a) or (b), any cash or cash
equivalents necessary in order to achieve an exchange of equivalent value;
provided, however, that the value of the property or Capital Stock
received by the Company or any Restricted Subsidiary in such trade or exchange
(including any cash or cash equivalents) is substantially equal to the Fair Market
Value of the property (including any cash or cash equivalents so traded or
exchanged);

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

     (F) any Production Payment and Reserve Sale created, issued or assumed in
connection with the financing of the acquisition of oil and gas properties that are
subject thereto (and within 90 days after such acquisition), so long as the owner
or purchaser of such Production Payment and Reserve Sale has recourse solely to
such oil and gas
properties and to the proceeds thereof, subject to the obligation of the
grantor or transferor of such Production Payment and Reserve Sale to operate and
maintain the related oil and gas properties in a prudent manner or other customary
standard, to deliver the associated production (if required) and to indemnify with
respect to environmental, title and other matters customary in the Oil and Gas
Business;

7

 

     (G) any issuance or sale of Capital Stock of the Company;

     (H) a disposition of cash or Temporary Cash Investments;

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

     (J) the creation of a Lien (but not the sale or other disposition of the
property subject to such Lien)).

          For the avoidance of doubt, any disposition of oil, natural gas or other hydrocarbons or other
mineral products and related equipment or surplus, damaged, unserviceable, worn-out or obsolete
equipment; any abandonment, relinquishment, farm-in, farm-out, lease, sub-lease or other
disposition of developed or undeveloped or both developed and underdeveloped oil and gas
properties; the provision of services, equipment and other assets for the operation and development
of the Company’s and its Restricted Subsidiaries’ oil and natural gas wells (notwithstanding that
any such transaction may be recorded as an asset sale in accordance with full cost accounting
guidelines); any assignment of a working, overriding royalty or net profits interest to an employee
or consultant of the Company or any of its Restricted Subsidiaries in connection with the
generation of prospects or the exploration or development of oil and natural gas projects; and the
liquidation of any assets received in settlement of claims owed to the Company or any Restricted
Subsidiary, in each such case in the ordinary course of business of the Company or its
Subsidiaries, shall not constitute an Asset Disposition.

          “Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest rate implicit in the Sale/Leaseback
Transaction, compounded annually) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such Sale/Leaseback Transaction (including any period
for which such lease has been extended); provided, however, that if such
Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness
represented thereby shall be determined in accordance with the definition of “Capital Lease
Obligation”.

          “Average Life” means, as of the date of determination, with respect to any Indebtedness, the
quotient obtained by dividing:

     (1) the sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of or redemption or similar
payment with respect to such Indebtedness multiplied by the amount of such payment by

     (2) the sum of all such payments.

8

 

          “Board of Directors” means the Board of Directors of the Company or any committee thereof duly
authorized to act on behalf of such Board.

          “Business Day” means each day which is not a Legal Holiday.

          “Capital Lease Obligation” means an obligation that is required to be classified and accounted
for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a penalty. For purposes of Section 4.09, a
Capital Lease Obligation shall be deemed to be secured by a Lien on the property being leased.

          “Capital Stock” of any Person means any and all shares, interests (including partnership
interests), rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.

          “Change of Control” means any one of the following events:

     (1) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause (1) such person shall be deemed to
have “beneficial ownership” of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of time) directly
or indirectly, of more than 50% of the total voting power of the Voting Stock of the
Company;

     (2) individuals who on the Issue Date constituted the Board of Directors (together
with any new directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority of the
directors of the Company then still in office who were either directors on the Issue Date
or whose election or nomination for
election was previously so approved) cease for any reason to constitute a majority of
the Board of Directors then in office;

     (3) the adoption by the stockholders of the Company of a plan of liquidation or
dissolution of the Company; or

     (4) the merger or consolidation of the Company with or into another Person or the
merger of another Person with or into the Company, or the sale of all or substantially all
the assets of the Company (determined on a consolidated basis) to another Person other than
a transaction following which (i) in the case of a merger or consolidation transaction,
holders of securities that represented 100% of the Voting Stock of the Company immediately
prior to such transaction (or other securities into which such securities are converted as
part of such merger or

9

 

consolidation transaction) own directly or indirectly at least a
majority of the voting power of the Voting Stock of the surviving Person in such merger or
consolidation transaction immediately after such transaction and (ii) in the case of a sale
of assets transaction, each transferee becomes an obligor in respect of the Securities and
a Subsidiary of the transferor of such assets.

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Securities from the
redemption date to September 1, 2014, that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of
a maturity most nearly equal to September 1, 2014.

          “Comparable Treasury Price” means, with respect to any redemption date, if clause (ii) of the
Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by
the Trustee, Reference Treasury Dealer Quotations for such redemption date.

          “Consolidated Coverage Ratio” as of any date of determination means the ratio of (a) the
aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters prior
to the date of such determination for which internal financial statements are available to (b)
Consolidated Interest Expense for such four fiscal quarters; provided, however,
that:

     (1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since
the beginning of such period that remains outstanding or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or
both, EBITDA and Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period;

     (2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of such period or if any
Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case
other than Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and the related commitment terminated) on the date
of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio,
EBITDA and Consolidated Interest Expense for such period shall be calculated on a
pro forma basis as if such discharge had occurred on the first day of such
period and as if the Company or such Restricted Subsidiary had not earned the interest
income actually earned during such period in respect of cash or Temporary Cash Investments
used to repay, repurchase, defease or otherwise discharge such Indebtedness;

10

 

     (3) if since the beginning of such period the Company or any Restricted Subsidiary
shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount
equal to EBITDA (if positive) directly attributable to the assets which are the subject of
such Asset Disposition for such period, or increased by an amount equal to EBITDA (if
negative), directly attributable thereto for such period and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the Company and its
continuing Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries
are no longer liable for such Indebtedness after such sale);

     (4) if since the beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring a calculation to
be made hereunder, which constitutes producing oil and gas properties or all or
substantially all of an operating unit of a business, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition
had occurred on the first day of such period; and

     (5) if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition, any Investment
or acquisition of assets that would have required an adjustment pursuant to clause (3) or
(4) above if made by the
Company or a Restricted Subsidiary during such period, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or acquisition had occurred on the
first day of such period.

          For purposes of this definition, whenever pro forma effect is to be given to
an acquisition of assets, the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith,
the pro forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of the Company; including any reasonably identifiable and factually
supportable pro forma changes to EBITDA, including any pro forma
expenses and costs reductions, that have occurred or in the judgment of such officer are reasonably
expected to occur within 12 months of the date of the applicable transaction (regardless of whether
such expense or cost reduction or any other operating improvements could then be reflected properly
in pro forma financial statements prepared

11

 

in accordance with Regulation S-X under
the Securities Act or any other regulation or policy of the SEC). If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest on such
Indebtedness shall be calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate Agreement applicable
to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months).
If any Indebtedness that is being given pro forma effect bears an interest rate at
the option of the Company, the interest rate shall be calculated by applying such optional rate
chosen by the Company. Interest on Indebtedness that may optionally be determined at an interest
rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or
other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then
based upon such optional rate chosen as the Company may designate.

          If any Indebtedness is Incurred under a revolving credit facility and is being given
pro forma effect, the interest on such Indebtedness shall be calculated based on
the average daily balance of such Indebtedness for the four fiscal quarters or such shorter period
for which such facility was outstanding or if such revolving credit facility was created after the
end of such four fiscal quarters, the average daily balance of such Indebtedness during the period
from the date of creation of such revolving credit facility to the date of such calculation, in
each case, provided that such average daily balance shall take into account any repayment
of Indebtedness under such revolving credit facility as provided under clause (2) above.

          “Consolidated Interest Expense” means, for any period, the total interest expense of the
Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in
such total interest expense, and to the extent incurred by the Company or its Restricted
Subsidiaries, without duplication:

     (1) interest expense attributable to Capital Lease Obligations;

     (2) amortization of debt discount and debt issuance cost;

     (3) capitalized interest;

     (4) non-cash interest expense;

     (5) commissions, discounts and other fees and charges owed with respect to letters of
credit and bankers’ acceptance financing;

     (6) net payments pursuant to Interest Rate Agreements;

     (7) dividends accrued in respect of all Disqualified Stock of the Company and all
Preferred Stock of any Restricted Subsidiary, in each case held by Persons other than the
Company or a Restricted Subsidiary (other than dividends payable solely in Capital Stock
(other than Disqualified Stock) of the Company); provided, however, that
such dividends shall be multiplied by a fraction the numerator of which is one and the
denominator of which is one minus the effective combined tax rate of the issuer of
such Preferred Stock (expressed as a

12

 

decimal) for such period (as estimated by the chief
financial or accounting Officer of the Company in good faith);

     (8) interest incurred in connection with Investments in discontinued operations;

     (9) interest accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted
Subsidiary; and

     (10) the cash contributions to any employee stock ownership plan or similar trust to
the extent such contributions are used by such plan or trust to pay interest or fees to any
Person (other than the Company) in connection with Indebtedness Incurred by such plan or
trust,

minus, to the extent included above, write-off of deferred financing costs (and interest)
attributable to Dollar-Denominated Production Payments.

          “Consolidated Net Income” means, for any period, the net income of the Company and its
consolidated Subsidiaries; provided, however, that there shall not be included in
such Consolidated Net Income:

     (1) any net income of any Person (other than the Company) if such Person is not a
Restricted Subsidiary, except that:

     (A) subject to the exclusion contained in clause (4) below, the Company’s
equity in the net income of any such Person for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during or with respect to such period to the Company or
a Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in clause (3)
below); and

     (B) the Company’s equity in a net loss of any such Person for such period
shall be included in determining such Consolidated Net Income to the extent such
loss has been funded with cash from the Company or a Restricted Subsidiary during
such period;

     (2) any net income (or loss) of any Person acquired by the Company or a Subsidiary in
a pooling of interests transaction (or any transaction accounted for in a manner similar to
a pooling of interests) for any period prior to the date of such acquisition;

     (3) any net income of any Restricted Subsidiary if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the Company,
except that:

13

 

     (A) subject to the exclusion contained in clause (4) below, the Company’s
equity in the net income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash that
could have been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid to another
Restricted Subsidiary, to the limitation contained in this clause); and

     (B) the Company’s equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income;

     (4) any gain (or loss), together with any provision for taxes related to such gain (or
loss), realized upon the sale or other disposition of any assets of the Company, its
consolidated Subsidiaries or any other Person (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary course of business
and any gain (or loss) together with any provision for taxes related to such gain (or
loss), realized upon the sale or other disposition of any Capital Stock of any Person;

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

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

     (7) extraordinary or non-recurring gains or losses, together with any provision for
taxes related to such extraordinary or non-recurring gains or losses;

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

     (9) any “ceiling limitation” on oil and gas properties or other asset impairment
writedowns under GAAP or SEC guidelines; and

     (10) any after-tax effect of income (loss) from the early extinguishment of
Indebtedness,

in each case, for such period. Notwithstanding the foregoing, for the purposes of Section 4.04
only, there shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or return of capital to
the Company or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions,
proceeds or returns increase the amount of Restricted Payments permitted under Section
4.04(a)(3)(E).

          “Consolidated Net Worth” means the total of the amounts shown on the balance sheet of the
Company and its consolidated Subsidiaries, determined on a

14

 

consolidated basis in accordance with
GAAP, as of the end of the most recent fiscal quarter of the Company for which internal financial
statements are available prior to the taking of any action for the purpose of which the
determination is being made, as the sum of:

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

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

     (3) any retained earnings or earned surplus,

less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Stock.

          “Convertible Preferred Stock” means the 6.875% Series B Cumulative Convertible Perpetual
Stock, par value $0.001 per share, of the Company outstanding, and with such terms as are in
effect, on the Issue Date.

          “Credit Agreement” means the Credit Agreement dated as of October 2, 2008, by and among the
Company, PetroQuest Energy, L.L.C., JPMorgan Chase Bank, N.A., as the administrative agent, Calyon
New York Branch, as syndication agent, Bank of America, N.A., as documentation agent, and the
lenders party thereto, together with the related documents thereto (including the term loans and
revolving loans thereunder, any guarantees and security documents), as amended, extended, renewed,
restated, replaced, supplemented or otherwise modified (in whole or in part, and without limitation
as to amount, terms, conditions, covenants and other provisions) from time to time, and any
agreement (and related document), including an indenture or any receivables
financing (including through the sale of receivables to lenders, purchasers or special purpose
entities formed to borrow from (or sell such receivables to) such lenders or other financiers
against such receivables) or other document, governing Indebtedness Incurred to Refinance, replace
(contemporaneously or otherwise) or supplement, in whole or in part, the borrowings and commitments
then outstanding or permitted to be outstanding under such Credit Agreement or any successor or
alternative Credit Agreement or other debt facilities, including any such agreements which increase
the aggregate amount of Indebtedness outstanding or permitted to be outstanding under such Credit
Agreement or debt facilities, whether by the same or any other lender or investor, or group of
lenders or investors.

          “Currency Agreement” means any foreign exchange contract, currency swap agreement or other
similar agreement with respect to currency values.

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

          “Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms
(or by the terms of any security into which it is convertible or for which it is exchangeable at
the option of the holder) or upon the happening of any event:

15

 

     (1) matures or is mandatorily redeemable (other than redeemable only for Capital Stock
of such Person which is not itself Disqualified Stock) pursuant to a sinking fund
obligation or otherwise;

     (2) is convertible or exchangeable at the option of the holder for Indebtedness or
Disqualified Stock; or

     (3) is mandatorily redeemable or must be purchased upon the occurrence of certain
events or otherwise, in whole or in part;

in each case on or prior to the date that is 91 days after the earlier of the date (a) of the
Stated Maturity of the Securities and (b) on which there are no Securities outstanding;
provided, however, that any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to require such Person to
purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control”
occurring prior to the date 91 days after the earlier date determined pursuant to clause (a) or (b)
above shall not constitute Disqualified Stock if:

     (A) the “asset sale” or “change of control” provisions applicable to such
Capital Stock are not materially more favorable to the holders of such Capital
Stock than the terms applicable to the Securities in Section 4.06 and Section 4.08;
and

     (B) any such requirement only becomes operative after compliance with such
terms applicable to the Securities, including the purchase of any Securities
tendered pursuant thereto.

The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase
price shall be calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to the Indenture; provided,
however, that if such Disqualified Stock could not be required to be redeemed, repaid or
repurchased at the time of such determination, the redemption, repayment or repurchase price shall
be the book value of such Disqualified Stock as reflected in the most recent financial statements
of such Person.

For the avoidance of doubt, the Convertible Preferred Stock shall not be deemed to be Disqualified
Stock.

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

          “EBITDA” for any period means the sum of Consolidated Net Income, plus the following
to the extent deducted in calculating such Consolidated Net Income:

     (1) all income tax expense of the Company and its consolidated Restricted
Subsidiaries;

16

 

     (2) Consolidated Interest Expense;

     (3) depreciation, depletion and amortization expense of the Company and its
consolidated Restricted Subsidiaries (excluding amortization expense attributable to a
prepaid item that was paid in cash in a prior period);

     (4) all other non-cash charges of the Company and its consolidated Restricted
Subsidiaries (excluding any such non-cash charge to the extent that it represents an
accrual of or reserve for cash expenditures in any future period but including non-cash
charges resulting from the application of FAS 143) less all non-cash items of
income of the Company and its consolidated Restricted Subsidiaries (other than accruals of
revenue by the Company and its consolidated Restricted Subsidiaries in the ordinary course
of business); and

     (5) if the Company changes its method of accounting from full cost to successful
efforts or a similar method of accounting, consolidated exploration and abandonment expense
of the Company and its Restricted Subsidiaries;

in each case for such period and less, to the extent included in calculating such
Consolidated Net Income and in excess of any costs or expenses attributable thereto and deducted in
calculating such Consolidated Net Income, the sum of:

     (A) the amount of deferred revenues that are amortized during such period and
are attributable to reserves that are subject to Volumetric Production Payments;
and

     (B) amounts recorded in accordance with GAAP as repayments of principal and
interest pursuant to Dollar-Denominated Production Payments.

          Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and
the depreciation, depletion and amortization and non-cash charges of, a Restricted Subsidiary shall
be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion, including by reason of minority interests) that the net income or loss of such
Restricted Subsidiary was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant
to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders.

          “Employee Stock Purchase Plan” means any employee stock ownership plan or trust or any
employee stock purchase plan or other similar arrangement for the benefit of employees of the
Company or of some or all of its Restricted Subsidiaries or of both the Company and some or all of
its Restricted Subsidiaries.

17

 

          “Equity Offering” means a public or private offering for cash by the Company of Capital Stock
(other than Disqualified Stock), other than public offerings registered on Form S-8.

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

          “Fair Market Value” means, with respect to any Asset Disposition, Sale/Leaseback Transaction
or Restricted Payment (or Investment or Permitted Investment), the price that would be negotiated
in an arm’s-length transaction between a willing seller and a willing and able buyer, neither of
which is under any compulsion to complete the transaction, as such price is determined in good
faith by:

     (1) if the value of such Asset Disposition, Sale/Leaseback Transaction or Restricted
Payment (or Investment or Permitted Investment) is less than $10.0 million, an Officer of
the Company; and

     (2) if the value of such Asset Disposition, Sale/Leaseback Transaction or Restricted
Payment (or Investment or Permitted Investment) is $10.0 million or greater, the Board of
Directors of the Company.

          “Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not organized
under the laws of the United States of America or any State thereof or the District of Columbia.

          “GAAP” means generally accepted accounting principles in the United States of America as in
effect as of the Issue Date, including those set forth in:

     (1) the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants;

     (2) statements and pronouncements of the Financial Accounting Standards Board;

     (3) such other statements by such other entity as approved by a significant segment of
the accounting profession; and

     (4) the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including opinions and
pronouncements in staff accounting bulletins and similar written statements from the
accounting staff of the SEC.

          “Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect,
contingent or otherwise, of such Person:

18

 

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

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

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

          “Guaranty Agreement” means a supplemental indenture, in a form satisfactory to the Trustee,
pursuant to which a Subsidiary Guarantor guarantees the
Company’s obligations with respect to the Securities on the terms provided for in the
Indenture.

          “Hedging Obligations” of any Person means the obligations of such Person pursuant to any
Interest Rate Agreement, Currency Agreement or Oil and Gas Hedging Contract.

          “Holder” or “Securityholder” means the Person in whose name a Security is registered on the
Registrar’s books.

          “Incur” means issue, assume, Guarantee, incur or otherwise become liable for;
provided, however, that any Indebtedness of a Person existing at the time such
Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise)
shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The
term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of
determining compliance with Section 4.03:

     (1) amortization of debt discount or the accretion of principal with respect to a
non-interest bearing or other discount security;

     (2) the accrual of interest or dividends and the payment of regularly scheduled
interest in the form of additional Indebtedness of the same instrument or the payment of
regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of
the same class and with the same terms;

     (3) the obligation to pay a premium in respect of Indebtedness arising in connection
with the issuance of a notice of redemption or making of a mandatory offer to purchase such
Indebtedness; and

     (4) unrealized losses, charges or other similar obligations in respect of Hedging
Obligations (including those resulting from the application of FAS 133),

19

 

shall not be deemed to be the Incurrence of Indebtedness.

          “Indebtedness” means, with respect to any Person on any date of determination (without
duplication):

     (1) the principal in respect of (A) indebtedness of such Person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable, including, in each case, any premium
on such indebtedness to the extent such premium has become due and payable;

     (2) all Capital Lease Obligations of such Person and all Attributable Debt in respect
of Sale/ Leaseback Transactions entered into by such Person;

     (3) all obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such Person and all obligations of such
Person under any title retention agreement (but excluding any accounts payable or other
liability to trade creditors arising in the ordinary course of business);

     (4) all obligations of such Person for the reimbursement of any obligor on any letter
of credit, bankers’ acceptance or similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other than obligations described in
clauses (1) through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day following
payment on the letter of credit);

     (5) the amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock of such Person or, with respect to
any Preferred Stock of any Subsidiary of such Person, the principal amount of such
Preferred Stock to be determined in accordance with the Indenture (but excluding, in each
case, any accrued dividends);

     (6) all obligations of the type referred to in clauses (1) through (5) of other
Persons and all dividends of other Persons for the payment of which, in either case, such
Person is responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee;

     (7) all obligations of the type referred to in clauses (1) through (6) of other
Persons secured by any Lien on any property or asset of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation being deemed to be the
lesser of the fair market value of such property or assets and the amount of the obligation
so secured;

     (8) to the extent not otherwise included in this definition, Hedging Obligations of
such Person; and

20

 

     (9) any guarantee by such Person of production or payment with respect to a Production
Payment, but excluding guarantees with respect to operation and maintenance of the related
oil and gas properties in a prudent manner, delivery of the associated production (if
required) and other such contractual obligations.

Notwithstanding the foregoing, in connection with the purchase by the Company or any Restricted
Subsidiary of any business, the term “Indebtedness” shall exclude post-closing payment adjustments
to which the seller may become entitled to the extent such payment is determined by a final closing
balance sheet or such payment depends on the performance of such business after the closing;
provided, however, that, at the time of closing, the amount of any such payment is
not determinable and, to the extent such payment thereafter becomes fixed and determined, the
amount is paid within 60 days
thereafter. In addition, except as expressly provided in clause (9) above, Production Payments and
Reserve Sales shall not constitute “Indebtedness.”

          The amount of Indebtedness of any Person at any date shall be the outstanding balance at such
date of all obligations as described above; provided, however, that in the case of
Indebtedness sold at a discount, the amount of such Indebtedness at any time shall be the accreted
value thereof at such time.

          “Independent Qualified Party” means an investment banking firm, accounting firm or appraisal
firm of national standing; provided, however, that such firm is not an Affiliate of
the Company.

          “Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement
or other financial agreement or arrangement with respect to exposure to interest rates.

          “Investment” in any Person means any direct or indirect advance (other than advances to
customers in the ordinary course of business that are recorded as accounts receivable on the
balance sheet of the lender), loan or other extensions of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such
Person. If the Company or any Restricted Subsidiary issues, sells or otherwise disposes of any
Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto,
such Person is no longer a Restricted Subsidiary, any Investment by the Company or any Restricted
Subsidiary in such Person remaining after giving effect thereto shall be deemed to be a new
Investment at such time. The acquisition by the Company or any Restricted Subsidiary of a Person
that holds an Investment in a third Person shall be deemed to be an Investment by the Company or
such Restricted Subsidiary in such third Person at such time. Except as otherwise provided for
herein, the amount of an Investment shall be its Fair Market Value at the time the Investment is
made and without giving effect to subsequent changes in value.

21

 

          For purposes of the definition of “Unrestricted Subsidiary”, the definition of “Restricted
Payment” and Section 4.04:

     (1) “Investment” shall include the portion (proportionate to the Company’s equity
interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary
of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a permanent
“Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to (A)
the Company’s “Investment” in such Subsidiary at the time of such redesignation
less (B) the portion (proportionate to the Company’s equity interest in such
Subsidiary) of the
Fair Market Value of the net assets of such Subsidiary at the time of such
redesignation; and

     (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at
its Fair Market Value at the time of such transfer.

          “Issue Date” means August 19, 2010.

          “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not
required to be open in the State of New York or the State of Texas.

          “Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in the nature thereof).

          “Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency
business.

          “Net Available Cash” from an Asset Disposition means cash payments received therefrom
(including any cash payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other non-cash form), in each
case net of:

     (1) all legal, title, recording, engineering, environmental, accounting, investment
banking, brokerage and relocation expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under GAAP, as a consequence of such Asset Disposition;

     (2) all payments made on any Indebtedness which is secured by any assets subject to
such Asset Disposition, in accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which must

22

 

by its terms, or in order
to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid
out of the proceeds from such Asset Disposition;

     (3) all distributions and other payments required to be made to minority interest
holders in Restricted Subsidiaries as a result of such Asset Disposition;

     (4) the deduction of appropriate amounts as a reserve, in accordance with GAAP,
against any liabilities associated with the property or other assets disposed in such Asset
Disposition and retained by the Company or any Restricted Subsidiary after such Asset
Disposition; and

     (5) any portion of the purchase price from an Asset Disposition placed in escrow,
whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities
in respect of such Asset Disposition or otherwise in connection with that Asset
Disposition; provided, however, that upon the termination of that escrow,
Net Available Cash shall be increased by any portion of funds in the escrow that are
released to the Company or any Restricted Subsidiary.

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

          “Net Working Capital” of the Company means:

     (1) all current assets of the Company and its Restricted Subsidiaries, except current
assets from commodity price risk management activities arising in the ordinary course of
business; minus

     (2) all current liabilities of the Company and its Restricted Subsidiaries, except
current liabilities included in Indebtedness (including the Securities), current
liabilities from commodity price risk management activities arising in the ordinary course
of business, current liabilities recorded with respect to stock-based compensation and
current liabilities that constitute estimated abandonment costs pursuant to FAS 143;

in each case, determined in accordance with GAAP.

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

     (1) the holders of such Indebtedness agree that they will look solely to the assets so
acquired that secure such Indebtedness, and except for the interest of the

23

 

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

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

          “Obligations” means, with respect to any Indebtedness, all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, and other amounts payable pursuant to
the documentation governing such Indebtedness.

          “Officer” means the Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Treasurer or the Secretary of the Company.

          “Officers’ Certificate” means a certificate signed by two Officers, which certificate shall be
deemed to be, and the Trustee may rely on its being, executed and delivered by the Officers signing
it on behalf of the Company.

          “Oil and Gas Business” means:

     (1) the acquisition, exploration, exploitation, development, operation and disposition
of interests in oil, natural gas, other hydrocarbon and mineral properties;

     (2) the gathering, marketing, distribution, treating, processing, storage, refining,
selling and transporting of any production from such interests or properties and the
marketing of oil, natural gas, other hydrocarbons and minerals obtained from unrelated
Persons;

     (3) any business or activity relating to or arising from exploration for or
exploitation, development, production, treatment, processing, storage, refining,
transportation, gathering or marketing of oil, natural gas, other hydrocarbons and minerals
and products produced in association therewith;

     (4) any other related energy business, including power generation and electrical
transmission business where fuel required by such business is supplied, directly or
indirectly, from oil, natural gas, other hydrocarbons and minerals produced substantially
from properties in which the Company or the Restricted Subsidiaries, directly or
indirectly, participate;

     (5) any business relating to oil field sales and service; and

24

 

     (6) any activity necessary, appropriate or incidental to the activities described in
the preceding clauses (1) through (5) of this definition.

          “Oil and Gas Hedging Contract” means any oil and gas hedging agreement and other agreement or
arrangement designed to protect the Company or any Restricted Subsidiary against fluctuations in
oil and gas prices.

          “Oil and Gas Liens” means:

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

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

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

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

25

 

     (a) were in existence on the Issue Date,

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

     (c) constitute Asset Sales made in compliance with Section 4.06; and

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

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

          “Permitted Business Investments” means Investments made in the ordinary course of, and of a
nature that is or shall have become customary in, the Oil and Gas Business, including through
agreements, transactions, interests or arrangements that permit one to share risk or costs, comply
with regulatory requirements regarding local ownership or satisfy other objectives customarily
achieved through the conduct of the Oil and Gas Business jointly with third parties, including:

     (1) ownership of oil, natural gas, other related hydrocarbon and mineral properties or
any interest therein or gathering, transportation, processing, storage or related systems;
and

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

          “Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

     (1) the Company, a Restricted Subsidiary or a Person that shall, upon the making of
such Investment, become a Restricted Subsidiary; provided, however, that
the primary business of such Person or Restricted Subsidiary is a Related Business;

26

 

     (2) another Person if, as a result of such Investment, such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all
its assets to, the Company or a Restricted Subsidiary; provided,
however, that such Person’s primary business is a Related Business;

     (3) cash and Temporary Cash Investments;

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

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

     (6) loans or advances to employees made in the ordinary course of business consistent
with past practices of the Company or such Restricted Subsidiary;

     (7) stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments;

     (8) any Person to the extent such Investment represents the non-cash portion of the
consideration received for (A) an Asset Disposition as permitted pursuant to Section 4.06
or (B) a disposition of assets not constituting an Asset Disposition;

     (9) any Person where such Investment was acquired by the Company or any of its
Restricted Subsidiaries (A) in exchange for any other Investment or accounts receivable
held by the Company or any such Restricted Subsidiary in connection with or as a result of
a bankruptcy, workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (B) as a result of a foreclosure by the Company or any
of its Restricted Subsidiaries with respect to any secured Investment or other transfer of
title with respect to any secured Investment in default;

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

     (11) any Person to the extent such Investments consist of Hedging Obligations
otherwise permitted under Section 4.03;

27

 

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

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

     (14) any Person to the extent such Investments are made solely with or in exchange for
Capital Stock (other than Disqualified Stock) of the Company;

     (15) Permitted Business Investments; and

     (16) Persons to the extent such Investments, when taken together with all other
Investments made pursuant to this clause (16) and outstanding on the date such Investment
is made, do not exceed $10.0 million.

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

     (1) pledges or deposits by such Person under worker’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or appeal bonds or
bonds of a similar nature to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent, in each case Incurred in the
ordinary course of business;

     (2) Liens incurred in the ordinary course of business (other than in connection with
Indebtedness) or imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in
each case for sums not yet due or being contested in good faith by appropriate proceedings
or other Liens arising out of judgments or awards against such Person with respect to which
such Person shall then be proceeding with an appeal or other proceedings for review, Liens
to the extent arising by virtue of any statutory or common law provision relating to
banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or
other funds maintained with a creditor depository institution; provided,
however, that (A) such deposit account is not a dedicated cash collateral account
and is not subject to restrictions against access by the Company in excess
of those set forth by regulations promulgated by the Federal Reserve Board and

28

 

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

     (3) Liens for taxes, assessments and governmental charges not yet subject to penalties
for nonpayment or which are being contested in good faith by appropriate proceedings;

     (4) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to
the request of and for the account of such Person in the ordinary course of its business;
provided, however, that such letters of credit do not constitute
Indebtedness;

     (5) minor survey exceptions, minor encumbrances, easements or reservations of, or
rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as to the use
of property or Liens incidental to the conduct of the business of such Person or to the
ownership of its properties which were not Incurred in connection with Indebtedness and
which do not in the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Person;

     (6) Liens securing Indebtedness Incurred to finance the construction, purchase or
lease of, or repairs, improvements or additions to, property, plant or equipment of such
Person; provided, however, that the Lien may not extend to any other
property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is
Incurred (other than assets and property affixed or appurtenant thereto), and the
Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more
than 180 days after the later of the acquisition, completion of construction, repair,
improvement, addition or commencement of full operation of the property subject to the
Lien;

     (7) Liens to secure Indebtedness and related Obligations permitted under Section
4.03(b)(1);

     (8) Liens existing on the Issue Date;

     (9) Liens on property or shares of Capital Stock of another Person at the time such
other Person becomes a Subsidiary of such Person; provided, however, that
the Liens may not extend to any other property owned by such Person or any of its
Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

     (10) Liens on property at the time such Person or any of its Subsidiaries acquires the
property, including any acquisition by means of a merger or consolidation with or into such
Person or a Subsidiary of such Person; provided,
however, that the Liens may not extend to any other property owned by such
Person or any of its Restricted Subsidiaries (other than assets and property affixed or
appurtenant thereto);

29

 

     (11) Liens securing Indebtedness or other obligations of a Subsidiary of such Person
owing to such Person or a Restricted Subsidiary of such Person;

     (12) Liens securing Hedging Obligations so long as such Hedging Obligations are
permitted to be Incurred under the Indenture;

     (13) Oil and Gas Liens;

     (14) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in
part, of any Indebtedness secured by any Lien referred to in the foregoing clause (6), (8),
(9) or (10); provided, however, that:

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

     (B) the Indebtedness secured by such Lien at such time is not increased to any
amount greater than the sum of (i) the outstanding principal amount or, if greater,
committed amount of the Indebtedness described under clause (6), (8), (9) or (10)
at the time the original Lien became a Permitted Lien and (ii) an amount necessary
to pay any fees and expenses, including premiums, related to such refinancing,
refunding, extension, renewal or replacement; and

     (15) Liens securing Indebtedness in an amount which, together with the aggregate
outstanding amount of all other Indebtedness secured by Liens Incurred pursuant to this
clause (15), does not exceed the greater of (A) $5.0 million and (B) 1.0% of ACNTA.

Notwithstanding the foregoing, “Permitted Liens” shall not include any Lien described in clause
(6), (9) or (10) above to the extent such Lien applies to any Additional Assets or capital
expenditures acquired directly or indirectly from Net Available Cash pursuant to Section 4.06. For
purposes of this definition, the term “Indebtedness” shall be deemed to include interest on, and
fees and expenses incurred in connection with, such Indebtedness.

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

          “PetroQuest L.L.C.” means PetroQuest Energy, L.L.C., a Louisiana limited liability company,
and its successors.

          “Preferred Stock”, as applied to the Capital Stock of any Person, means Capital Stock of any
class or classes (however designated) which is preferred as to the

30

 

payment of dividends or
distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of such Person.

          “principal” of a Security means the principal of the Security plus the premium, if
any, payable on the Security which is due or overdue or is to become due at the relevant time.

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

          “Production Payments and Reserve Sales” means the grant or transfer to any Person of a
Dollar-Denominated Production Payment, Volumetric Production Payment, royalty, overriding royalty,
net profits interest, master limited partnership interest or other interest in oil and gas
properties, reserves or the right to receive all or a portion of the production or the proceeds
from the sale of production attributable to such properties or reserves.

          “Prospectus Supplement” means the final prospectus supplement dated as of August 12, 2010, and
used in connection with the offering of the Securities issued on the Issue Date.

          “Quotation Agent” means the Reference Treasury Dealer selected by the Company.

          “Reference Treasury Dealer” means J.P. Morgan Securities Inc. and its successors and assigns
and two other nationally recognized investment banking firms selected by the Company that are
primary U.S. Government securities dealers.

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

          “Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay,
prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or
replacement for, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

          “Refinancing Indebtedness” means Indebtedness that Refinances any Indebtedness of the Company
or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with the
Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided,
however, that:

     (1) (a) if the Stated Maturity of the Indebtedness being Refinanced is earlier than
the Stated Maturity of the Securities, the Refinancing Indebtedness

31

 

has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being Refinanced and (b) if the
Stated Maturity of the Indebtedness being refinanced is later than the Stated Maturity of
the Securities, the Refinancing Indebtedness has a Stated Maturity at least 91 days later
than the Stated Maturity of the Securities;

     (2) such Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of the
Indebtedness being Refinanced;

     (3) the amount of such Indebtedness that may be deemed Refinancing Indebtedness shall
not exceed the aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then outstanding
(plus fees and expenses, including any premium (including any premium paid in
connection with a tender offer for such Indebtedness) and defeasance costs) under the
Indebtedness being Refinanced; and

     (4) if the Indebtedness being Refinanced is subordinate in right of payment to the
Securities, such Refinancing Indebtedness is subordinate in right of payment to the
Securities at least to the same extent as the Indebtedness being Refinanced; provided
further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.

          “Related Business” means any Oil and Gas Business in which the Company or any of the
Restricted Subsidiaries was engaged on the Issue Date and any business related, ancillary or
complementary to such business.

          “Restricted Payment” with respect to any Person means:

     (1) the declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in respect of its Capital Stock in
connection with any merger or consolidation involving such Person) or similar payment to
the direct or indirect holders of its Capital Stock (other than (A) dividends or
distributions payable solely in its Capital Stock (other than Disqualified Stock), (B)
dividends or distributions payable solely to the
Company or a Restricted Subsidiary and (C) pro rata dividends or other
distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an
entity other than a corporation));

     (2) the purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value of any Capital Stock of the Company held by any Person (other than by
a Restricted Subsidiary) or of any Capital Stock of a Restricted

32

 

Subsidiary held by any
Affiliate of the Company (other than by a Restricted Subsidiary), including in connection
with any merger or consolidation and including the exercise of any option to exchange any
Capital Stock (other than into Capital Stock of the Company that is not Disqualified
Stock);

     (3) the purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment of any Subordinated Obligations of the Company or of any Subsidiary Guarantor
(other than the purchase, repurchase, redemption, defeasance or other acquisition or
retirement of (A) Indebtedness owed to the Company or a Restricted Subsidiary and Incurred
pursuant to Section 4.03(b)(2) or (B) Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of such purchase, repurchase, redemption, defeasance or
other acquisition or retirement); or

     (4) the making of any Investment (other than a Permitted Investment) in any Person.

          “Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted
Subsidiary.

          “Sale/Leaseback Transaction” means an arrangement relating to property owned by the Company or
a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a Restricted
Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and
the Company or a Restricted Subsidiary leases it from such Person.

          “SEC” means the U.S. Securities and Exchange Commission.

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

          “Senior Indebtedness” means with respect to any Person:

     (1) Indebtedness of such Person, whether outstanding on the Issue Date or thereafter
Incurred; and

     (2) all other Obligations of such Person (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to such Person whether
or not post-filing interest is allowed in such proceeding) in respect of Indebtedness
described in clause (1) above

unless, in the case of clauses (1) and (2), in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such Indebtedness or other
obligations are subordinate in right of payment to the Securities or the Subsidiary Guaranty of
such Person, as the case may be; provided, however, that Senior Indebtedness shall
not include:

33

 

     (A) any obligation of such Person to the Company or any Subsidiary;

     (B) any liability for Federal, state, local or other taxes owed or owing by
such Person;

     (C) any accounts payable or other liability to trade creditors arising in the
ordinary course of business;

     (D) any Indebtedness or other Obligation of such Person which is subordinate
or junior in right of payment to any other Indebtedness or other Obligation of such
Person; or

     (E) that portion of any Indebtedness which at the time of Incurrence is
Incurred in violation of the Indenture.

          “Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant
Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the
SEC.

          “Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.,
and any successor to its rating agency business.

          “Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the final payment of principal of such security is due and payable,
including pursuant to any mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).

          “Subordinated Obligation” means, with respect to a Person, any Indebtedness of such Person
(whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in
right of payment to the Securities or a Subsidiary Guaranty of such Person, as the case may be,
pursuant to a written agreement to that effect.

          “Subsidiary” means, with respect to any Person, any corporation, association, partnership or
other business entity of which more than 50% of the total voting power of shares of Voting Stock is
at the time owned or controlled, directly or indirectly, by:

     (1) such Person;

     (2) such Person and one or more Subsidiaries of such Person; or

     (3) one or more Subsidiaries of such Person.

34

 

          “Subsidiary Guarantor” means each Restricted Subsidiary of the Company that executes the
Indenture as a guarantor on the Issue Date and each other Restricted Subsidiary of the Company that
thereafter guarantees the Securities pursuant to the terms of the Indenture.

          “Subsidiary Guaranty” means a Guarantee by a Subsidiary Guarantor of the Company’s obligations
with respect to the Securities.

          “Temporary Cash Investments” means any of the following:

     (1) any investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed by the United States of America or any agency thereof;

     (2) investments in demand and time deposit accounts, certificates of deposit and money
market deposits maturing within 270 days of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United States of America,
any State thereof or any foreign country recognized by the United States of America, and
which bank or trust company has capital, surplus and undivided profits aggregating in
excess of $50.0 million (or the foreign currency equivalent thereof) and has outstanding
debt which is rated “A” (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual
fund distributor;

     (3) repurchase obligations with a term of not more than 180 days for underlying
securities of the types described in clause (1) above entered into with a bank meeting the
qualifications described in clause (2) above;

     (4) investments in commercial paper, maturing not more than 180 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America or any foreign country
recognized by the United States of America with a rating at the time as of which any
investment therein is made of “P-1” (or
higher) according to Moody’s or “A-1” (or higher) according to Standard and Poor’s;

     (5) investments in securities with maturities of nine months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority thereof, and
rated at least “A” by Standard & Poor’s or “A” by Moody’s; and

     (6) investments in money market funds that invest substantially all their assets in
securities of the types described in clauses (1) through (5) above.

35

 

          “Trustee” means The Bank of New York Mellon Trust Company, N.A. until a successor
replaces it and, thereafter, means the successor.

          “Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§
77aaa-77bbbb) as in effect on the Issue Date.

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

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

          “Unrestricted Subsidiary” means:

     (1) PetroQuest Oil & Gas L.L.C. and any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below; and

     (2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary but excluding PetroQuest L.L.C.) to be an Unrestricted Subsidiary unless
such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any
Lien on any property of, the Company or any other Subsidiary of the Company that is not a
Subsidiary of the Subsidiary to be so designated; provided, however, that either
(A) the Subsidiary to be so designated has total assets of $1,000 or less or (B) if such Subsidiary
has assets greater than $1,000, such designation would be permitted under Section 4.04.

          The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (A) the Company could Incur $1.00 of additional Indebtedness under Section 4.03(a) and
(B) no Default shall have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the foregoing provisions.

          “U.S. Government Obligations” means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer’s option.

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

36

 

          “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding
and normally entitled (without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof.

          “Wholly Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other
than directors’ qualifying shares) is owned by the Company or one or more other Wholly Owned
Subsidiaries.

          SECTION 1.04. Other Definitions.

	 	 	 	 	 
	 	 	Defined in	 
	Term	 	Section	 
	“Affiliate Transaction”
	 	 	4.07	(a)
	“Appendix”
	 	 	2.01	 
	“Bankruptcy Law”
	 	 	6.01	 
	“Change of Control Offer”
	 	 	4.08	(b)
	“covenant defeasance option”
	 	 	8.01	(b)
	“Custodian”
	 	 	6.01	 
	“Event of Default”
	 	 	6.01	 
	“Guaranteed Obligations”
	 	 	10.01	 
	“Initial Lien”
	 	 	4.09	 
	“legal defeasance option”
	 	 	8.01	(b)
	“Offer”
	 	 	4.06	(b)
	“Offer Amount”
	 	 	4.06	(d)(2)
	“Offer Period”
	 	 	4.06	(d)(2)
	“Paying Agent”
	 	 	2.03	 
	“Purchase Date”
	 	 	4.06	(d)(1)
	“Registrar”
	 	 	2.03	 
	“Successor Company”
	 	 	5.01	(a)(1)

          SECTION 1.05. Incorporation by Reference of Trust Indenture Act. The Indenture is
subject to the mandatory provisions of the TIA which are incorporated by reference in and made a
part of the Indenture. The following TIA terms have the following meanings:

          “Commission” means the SEC;

          “indenture securities” means the Securities and the Subsidiary Guarantees;

          “indenture security holder” means a Securityholder;

          “indenture to be qualified” means the Indenture;

          “indenture trustee” or “institutional trustee” means the Trustee; and

          “obligor” on the Securities means the Company, each Subsidiary Guarantor and any other obligor
on the Securities.

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

          SECTION 1.06. Rules of Construction. Unless the context otherwise requires:

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

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

     (3) “or” is not exclusive;

     (4) “including” means including without limitation;

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

     (6) unsecured Indebtedness shall not be deemed to be subordinate or junior to secured
Indebtedness merely by virtue of its nature as unsecured Indebtedness;

     (7) secured Indebtedness shall not be deemed to be subordinate or junior to any other
secured Indebtedness merely because it has a junior priority with respect to the same
collateral;

     (8) the principal amount of any noninterest bearing or other discount security at any
date shall be the principal amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP;

     (9) the principal amount of any Preferred Stock shall be (A) the maximum liquidation
value of such Preferred Stock or (B) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock, whichever is greater; and

     (10) all references to the date the Securities were originally issued shall refer to
the Issue Date.

ARTICLE 2

The Securities

          SECTION 2.01. Form and Dating. Certain provisions relating to the Securities are set
forth in the Appendix attached hereto (the “Appendix”), which is hereby incorporated in, and
expressly made a part of, the Indenture. The Securities issued on the Issue Date and any
Additional Securities shall be treated as a single class

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for all purposes under the Indenture, including waivers, amendments, redemptions and offers to purchase. The Securities and the
Trustee’s certificate of authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in, and expressly made a part of, the Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in
a form acceptable to the Company). Each Security shall be dated the date of its authentication.
The Securities shall be in denominations of $1,000 and any integral multiple of $1,000.

          SECTION 2.02. 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
Trustee authenticates the Security, the Security shall be valid nevertheless.

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

          The Trustee shall, upon written direction of the Company, authenticate and make available for
delivery Securities as set forth in the Appendix.

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

          SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an office or
agency where Securities may be presented for registration of transfer or for exchange (the
“Registrar”) and an office or agency where Securities may be presented for payment (the “Paying
Agent”). The Registrar shall keep a register of the Securities and of their transfer and exchange.
The Company may have one or more co-registrars and one or more additional paying agents. The term
“Paying Agent” includes any additional paying agent.

          The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent
or co-registrar not a party to the Indenture, which shall incorporate the terms of the TIA. The
agreement shall implement the provisions of the Indenture that relate to such agent. The Company
shall notify the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or any Wholly Owned
Subsidiary incorporated or organized within The United States of America may act as Paying Agent,
Registrar, co-registrar or transfer agent.

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          The Company initially appoints the Trustee as Registrar and Paying Agent in connection with
the Securities.

          SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due date of the
principal and interest on any Security, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust
for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and shall notify the Trustee of any default
by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.

          SECTION 2.05. Securityholder 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
Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in
writing at least five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.

          SECTION 2.06. Transfer and Exchange. The Securities shall be issued in registered
form and shall be transferable only upon the surrender of a Security for registration of transfer
in compliance with the Appendix. When a Security is presented to the Registrar or a co-registrar
with a request to register a transfer, the Registrar shall register the transfer as requested if
the requirements of the Indenture and Section 8-401(a) of the Uniform Commercial Code are met.
When Securities are presented to the Registrar or a co-registrar with a request to exchange them
for an equal principal amount of Securities of other denominations, the Registrar shall make the
exchange as requested if the same requirements are met. To permit registration of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate Securities at the
Registrar’s or co-registrar’s request. The Company may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer pursuant to Sections 3.06, 4.08 and 9.05).
The Company shall not be required to make and the Registrar need not register transfers or
exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed
in part, the portion thereof not to be redeemed) or any Securities for a period of 15 days before a
selection of Securities to be redeemed or 15 days before an interest payment date.

          Prior to the due presentation for registration of transfer of any Security, the Company, the
Subsidiary Guarantors, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem
and treat the person in whose name a Security is registered as

40

 

the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the
Subsidiary Guarantors, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.

          SECTION 2.07. Replacement Securities. If a mutilated Security is surrendered to the
Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security
if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder
satisfies any other reasonable requirements of the Company, the Subsidiary Guarantors and the
Trustee. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the Company, the Subsidiary
Guarantors, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which
any of them may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.

          Every replacement Security is an additional Obligation of the Company.

          SECTION 2.08. Outstanding Securities. Securities outstanding at any time are all
Securities authenticated by the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not outstanding. A Security does not cease to
be outstanding because the Company or an Affiliate of the Company holds the Security.

          If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the
Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a
protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code).

          If the Paying Agent segregates and holds in trust, in accordance with the Indenture, on a
redemption date or maturity date money sufficient to pay all principal and interest payable on that
date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest on them ceases to accrue.

          SECTION 2.09. Temporary Securities. Until Definitive Securities (as defined in the
Appendix) are ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of Definitive
Securities but may have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate
Definitive Securities and deliver them in exchange for temporary Securities.

          SECTION 2.10. Cancellation. The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent shall

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

          SECTION 2.11. Defaulted Interest. If the Company defaults in a payment of interest
on the Securities, the Company shall pay defaulted interest at the rate per annum shown on the
Security (plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are Securityholders on a
subsequent special record date. The Company shall fix or cause to be fixed any such special record
date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.

          SECTION 2.12. CUSIP Numbers, ISINs, etc. The Company in issuing the Securities may
use “CUSIP” numbers, ISINs and “Common Code” numbers (in each case if then generally in use) and,
if so, the Trustee shall use “CUSIP” numbers, ISINs and “Common Code” numbers in notices of
redemption as a convenience to Holders; provided, however, that any such notice may
state that no representation is made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company shall advise the Trustee in
writing of any change in any “CUSIP” numbers, ISINs or “Common Code” numbers applicable to the
Securities.

          SECTION 2.13. Issuance of Additional Securities. After the Issue Date, the Company
shall be entitled, subject to its compliance with Section 4.03, to issue Additional Securities under the Indenture, which Securities shall have identical terms as the
Securities issued on the Issue Date, other than with respect to the date of issuance and issue
price. All the Securities issued under the Indenture shall be treated as a single class for all
purposes of the Indenture including waivers, amendments, redemptions and offers to purchase.

          With respect to any Additional Securities, the Company shall set forth in resolutions of the
Board of Directors and an Officers’ Certificate, a copy of each which shall be delivered to the
Trustee, the following information:

     (1) the aggregate principal amount of such Additional Securities to be authenticated
and delivered pursuant to the Indenture and the provision of Section 4.03 that the Company
is relying on to issue such Additional Securities; and

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     (2) the issue price, the issue date and the CUSIP number of such Additional
Securities; provided, however, that no Additional Securities may be issued
at a price that would cause such Additional Securities to have “original issue discount”
within the meaning of Section 1273 of the Code.

ARTICLE 3

Redemption

          SECTION 3.01. Notices to Trustee. If the Company elects to redeem Securities
pursuant to paragraph 5 of the Securities, the Company shall notify the Trustee in writing of the
redemption date, the principal amount of Securities to be redeemed and the paragraph of the
Securities pursuant to which the redemption will occur.

          The Company shall give the notice to the Trustee provided for in this Section at least 35 days
before the redemption date unless the Trustee consents to a shorter period. Such notice shall be
accompanied by an Officers’ Certificate and an Opinion of Counsel from the Company to the effect
that such redemption will comply with the conditions herein.

          SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than all the
Securities are to be redeemed, the Trustee shall select the Securities to be redeemed pro
rata to the extent practicable. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. Securities and portions of them the Trustee
selects shall be in principal amounts of $1,000 or a whole multiple of $1,000. Provisions of the
Indenture that apply to Securities called for redemption also apply to portions of Securities
called for redemption. The Trustee shall notify the Company promptly of the Securities or portions
of Securities to be redeemed.

          SECTION 3.03. Notice of Redemption. At least 30 days but not more than 60 days
before a date for redemption of Securities, the Company shall mail a notice
of redemption by first-class mail to each Holder of Securities to be redeemed at such Holder’s
registered address.

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

     (1) the redemption date;

     (2) the redemption price;

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

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

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

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

     (7) the “CUSIP” number, ISIN or “Common Code” number, if any, printed on the
Securities being redeemed; and

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

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

          SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed,
Securities called for redemption become due and payable on the redemption date and at the
redemption price stated in the notice and from and after such redemption date (unless the Company
defaults in the payment of the redemption price and accrued and unpaid interest), such Securities
will cease to bear interest. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to receive interest due on
the related interest payment date), and such Securities shall be canceled by the Trustee. Failure
to give notice or any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.

          SECTION 3.05. Deposit of Redemption Price. Prior to the redemption date, the Company
shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date
other than Securities or portions of Securities called for redemption which have been delivered by
the Company to the Trustee for cancellation.

          SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is
redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at
the Company’s expense) a new Security equal in principal amount to the unredeemed portion of the
Security surrendered.

ARTICLE 4

Covenants

          SECTION 4.01. Payment of Securities. The Company shall pay the principal of and
interest on the Securities on the dates and in the manner provided in the Securities and in the
Indenture. Principal and interest shall be considered paid on the date due if on such date the
Trustee or the Paying Agent holds in accordance with the

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Indenture money in immediately available funds sufficient to pay all principal and interest then due.

          The Company shall pay interest on overdue principal at the rate specified therefor in the
Securities, and it shall pay interest on overdue installments of interest at the same rate to the
extent lawful.

          SECTION 4.02. SEC Reports. Whether the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC
(subject to the next sentence) and provide the Trustee and Securityholders with such annual and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a
U.S. Person subject to such Sections, such reports to be so filed and provided at the times
specified for the filings of such reports with respect to an accelerated filer under such Sections
and containing all the information, audit reports and exhibits required for such reports. If at
any time, the Company is not subject to the periodic reporting requirements of the Exchange Act for
any reason, the Company shall nevertheless continue filing the reports specified in the preceding
sentence with the SEC within the time periods required with respect to a non-accelerated filer
unless the SEC shall not accept such a filing. The Company agrees that it shall not take any
action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the
foregoing, the SEC shall not accept such filings for any reason, the Company shall post the reports
specified in the preceding sentence on the Company’s website within the time periods with respect
to a non-accelerated filer that would apply if the Company was required to file those reports with
the SEC.

          At any time that any of the Company’s Subsidiaries are Unrestricted Subsidiaries, then, unless
the operations, assets, liabilities and cash flows of the Unrestricted Subsidiaries are, in
aggregate, immaterial, the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes thereto, and in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of the
financial condition and results of operations of the Company and its Restricted Subsidiaries
separate from the financial condition and results of operations of the Unrestricted Subsidiaries of
the Company.

          The availability of the foregoing materials on the SEC website or the Company’s website shall
be deemed to satisfy the foregoing delivery obligation.

          Delivery of such materials to the Trustee is for informational purposes only, and the
Trustee’s receipt of such materials shall not constitute notice or constructive notice to the
Trustee of the contents thereof.

          SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not, and shall not
permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company and the Subsidiary Guarantors shall be entitled
to Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto on a
pro forma basis, the Consolidated Coverage Ratio exceeds 2.5 to 1.

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          (b) Notwithstanding Section 4.03(a), the Company and the Restricted Subsidiaries shall be
entitled to Incur any or all of the following Indebtedness:

     (1) Indebtedness Incurred by the Company and Subsidiary Guarantors pursuant to any
Credit Agreement; provided, however, that, immediately after giving effect
to any such Incurrence, the aggregate amount of all Indebtedness Incurred under this clause
(1) and then outstanding does not exceed the greater of (A) $100.0 million less the
sum of all principal payments after the Issue Date with respect to such Indebtedness
pursuant to Section 4.06(a)(3)(A) and (B) 30% of ACNTA;

     (2) Indebtedness owed to and held by the Company or a Restricted Subsidiary;
provided, however, that (A) any subsequent issuance or transfer of any
Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or a
Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the obligor thereon, (B) if the Company is the obligor on such Indebtedness
and the holder of such Indebtedness is neither the Company nor a Subsidiary Guarantor, such
Indebtedness is expressly subordinated in right of payment to all obligations with respect
to the Securities, and (C) if a Subsidiary Guarantor is the obligor on such Indebtedness
and the holder of such Indebtedness is neither the Company nor a Subsidiary Guarantor, such
Indebtedness is expressly subordinated in right of payment to all obligations of such
Subsidiary Guarantor with respect to its Subsidiary Guaranty; provided further,
however, that nothing in the foregoing clauses (B) or (C) shall
prohibit the repayment of such Indebtedness at maturity or otherwise in compliance
with the terms of the Indenture;

     (3) the Securities (other than any Additional Securities);

     (4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in
Section 4.03(b) (1), (2) or (3));

     (5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to
the date on which such Subsidiary was acquired by the Company (other than Indebtedness
Incurred in connection with, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related transactions pursuant
to which such Subsidiary became a Subsidiary or was acquired by the Company);
provided, however, that on the date of such acquisition and after giving
pro forma effect thereto and any related financing transactions, either (A)
the Company would have been entitled to Incur at least $1.00 of additional Indebtedness
pursuant to Section 4.03(a) or (B) the Consolidated Coverage Ratio is equal to or greater
than the Consolidated Coverage Ratio immediately before such transaction;

     (6) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to Section
4.03(a) or pursuant to Section 4.03(b)(3), (4), (5) or this

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Section 4.03(b)(6); provided, however, that to the extent such Refinancing Indebtedness
directly or indirectly Refinances Indebtedness of a Subsidiary Incurred pursuant to
4.03(b)(5), such Refinancing Indebtedness shall be Incurred only by such Subsidiary, by the
Company or by the Company and such Subsidiary;

     (7) Hedging Obligations consisting of Interest Rate Agreements directly related to
Indebtedness permitted to be Incurred by the Company and the Restricted Subsidiaries
pursuant to the Indenture;

     (8) Hedging Obligations consisting of Oil and Gas Hedging Contracts and Currency
Agreements entered into in the ordinary course of business for the purpose of limiting
risks that arise in the ordinary course of business of the Company and its Restricted
Subsidiaries;

     (9) obligations in respect of completion, performance, bid and surety bonds and
completion guarantees, insurance obligations or bonds and other similar bonds and
obligations provided by the Company or any Restricted Subsidiary in the ordinary course of
business or letters of credit providing support for any such bonds, guarantees or
obligations;

     (10) Capital Lease Obligations and other purchase money Indebtedness in an aggregate
principal amount at any time outstanding of not to exceed the greater of (A) $10.0 million
and (B) 2.5% of ACNTA;

     (11) Non-Recourse Purchase Money Indebtedness;

     (12) Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is
extinguished promptly following its Incurrence;

     (13) Indebtedness consisting of the Subsidiary Guaranty of a Subsidiary Guarantor and
any Guarantee by the Company or a Subsidiary Guarantor of Indebtedness Incurred pursuant to
Section 4.03(b)(3), (4), (7), (8), (9) or (10) or pursuant to Section 4.03(b)(6) to the
extent the Refinancing Indebtedness Incurred thereunder directly or indirectly Refinances
Indebtedness Incurred pursuant to Section 4.03(a) or pursuant to Section 4.03(b)(3) or (4);

     (14) In-kind obligations relating to oil and gas balancing obligations arising in the
ordinary course of business; and

     (15) Indebtedness of the Company or of any of its Subsidiary Guarantors in an
aggregate principal amount which, when taken together with all other Indebtedness of the
Company and its Subsidiary Guarantors outstanding on the date of such Incurrence (other
than Indebtedness permitted by Section 4.03(b)(1) through (14) above or Section 4.03(a))
does not exceed the greater of (A) $20.0 million and (B) 5.0% of ACNTA.

47

 

          (c) Notwithstanding Section 4.03(b), neither the Company nor any Subsidiary Guarantor
shall Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations of the Company or any
Subsidiary Guarantor unless such Indebtedness shall be subordinated to the Securities or the
applicable Subsidiary Guaranty to at least the same extent as such Subordinated Obligations.

          (d) For purposes of determining compliance with this Section 4.03:

     (1) in the event an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness described in Section 4.03(a) and (b), the Company, in its sole
discretion, shall be permitted to divide and classify such item of Indebtedness on the date
of Incurrence and, subject to Section 4.03(d)(2) shall be entitled to later classify,
reclassify or redivide all or a portion of such item of Indebtedness, in any manner that
complies with this Section 4.03; and

     (2) any Indebtedness remaining outstanding under the Credit Agreement after the
application of the net proceeds from the sale of the Securities on the Issue Date will be
treated as incurred on the Issue Date under Section 4.03(b)(1).

          SECTION 4.04. Limitation on Restricted Payments. (a) The Company shall not, and
shall not permit any Restricted Subsidiary, directly or indirectly, to make a
Restricted Payment if at the time the Company or such Restricted Subsidiary makes such
Restricted Payment:

     (1) a Default shall have occurred and be continuing (or would result therefrom);

     (2) the Company is not entitled to Incur an additional $1.00 of Indebtedness pursuant
to Section 4.03(a); or

     (3) the aggregate amount of such Restricted Payment and all other Restricted Payments
since the Issue Date would exceed the sum of (without duplication):

     (A) 50% of the Consolidated Net Income accrued during the period (treated as
one accounting period) from July 1, 2010 to the end of the most recent fiscal
quarter for which internal financial statements of the Company are available at the
time of determination (or, in case such Consolidated Net Income shall be a deficit,
minus 100% of such deficit); plus

     (B) 100% of the aggregate Net Cash Proceeds and 100% of the Fair Market Value
of securities or other property other than cash (including Capital Stock of Persons
engaged in the Oil and Gas Business that become Restricted Subsidiaries or assets
used in the Oil and Gas Business) received by the Company or any Restricted
Subsidiary subsequent to the Issue Date from the issue or sale of Capital Stock of
the

48

 

Company (other than Disqualified Stock), other than Capital Stock sold to a
Subsidiary of the Company and other than an issuance or sale to an Employee Stock
Purchase Plan; plus

     (C) 100% of the aggregate Net Cash Proceeds received by the Company subsequent
to the Issue Date from the issue or sale of any Capital Stock of the Company (other
than Disqualified Stock) to an Employee Stock Purchase Plan; provided,
however, that if an Employee Stock Purchase Plan Incurs any Indebtedness to
finance the purchase of such Capital Stock, such aggregate amount shall be limited
to the excess of such Net Cash Proceeds over the amount of such Indebtedness
plus an amount equal to any increase in the Consolidated Net Worth of the
Company resulting from principal repayments made by an Employee Stock Purchase Plan
with respect to such Indebtedness after the Issue Date; plus

     (D) the amount by which Indebtedness is reduced on the Company’s consolidated
balance sheet upon the conversion or exchange (other than by a Subsidiary of the
Company) subsequent to the Issue Date of any Indebtedness convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the Company (plus the amount of any
accrued interest then outstanding on such Indebtedness to the extent the obligation
to pay such interest is extinguished less the amount of any cash, or the
Fair Market Value of any property, distributed by the Company upon such conversion
or exchange); provided, however, that the foregoing amount shall
not exceed the Net Cash Proceeds received by the Company or any Restricted
Subsidiary from the sale of such Indebtedness (excluding Net Cash Proceeds from
sales to a Subsidiary of the Company or to an Employee Stock Purchase Plan);
plus

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

49

 

excess has not been and shall not be taken into account in one of the
foregoing clauses (A)-(D).

(b) Section 4.04(a) shall not prohibit:

     (1) the making of any Restricted Payment (including a dividend) within 60 days after
the date the Company or Restricted Subsidiary became legally or contractually obligated to
make such Restricted Payment (including the declaration of a dividend), if at the date of
becoming so legally or contractually bound, such Restricted Payment would have complied
with the provisions of the Indenture (and such Restricted Payment shall be deemed to be
made on the date of becoming so legally or contractually bound for purposes of any
calculation required by this Section 4.04); provided, however, that such
Restricted Payments shall be included (without duplication) in the calculation of the
amount of Restricted Payments unless otherwise excluded pursuant to Section 4.04(b)(2)-(8);

     (2) the making of any Restricted Payment in exchange for, or out of the Net Cash
Proceeds of the substantially concurrent sale (other than to a Subsidiary
of the Company) of, Capital Stock of the Company (other than Disqualified Stock);
provided, however, that the amount of any such Net Cash Proceeds that are
utilized for any such Restricted Payment shall be excluded (A) from Section 4.04(a)(3)(B)
and (C) and (B) in the calculation of the amount of Restricted Payments;

     (3) the defeasance, redemption, repurchase, retirement or other acquisition of any
Subordinated Obligations of the Company or of any Subsidiary Guarantor with the Net Cash
Proceeds from an Incurrence of any Subordinated Obligations permitted to be Incurred under
Section 4.03; provided, however, that such defeasance, redemption,
repurchase, retirement or other acquisition shall be excluded in the calculation of
Restricted Payments;

     (4) so long as no Default has occurred and is continuing, the repurchase, redemption
or other acquisition or retirement for value of any Capital Stock of the Company or any
Restricted Subsidiary of the Company held by any employees, former employees, directors or
former directors of Company or any of its Restricted Subsidiaries (or heirs, estates or
other permitted transferees of such employees or directors) pursuant to any agreements
(including employment agreements), management equity subscription agreement or stock option
agreements or plans (or amendments thereto), approved by the Board of Directors, under
which such individuals purchase or sell or are granted the right to purchase or sell shares
of Capital Stock; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Capital Stock shall not exceed $2.0 million in any calendar
year (with any unused amounts in any calendar year being carried over to succeeding
calendar years); provided further, that such amount in any calendar year
may be increased by an amount not to exceed (A) the cash proceeds received by the Company
from the sale of Capital Stock (other than

50

 

Disqualified Stock) of the Company to members of management or directors of the Company and its Restricted Subsidiaries that occurs after
the Issue Date (to the extent the cash proceeds from the sale of such Capital Stock have
not otherwise been applied to the payment of Restricted Payments by virtue of Section
4.04(a)(3), plus (B) the cash proceeds of key man life insurance policies received
by the Company and its Restricted Subsidiaries after the Issue Date, less (C) the
amount of any Restricted Payments made after the Issue Date pursuant to clauses (A) and (B)
of this Section 4.04(b)(4); provided further, however, that such
repurchase, redemption or other acquisition or retirement for value shall be excluded in
the calculation of the amount of Restricted Payments;

     (5) repurchases or other acquisitions for value of Capital Stock deemed to occur upon
the exercise or exchange of stock options, warrants or other convertible securities or upon
the vesting of restricted Capital Stock if such Capital Stock represents a portion of the
exercise or exchange price thereof or made in lieu of withholding taxes in connection with
any such exercise, exchange or vesting; provided, however, that such repurchases or other
acquisitions for value shall be excluded in the calculation of the amount of Restricted
Payments;

     (6) so long as no Default has occurred and is continuing, upon the occurrence of a
Change of Control or an Asset Disposition and within 60 days after the completion of the
offer to repurchase the Securities under Section 4.08 or Section 4.06 (including the
purchase of all Securities tendered), any purchase, repurchase, redemption, defeasance,
acquisition or other retirement for value of Subordinated Obligations required under the
terms thereof as a result of such Change of Control or Asset Disposition at a purchase or
redemption price not to exceed 101% of the outstanding principal amount thereof,
plus accrued and unpaid interest thereon, if any; provided,
however, that such purchase, repurchase, redemption, defeasance, acquisition or
other retirement for value shall be excluded in the calculation of the amount of Restricted
Payments;

     (7) so long as no Default has occurred and is continuing, the purchase by the Company
of fractional shares arising out of stock dividends, splits or business combinations;
provided, however, that such purchases shall be excluded in the calculation
of the amount of Restricted Payments;

     (8) the declaration and payments of dividends on Disqualified Stock issued pursuant to
Section 4.03; provided, however, that at the time of declaration of such
dividend, no Default shall have occurred and be continuing (or result therefrom);
provided further, however, that such dividends shall be excluded in the
calculation of the amount of Restricted Payments; or

     (9) so long as no Default has occurred and is continuing, the declaration and payment
of regularly scheduled dividends paid in cash on the Convertible Preferred Stock in
accordance with the certificate of designations as in effect on the Issue Date in an amount
not to exceed $5,140,000 in any calendar year;

51

 

provided, however, that the amount of such dividends shall be included in the calculation of the amount of Restricted
Payments; or

     (10) Restricted Payments in an amount not to exceed $10.0 million in the aggregate at
any time outstanding; provided, however, that the amount of such Restricted Payments shall
be included in the calculation of the amount of Restricted Payments.

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

          For purposes of determining compliance with this Section 4.04, if a Restricted Payment meets
the criteria of more than one of the types of Restricted Payments described in Section
4.04(b)(1)-(10), the Company, in its sole discretion, shall be entitled to divide, order and classify such Restricted Payment in any manner in compliance
with this Section 4.04 and shall be entitled to later redivide, reorder and reclassify such
Restricted Payment in any manner that then complies with this Section 4.04.

          In computing Consolidated Net Income under Section 4.04(a)(3)(A) above, (1) the Company shall
use audited financial statements for the portions of the relevant period for which audited
financial statements are available on the date of determination and unaudited financial statements
and other current financial data based on the books and records of the Company for the remaining
portion of such period and (2) the Company shall be permitted to rely in good faith on the
financial statements and other financial data derived from the books and records of the Company
that are available on the date of determination.

          SECTION 4.05. Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any Restricted Subsidiary to, create
or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to the
Company (it being understood that the priority of any Preferred Stock in receiving dividends or
liquidating distributions prior to dividends or liquidating distributions being paid on Capital
Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock), (b)
make any loans or advances to the Company or any Restricted Subsidiary (it being understood that
the subordination of loans or advances made to the Company or any Restricted Subsidiary to other
Indebtedness Incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction
on the ability to make loans or advances) or (c) transfer any of its property or assets to the
Company or any Restricted Subsidiary, except:

          (1) with respect to clauses (a), (b) and (c),

52

 

     (A) any encumbrance or restriction pursuant to an agreement (including the
Credit Agreement) in effect at or entered into on the Issue Date;

     (B) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement relating to any Indebtedness Incurred by such Restricted
Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired
by the Company (other than Indebtedness Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Company) and
outstanding on such date;

     (C) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause
(A), (B) or (I) of clause (1) of this Section 4.05 or this clause (C) or contained
in any amendment to an agreement referred to in clause (A), (B) or (I) of clause
(1) of this Section 4.05 or this clause (C); provided, however,
that the encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such refinancing agreement or amendment are not materially less
favorable, taken as a whole, to the Securityholders than encumbrances and
restrictions with respect to such Restricted Subsidiary contained in such
predecessor agreements;

     (D) any encumbrance or restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or disposition of
Capital Stock or assets of such Restricted Subsidiary pending the closing of such
sale or disposition;

     (E) any encumbrance or restriction on the disposition or distribution of
assets or property, including cash or other deposits, under agreements entered into
in the ordinary course of the Oil and Gas Business of the types described in clause
(2) of the definition of Permitted Business Investments;

     (F) encumbrances and restrictions contained in contracts entered into in the
ordinary course of business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of, or from the ability of
the Company and the Restricted Subsidiaries to realize the value of, property or
assets of the Company or any Restricted Subsidiary in any manner material to the
Company or any Restricted Subsidiary;

     (G) customary provisions in joint venture agreements and other similar
agreements (in each case relating solely to the respective joint

53

 

venture or similar entity or the equity interests therein) entered in the ordinary course of business;

     (H) restrictions on cash, cash equivalents, Temporary Cash Investments or
other deposits or net worth imposed under contracts entered into the ordinary
course of business, including such restrictions imposed by customers or insurance,
surety or bonding companies; and

     (I) encumbrances or restrictions contained in agreements governing
Indebtedness of the Company or any Restricted Subsidiary permitted to be Incurred
pursuant to an agreement entered into subsequent to the Issue Date in accordance
with Section 4.03; provided that the provisions relating to such
encumbrance or restriction contained in such Indebtedness are not materially less
favorable to the Company taken as a whole, as determined by the Board of Directors of the Company in good faith,
than the provisions contained in the Credit Agreement or in the Indenture as in
effect on the Issue Date.

          (2) with respect to clause (c) only,

     (A) any encumbrance or restriction consisting of customary subletting,
nonassignment or transfer provisions in leases, licenses, similar agreements,
operating agreements or other agreements customary in the Oil and Gas Business to
the extent such provisions restrict the transfer of the lease, license or similar
agreement or the property subject thereto;

     (B) any encumbrance or restriction contained in security agreements or
mortgages securing Indebtedness to the extent such encumbrance or restriction
restricts the transfer of the property subject to such security agreements or
mortgages;

     (C) pursuant to customary provisions restricting dispositions of real property
interests set forth in any reciprocal easement agreements of the Company or any
Restricted Subsidiary; and

     (D) provisions with respect to the disposition or distribution of assets or
property in operating agreements, joint venture agreements, development agreements,
area of mutual interest agreements and other agreements that are customary in the
Oil and Gas Business and entered into in the ordinary course of business.

          SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate
any Asset Disposition unless:

     (1) the Company or such Restricted Subsidiary receives consideration at the time of
such Asset Disposition at least equal to the Fair Market Value of the shares and assets
subject to such Asset Disposition;

54

 

     (2) at least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash equivalents; and

     (3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted Subsidiary, as the case may be)

     (A) first, to the extent the Company elects (or is required by the
terms of any Indebtedness), to prepay, repay, redeem or purchase Senior
Indebtedness of the Company or of a Subsidiary Guarantor or any Indebtedness (other
than any Disqualified Stock) of any Restricted Subsidiary that is not a Subsidiary
Guarantor (in each case other than Indebtedness owed to the Company or an Affiliate
of the Company) within one year from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash;

     (B) second, to the extent of the balance of such Net Available Cash
after application in accordance with clause (A), to the extent the Company elects,
to acquire Additional Assets or to make capital expenditures in the Oil and Gas
Business within one year from the later of the date of such Asset Disposition or
the receipt of such Net Available Cash; and

     (C) third, to the extent of the balance of such Net Available Cash
after application in accordance with Section 4.06(a)(3)(A) and (B), to make an
offer to the holders of the Securities (and to holders of other Senior Indebtedness
of the Company or of a Subsidiary Guarantor designated by the Company) to purchase
Securities (and such other Senior Indebtedness of the Company or of a Subsidiary
Guarantor) pursuant to and subject to the conditions contained in the Indenture;
provided, however, that in connection with any prepayment,
repayment or purchase of Indebtedness pursuant to Section 4.06(a)(3)(A) or this
Section 4.06(a)(3)(C), the Company or such Restricted Subsidiary shall permanently
retire such Indebtedness and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid, repaid
or purchased.

               Notwithstanding the foregoing provisions of this Section, the Company and the Restricted
Subsidiaries shall not be required to apply any Net Available Cash in accordance with this
Section except to the extent that the aggregate Net Available Cash from all Asset Dispositions
which is not applied in accordance with this Section exceeds $10.0 million. Pending application of
Net Available Cash pursuant to this Section, the Company and the Restricted Subsidiaries shall be
entitled to temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any
manner not prohibited by the Indenture.

               For the purposes of this Section, the following are deemed to be cash or cash equivalents:

55

 

     (1) the assumption or discharge of Senior Indebtedness of the Company or of a
Subsidiary Guarantor (other than obligations in respect of Disqualified Stock of the
Company) or any Indebtedness of any Restricted Subsidiary that is not a Subsidiary
Guarantor (other than obligations in respect of Disqualified Stock of such Restricted
Subsidiary) and the release of the Company, Subsidiary Guarantor or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition; and

     (2) securities received by the Company or any Restricted Subsidiary from the
transferee that are promptly converted by the Company or such Restricted Subsidiary into
cash, to the extent of cash received in that conversion.

          (b) In the event of an Asset Disposition that requires the purchase of Securities (and
other Senior Indebtedness of the Company or of a Subsidiary Guarantor) pursuant to
Section 4.06(a)(3)(C), the Company shall purchase Securities tendered pursuant to an offer by
the Company for the Securities (and such other Senior Indebtedness) (the “Offer”) at a purchase
price of 100% of their principal amount (or, in the event such other Senior Indebtedness was
issued with significant original issue discount, 100% of the accreted value thereof) without
premium, plus accrued but unpaid interest (or, in respect of such other Senior
Indebtedness, such lesser price, if any, as may be provided for by the terms of such Senior
Indebtedness) in accordance with the procedures (including prorating in the event of
oversubscription) set forth in Section 4.06(d). If the aggregate purchase price of the
securities tendered exceeds the Net Available Cash allotted to their purchase, the Company
shall select the securities to be purchased on a pro rata basis but in round
denominations, which in the case of the Securities shall be denominations of $1,000 principal
amount or multiples thereof. The Company shall not be required to make such an offer to
purchase Securities pursuant to this Section if the Net Available Cash available therefor (and
for the purchase of such other Senior Indebtedness) is less than $10.0 million (which lesser
amount shall be carried forward for purposes of determining whether such an offer is required
with respect to the Net Available Cash from any subsequent Asset Disposition). Upon completion
of such an offer to purchase, Net Available Cash shall be deemed to be reduced by the aggregate
amount of such offer.

          (c) The requirement of Section 4.06(a)(3)(B) shall be deemed to be satisfied if an
agreement (including a lease, whether a capital lease or an operating lease) committing to make
the acquisitions or expenditures referred to therein is entered into by the Company or its
Restricted Subsidiary within the specified time period and such Net Available Cash is
subsequently applied in accordance with such agreement within six months following such
agreement.

          (d) (1) Promptly, and in any event within 10 days after the Company becomes obligated to
make an Offer, the Company shall deliver to the Trustee and send, by first-class mail to each
Holder, a written notice stating that the Holder may elect to have his Securities purchased by
the Company either in whole or in part (subject to prorating as described in Section 4.06(b) in
the event the Offer is

56

 

oversubscribed) in integral multiples of $1,000 of principal amount, at the applicable
purchase price. The notice shall specify a purchase date not less than 30 days nor more than
60 days after the date of such notice (the “Purchase Date”) and shall contain such information
concerning the business of the Company which the Company in good faith believes will enable
such Holders to make an informed decision and all instructions and materials necessary to
tender Securities pursuant to the Offer, together with the information contained in clause (3).

          (2) At least one day prior to the Purchase Date, the Company shall irrevocably deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as Paying Agent, segregate and
hold in trust) in Temporary Cash Investments, maturing on or before the last day prior to the
Purchase Date or on the Purchase Date if funds are immediately available by open of business, an
amount equal to the Offer Amount to be held for payment in accordance with the provisions of this
Section. If the Offer includes other Senior Indebtedness, the deposit described in the preceding
sentence may be made with any other paying agent pursuant to arrangements satisfactory to the
Trustee. Upon the expiration of the period for which the Offer remains open (the “Offer Period”),
the Company shall deliver to the Trustee for cancellation the Securities or portions thereof which
have been properly tendered to and are to be accepted by the Company. The Trustee shall, on the
Purchase Date, deliver payment (or cause the delivery of payment) to each tendering Holder in the
amount of the purchase price.

          (3) Holders electing to have a Security purchased shall be required to surrender the
Security, with an appropriate form duly completed, to the Company at the address specified in the
notice at least three Business Days prior to the Purchase Date. Holders shall be entitled to
withdraw their election if the Trustee or the Company receives not later than one Business Day
prior to the Purchase Date, a telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security purchased. Holders
whose Securities are purchased only in part shall be issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered.

          (e) The Company shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations in connection
with the repurchase of Securities pursuant to this Section. To the extent that the provisions
of any securities laws or regulations conflict with provisions of this Section, the Company
shall comply with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance with such
securities laws or regulations.

          SECTION 4.07. Limitation on Affiliate Transactions. (a) The Company shall not, and
shall not permit any Restricted Subsidiary to, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property, employee compensation
arrangements or the rendering of any service) with, or for the benefit of, any Affiliate of the
Company (an “Affiliate Transaction”) unless:

57

 

     (1) the terms of the Affiliate Transaction are not materially less favorable to the
Company or such Restricted Subsidiary than those that could reasonably be expected to be
obtained at the time of the Affiliate Transaction in arm’s-length dealings with a Person
who is not an Affiliate;

     (2) if such Affiliate Transaction involves an amount in excess of $10.0 million, the
terms of the Affiliate Transaction are set forth in writing and a majority of the directors
of the Company disinterested with respect to such Affiliate Transaction have determined in
good faith that the criteria set forth in clause (1) are satisfied and have approved the
relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors; and

     (3) if such Affiliate Transaction involves an amount in excess of $20.0 million, the
Board of Directors shall also have received a written opinion from an Independent Qualified
Party to the effect that such Affiliate Transaction is fair, from a financial standpoint,
to the Company and its Restricted Subsidiaries or is not materially less favorable to the
Company and its Restricted Subsidiaries than could reasonably be expected to be obtained at
the time in an arm’s-length transaction with a Person who was not an Affiliate.

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

     (1) any Investment (other than a Permitted Investment) or other Restricted Payment, in
each case permitted to be made pursuant to Section 4.04(a);

     (2) any employment agreement or other employee compensation plan or arrangement in
existence on the Issue Date or entered into thereafter in the ordinary course of business
including any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors;

     (3) loans or advances to employees in the ordinary course of business in accordance
with the past practices of the Company or its Restricted Subsidiaries, but in any event not
to exceed $1.0 million in the aggregate outstanding at any one time;

     (4) advances to or reimbursements of employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures, in each case in the ordinary course of
business of the Company or any of its Restricted Subsidiaries;

     (5) the payment of reasonable compensation and fees to directors of the Company and
its Restricted Subsidiaries who are not employees of the Company or its Restricted
Subsidiaries;

     (6) any transaction with the Company, a Restricted Subsidiary or joint venture or
similar entity (excluding an Unrestricted Subsidiary) which would not

58

 

constitute an Affiliate Transaction but for the Company’s or a Restricted Subsidiary’s
ownership of an equity interest in or control of such Restricted Subsidiary, joint venture
or similar entity;

     (7) indemnities of officers, directors and employees of the Company or any Restricted
Subsidiary consistent with applicable charter, by-law or statutory provisions;

     (8) the issuance or sale of any Capital Stock (other than Disqualified Stock) of the
Company or the receipt by the Company of a cash capital contribution from its stockholders;

     (9) any transaction with an Unrestricted Subsidiary to the extent such transaction is
in the ordinary course of business of the Company and its Restricted Subsidiaries and of
such Unrestricted Subsidiary;

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

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

     (12) any transaction with Affiliates pursuant to arrangements in existence on the
Issue Date pursuant to which those Affiliates own, or are entitled to acquire, working,
overriding royalty or other similar interests in particular properties operated by the
Company or any Restricted Subsidiary or in which any of the Company or one or more
Restricted Subsidiaries also own an interest.

            SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change of Control,
each Holder shall have the right to require that the Company purchase such Holder’s Securities at a
purchase price in cash equal to 101% of the principal amount thereof on the date of purchase
plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest on the relevant interest payment
date), in accordance with the terms contemplated in Section 4.08(b).

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          (b) Within 30 days following any Change of Control, unless the Company has previously or
concurrently exercised its right to redeem all of the Securities as described in Article 3 and
paragraph 5 of the Securities, the Company shall mail a notice to each Holder with a copy to
the Trustee (the “Change of Control Offer”) stating:

     (1) that a Change of Control has occurred and that such Holder has the right to
require the Company to purchase such Holder’s Securities at a purchase price in cash equal
to 101% of the principal amount thereof on the date of purchase, plus accrued and
unpaid interest, if any, to the date of purchase (subject to the right of Holders of record
on the relevant record date to receive interest on the relevant interest payment date) (the
“Change of Control Payment”);

     (2) a description of the transaction or transactions giving rise to such Change of
Control;

     (3) the purchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed); and

     (4) the instructions, as determined by the Company, consistent with this Section, that
a Holder must follow in order to have its Securities purchased.

          (c) Holders electing to have a Security purchased will be required to surrender the
Security, with an appropriate form duly completed, to the Company at the address specified in
the notice at least three Business Days prior to the purchase date. Holders will be entitled
to withdraw their election if the Trustee or the Company receives not later than one Business
Day prior to the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his election to have
such Security purchased.

          (d) On the purchase date, all Securities purchased by the Company under this Section
shall be delivered by the Company to the Trustee for cancellation, and the Company shall pay
the purchase price plus accrued and unpaid interest, if any, to the Holders entitled
thereto.

          (e) Notwithstanding the foregoing provisions of this Section, the Company shall not be
required to make a Change of Control Offer following a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.

          (f) A Change of Control Offer may be made in advance of a Change of Control, and
conditioned upon the occurrence of a Change of Control, if a

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definitive agreement is in place for the Change of Control at the time the Change of
Control Offer is made.

          (g) If Holders of not less than 90% in aggregate principal amount of the outstanding
Securities validly tender and do not withdraw such Securities in a Change of Control Offer and
the Company, or any third party making a Change of Control Offer in lieu of the Company as
described in Section 4.08(f), purchases all of the Securities validly tendered and not
withdrawn by such Holders, the Company will have the right, upon not less than 30 nor more than
60 days’ prior notice, given not more than 30 days following such purchase pursuant to the
Change of Control Offer described above, to redeem all Securities that remain outstanding
following such purchase at a redemption price in cash equal to the applicable Change of Control
Payment plus, to the extent not included in the Change of Control Payment, accrued and
unpaid interest, if any, to the date of redemption (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest payment date).

          (h) The Company shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations in connection
with the repurchase of Securities pursuant to this Section. To the extent that the provisions
of any securities laws or regulations conflict with provisions of this Section, the Company
shall comply with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance with such
securities laws or regulations.

          SECTION 4.09. Limitation on Liens. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien (the “Initial
Lien”) of any nature whatsoever on any of its properties (including Capital Stock of a Restricted
Subsidiary), whether owned at the Issue Date or thereafter acquired, securing any Indebtedness,
other than Permitted Liens, without effectively providing that the Securities shall be secured
equally and ratably with (or prior to) the obligations so secured for so long as such obligations
are so secured.

          Any Lien created for the benefit of the Holders of the Securities pursuant to the preceding
sentence shall provide by its terms that such Lien shall be automatically and unconditionally
released and discharged upon the release and discharge of the Initial Lien.

          SECTION 4.10. Limitation on Sale/Leaseback Transactions. The Company shall not, and
shall not permit any Restricted Subsidiary to, enter into any Sale/ Leaseback Transaction with
respect to any property unless:

     (1) the Company or such Restricted Subsidiary would be entitled to (A) Incur
Indebtedness in an amount equal to the Attributable Debt with respect to such
Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien on such property
securing such Attributable Debt without equally and ratably securing the Securities
pursuant to Section 4.09;

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     (2) the net proceeds received by the Company or any Restricted Subsidiary in
connection with such Sale/Leaseback Transaction are at least equal to the Fair Market Value
of such property; and

     (3) the Company applies the proceeds of such transaction in compliance with
Section 4.06.

          SECTION 4.11. Future Guarantors. The Company shall cause each domestic Restricted
Subsidiary that is not already a Subsidiary Guarantor that (A) guarantees any Indebtedness of the
Company or a Subsidiary Guarantor or (B) is a Wholly Owned Subsidiary and otherwise Incurs any
Indebtedness for borrowed money (other than Indebtedness owed to the Company or a Subsidiary
Guarantor) in an aggregate principal amount that exceeds $2.0 million, to, at the same time,
execute and deliver to the Trustee a Guaranty Agreement pursuant to which such Restricted
Subsidiary shall Guarantee payment of the Securities on the same terms and conditions as those set
forth in the Indenture.

          SECTION 4.12. Compliance Certificate. The Company shall deliver to the Trustee
within 120 days after the end of each fiscal year of the Company an Officers’ Certificate stating
that in the course of the performance by the signers of their duties as Officers of the Company
they would normally have knowledge of any Default and whether the signers know of any Default that
occurred during such fiscal year. If they do, the certificate shall describe the Default, its
status and what action the Company is taking or proposes to take with respect thereto. The Company
also shall comply with TIA § 314(a)(4), the certificate referred to in such section of the TIA to
be delivered to the Trustee within 120 days after the end of each fiscal year of the Company. For
purposes of this Section 4.12, the “fiscal year” of the Company means a calendar year ending
December 31.

          SECTION 4.13. Further Instruments and Acts. Upon request of the Trustee, the Company
will execute and deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of the Indenture.

ARTICLE 5

Successor Company

          SECTION 5.01. Merger and Consolidation. (a) The Company shall not consolidate with
or merge with or into, or convey, transfer or lease, in one transaction or a series of
transactions, directly or indirectly, all or substantially all its assets to, any Person, unless:

     (1) the resulting, surviving or transferee Person (the “Successor Company”) shall be a
Person organized and existing under the laws of the United States of America, any State
thereof or the District of Columbia and the Successor Company (if not an the Company) shall
expressly assume, by a supplemental

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indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee,
all the obligations of the Company under the Securities and the Indenture;

     (2) immediately after giving pro forma effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor Company or any
Subsidiary as a result of such transaction as having been Incurred by such Successor
Company or such Subsidiary at the time of such transaction), no Default shall have occurred
and be continuing;

     (3) immediately after giving pro forma effect to such transaction and
any related financing transactions, either (A) the Successor Company would be able to Incur
an additional $1.00 of Indebtedness pursuant to Section 4.03(a) or (B) the Consolidated
Coverage Ratio of the Successor Company is equal to or greater than the Consolidated
Coverage Ratio of the Company immediately before such transaction; and

     (4) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with the Indenture;

provided, however, that clause (3) shall not be applicable to (A) a Restricted
Subsidiary consolidating with, merging into or transferring all or part of its properties and
assets to the Company, (B) the Company merging with an Affiliate of the Company solely for the
purpose and with the sole effect of reincorporating the Company in another jurisdiction in the
United States or (C) as long as PetroQuest L.L.C. is at the time a Restricted Subsidiary of the
Company, the consolidation or merger of the Company with or into PetroQuest L.L.C. or the transfer
of all or part of the properties of the Company to PetroQuest L.L.C. so long as (if the Successor
Company is not itself, following the consummation of such transaction, a corporation) a corporation
that is a Subsidiary of PetroQuest L.L.C. shall become a co-obligor of the Securities and shall
have confirmed, by a supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the Securities and the
Indenture.

          For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other
disposition of all or substantially all of the properties and assets of one or more Subsidiaries of
the Company, which properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the Company on a
consolidated basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.

          The Successor Company shall be the successor to the Company and shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under the Indenture, and
the predecessor Company, except in the case of a lease, shall be released from the obligation to
pay the principal of and interest on the Securities.

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          (b) The Company shall not permit any Subsidiary Guarantor to consolidate with or merge
with or into, or convey, transfer or lease, in one transaction or a series of transactions, all
or substantially all of its assets to any Person unless:

     (1) the resulting, surviving or transferee Person (if not such Subsidiary) shall be a
Person organized and existing under the laws of the jurisdiction under which such
Subsidiary was organized or under the laws of the United States of America, or any State
thereof or the District of Columbia, and such Person (if not such Subsidiary Guarantor)
shall expressly assume, by a Guaranty Agreement, all the obligations of such Subsidiary,
under its Subsidiary Guaranty; provided, however, that the foregoing shall
not apply in the case of a Subsidiary Guarantor (x) that has been, or will be as a result
of the subject transaction, disposed of in its entirety to another Person (other than to
the Company or an Affiliate of the Company), whether through a merger, consolidation or
sale of Capital Stock or assets or (y) that, as a result of the disposition of all or a
portion of its Capital Stock, ceases to be a Subsidiary, in both cases, if in connection
therewith the Company provides an Officers’ Certificate to the Trustee to the effect that
the Company shall comply with its obligations under Section 4.06 in respect of such
disposition;

     (2) immediately after giving effect to such transaction or transactions on a
pro forma basis (and treating any Indebtedness which becomes an obligation
of the resulting, surviving or transferee Person as a result of such transaction as having
been issued by such Person at the time of such transaction), no Default shall have occurred
and be continuing; and

     (3) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such Guaranty
Agreement, if any, complies with the Indenture.

ARTICLE 6

Defaults and Remedies

          SECTION 6.01. Events of Default. An “Event of Default” occurs if:

     (1) the Company defaults in any payment of interest on any Security when the same
becomes due and payable, and such default continues for a period of 30 days;

     (2) the Company (A) defaults in the payment of the principal of any Security when the
same becomes due and payable at its Stated Maturity, upon optional redemption, upon
declaration of acceleration or otherwise, or (B) fails to purchase Securities when required
pursuant to the Indenture or the Securities;

     (3) the Company fails to comply with Section 5.01;

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     (4) the Company fails to comply with Section 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09,
4.10 or 4.11 (other than a failure to purchase Securities when required under Section 4.06
or 4.08) and such failure continues for 30 days after the notice specified below;

     (5) the Company or any Subsidiary Guarantor fails to comply with any of its agreements
contained in the Securities or the Indenture (other than those referred to in clause (1),
(2), (3) or (4) above) and such failure continues for 60 days (or 120 days in the case of a
failure to comply with the reporting obligations under Section 4.02) after the notice
specified below;

     (6) Indebtedness of the Company, any Subsidiary Guarantor or any Significant
Subsidiary is not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $10.0 million, or its foreign currency
equivalent at the time;

     (7) the Company, any Subsidiary Guarantor or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:

     (A) commences a voluntary case;

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

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

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

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

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

     (A) is for relief against the Company, any Subsidiary Guarantor or any
Significant Subsidiary in an involuntary case;

     (B) appoints a Custodian of the Company, any Subsidiary Guarantor or any
Significant Subsidiary or for any substantial part of its property; or

     (C) orders the winding up or liquidation of the Company, any Subsidiary
Guarantor or any Significant Subsidiary;

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

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     (9) any judgment or decree for the payment of money in excess of $10.0 million
or its foreign currency equivalent at the time such judgment or decree is entered against
the Company, any Subsidiary Guarantor or any Significant Subsidiary, remains outstanding
for a period of 60 consecutive days following the entry of such judgment or decree and is
not discharged, waived or the execution thereof stayed; or

     (10) any Subsidiary Guaranty ceases to be in full force and effect (other than in
accordance with the terms of such Subsidiary Guaranty) or any Subsidiary Guarantor denies
or disaffirms its obligations under its Subsidiary Guaranty (other than in accordance with
the terms of such Subsidiary Guaranty).

          The foregoing will constitute Events of Default whatever the reason for any such Event of
Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.

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

          A Default under clauses (4) or (5) is not an Event of Default until the Trustee or the Holders
of at least 25% in principal amount of the outstanding Securities notify the Company of the Default
and the Company does not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that such notice is a
“Notice of Default”.

          The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written
notice in the form of an Officers’ Certificate of any Event of Default under clause (6) or (10) and
any event which with the giving of notice or the lapse of time would become an Event of Default
under clause (4), (5) or (9), its status and what action the Company is taking or proposes to take
with respect thereto.

          SECTION 6.02. Acceleration. (a) If an Event of Default (other than an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the
Securities by notice to the Company and the Trustee, may declare the principal of and accrued but
unpaid interest on all the Securities to be due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately. If an Event of Default specified in
Section 6.01(7) or (8) with respect to the Company occurs, the principal of and interest on all the
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 Securityholders. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of principal or

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interest that has become due solely because of acceleration. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.

          (b) Notwithstanding the foregoing, if an Event of Default under Section 6.01(6) has occurred
and is continuing, such Event of Default and any consequential acceleration (to the extent not in
violation of any applicable law or in conflict with any judgment or decree of a court of competent
jurisdiction) shall be automatically rescinded if (i) the Indebtedness that is the subject of such
Event of Default under Section 6.01(6) has been repaid or (ii) if the default relating to such
Indebtedness is waived by the holders of such Indebtedness or cured, and if such Indebtedness has
been accelerated, then the holders thereof have rescinded their declaration of acceleration with
respect thereto, and (iii) any other existing Events of Default, except nonpayment of principal,
premium or interest on the Securities that became due solely because of the acceleration of the
Securities, have been cured and waived.

          SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal of or interest on the
Securities or to enforce the performance of any provision of the Securities or the Indenture.

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

          SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in principal amount
of the Securities by notice to the Trustee may waive an existing Default and its consequences
except (a) a Default in the payment of the principal of or interest on a Security, (b) a Default
arising from the failure to redeem or purchase any Security when required pursuant to the Indenture
or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the
consent of each Securityholder affected. When a Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or impair any consequent right.

          SECTION 6.05. Control by Majority. The Holders of a majority in principal amount of
the Securities may direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or the Indenture or, subject
to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee that is
not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.

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          SECTION 6.06. Limitation on Suits. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Securityholder may pursue any remedy with
respect to the Indenture or the Securities unless:

     (1) the Holder gives to the Trustee written notice stating that an Event of Default is
continuing;

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

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

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

     (5) the Holders of a majority in principal amount of the Securities do not give the
Trustee a direction inconsistent with the request during such 60-day period.

          A Securityholder may not use the Indenture to prejudice the rights of another Securityholder
or to obtain a preference or priority over another Securityholder. In the event that the
Definitive Securities are not issued to any beneficial owner promptly after the Registrar has
received a request from the Holder of a Global Security (as defined in the Appendix) to issue such
Definitive Securities to such beneficial owner of its nominee, the Company expressly agrees and
acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to the Indenture,
the right of such beneficial holder of Securities to pursue such remedy with respect to the portion
of the Global Security that represents such beneficial holder’s Securities as if such Definitive
Securities had been issued.

          SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any other
provision of the Indenture, the right of any Holder to receive payment of principal of and interest
on the Securities held by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.

          SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount then due and owing
(together with interest on any unpaid interest to the extent lawful) and the amounts provided for
in Section 7.07.

          SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of
claim and other papers or documents as may be necessary or advisable in order to have the claims of
the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless prohibited

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by law or applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to the Holders, to pay
to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under
Section 7.07.

          SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to
this Article 6, it shall pay out the money or property in the following order:

     FIRST: to the Trustee for amounts due under Section 7.07;

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

     THIRD: to the Company as provided in a written direction from the Company.

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

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

          SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the extent it may
lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of the Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and shall not hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as though no such law
had been enacted.

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ARTICLE 7

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 the Indenture and use
the same degree of care 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:

     (1) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in the Indenture and no implied covenants or obligations shall be
read into the Indenture against the Trustee; and

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

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

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

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

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

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

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

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

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

               (g) Every provision of the Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of this Section
and to the provisions of the TIA.

          SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any document believed
by it to be genuine and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.

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

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

               (d) The Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers.

               (e) The Trustee may consult with counsel, and the advice or opinion of counsel with
respect to legal matters relating to the Indenture and the Securities shall be full and
complete authorization and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or opinion of such
counsel.

               (f) The Trustee shall not be deemed to have notice of any Default or Event of Default,
except a Default under Sections 6.01(i) or 6.01(ii), unless written notice of any event which
is in fact such a Default or Event of Default is received by a Trust Officer at its office
described in Section 11.02 herein from the Company or the Holders of 25% in aggregate principal
amount of the outstanding Securities, and such notice references the specific Default or Event
of Default, the Securities and the Indenture and, in the absence of any such notice, the
Trustee may conclusively assume that no such Default or Event of Default exists.

               (g) In no event will the Trustee be liable for special, indirect or consequential loss or
damages (including loss of profits).

          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 its Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.

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          SECTION 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of the Indenture or the Securities, it shall
not be accountable for the Company’s use of its proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the Trustee’s
certificate of authentication.

          SECTION 7.05. Notice of Defaults. If a Default occurs, is continuing and is known to
the Trustee, the Trustee shall mail to each Securityholder notice of the Default within 90 days
after it occurs. Notwithstanding the immediately preceding sentence, except in the case of a
Default involving the payment of principal of or interest on any Security (including payments
pursuant to the mandatory redemption provisions of such Security, if any), the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is not opposed to the interests of the Securityholders.

          SECTION 7.06. Reports by Trustee to Holders. As promptly as practicable after each
July 15 beginning with July 15, 2011, and in any event prior to September 15 in each year, the
Trustee shall mail to each Securityholder a brief report dated as of September 15 that complies
with TIA § 313(a). During the same time period specified above, the Trustee also shall comply with
TIA § 313(b), which section relates to the release or substitution of certain property from the
lien of the Indenture and advances made by the Trustee.

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

          SECTION 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from
time to time reasonable compensation for its services. The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s
agents, counsel, accountants and experts. The Company shall indemnify the Trustee against any and
all loss, liability or expense (including attorneys’ fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee may have separate counsel and the Company shall pay the fees and
expenses of such counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee’s own wilful misconduct,
negligence or bad faith.

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          To secure the Company’s payment obligations in this Section, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the Trustee other than money
or property held in trust to pay principal of and interest on particular Securities.

          The Company’s payment obligations pursuant to this Section shall survive the discharge of the
Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in Section
6.01(7) or (8) with respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.

          SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time by so
notifying the Company. The Holders of a majority in principal amount of the Securities may remove
the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:

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

          (2) the Trustee is adjudged bankrupt or insolvent;

          (3) a receiver or other public officer takes charge of the Trustee or its property; or

          (4) the Trustee otherwise becomes incapable of acting.

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

          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under the Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee
to the successor Trustee, subject to the lien provided for in Section 7.07.

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

          If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

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          Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s
obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

          SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges
or converts into, or transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.

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

          SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of TIA § 310(a). The Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA § 310(b); provided, however, that there shall be
excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

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

ARTICLE 8

Discharge of Indenture; Defeasance

          SECTION
8.01. Discharge of Liability on Securities; Defeasance. (a) When (1) the Company delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation, (2) all outstanding Securities have become due
and payable, whether at maturity or on a redemption date as a result of the mailing of a notice of
redemption pursuant to Article 3 hereof or (3) all outstanding Securities not theretofore delivered
for cancellation will become due and payable within one year at Stated Maturity or as the result of
the giving of a notice of redemption and, in the case of clause (2) or (3), the Company irrevocably
deposits with

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the Trustee as trust funds, cash in U.S. dollars or non-callable U.S. Government
Obligation or a combination thereof, in amounts sufficient to pay at maturity or upon redemption
all outstanding Securities, including interest thereon to maturity or such redemption date (other
than Securities replaced pursuant to Section 2.07), and if in either case the Company pays all
other sums payable hereunder by the Company, then the Indenture shall, subject to Section 8.01(c),
cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of the
Indenture on demand of the Company accompanied by an Officers’ Certificate and an Opinion of
Counsel and at the cost and expense of the Company.

          (b) Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (1) all
its obligations under the Securities and the Indenture (“legal defeasance option”) or (2) its
obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 and
the operation of Sections 6.01(4), 6.01(5) (but only with respect to the Company’s reporting
obligations under Section 4.02), 6.01(6), 6.01(7), 6.01(8), 6.01(9) and 6.01(10) (but, in the
case of Sections 6.01(7) and (8), with respect only to Significant Subsidiaries and Subsidiary
Guarantors) and the limitations contained in Section 5.01(a)(3) (“covenant defeasance option”).
The Company may exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.

          If the Company exercises its legal defeasance option, payment of the Securities may not be
accelerated because of an Event of Default with respect thereto. If the Company exercises its
covenant defeasance option, payment of the Securities may not be accelerated because of an Event of
Default specified in Sections 6.01(4), 6.01(5) (but only with respect to the Company’s reporting
obligations under Section 4.02), 6.01(6), 6.01(7), 6.01(8), 6.01(9) and 6.01(10) (but, in the case
of Sections 6.01(7) and (8), with respect only to Significant Subsidiaries and Subsidiary
Guarantors) or because of the failure of the Company to comply with Section 5.01(a)(3). If the
Company exercises its legal defeasance option or its covenant defeasance option, each Subsidiary
Guarantor, if any, shall be released from all its obligations with respect to its Subsidiary
Guaranty.

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

          (c) Notwithstanding clauses (a) and (b) above, the Company’s obligations in Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in this Article 8 shall survive until the
Securities have been paid in full. Thereafter, the Company’s obligations in Sections 7.07,
8.04 and 8.05 shall survive.

          SECTION 8.02. Conditions to Defeasance. The Company may exercise its legal
defeasance option or its covenant defeasance option only if:

     (1) the Company irrevocably deposits in trust with the Trustee cash in U.S. dollars or
U.S. Government Obligations or a combination thereof for the

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payment of principal of and interest on the Securities to maturity or redemption, as the case
may be;

     (2) the Company delivers to the Trustee a certificate from a nationally recognized
firm of independent accountants expressing their opinion that the payments of principal and
interest when due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due on all the
Securities to maturity or redemption, as the case may be;

     (3) 123 days pass after the deposit is made and during the 123-day period no Default
specified in Sections 6.01(7) or (8) with respect to the Company occurs which is continuing
at the end of the period;

     (4) the deposit does not constitute a default under any other agreement binding on the
Company;

     (5) the Company delivers to the Trustee an Opinion of Counsel to the effect that the
trust resulting from the deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940;

     (6) in the case of the legal defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel stating that since the date of the Indenture (A) the
Company has received from, or there has been published by, the Internal Revenue Service a
ruling, or (B) 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
Securityholders will not recognize income, gain or loss for Federal income tax purposes as
a result of such deposit and 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
defeasance had not occurred;

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

     (8) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and discharge of the
Securities as contemplated by this Article 8 have been complied with.

          Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for
the redemption of Securities at a future date in accordance with Article 3.

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          SECTION 8.03. Application of Trust Money. The Trustee shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the
deposited money and the money from U.S. Government Obligations through the Paying Agent and in
accordance with the Indenture to the payment of principal of and interest on the Securities.

          SECTION 8.04. Repayment to the Company. The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities held by them at any
time.

          Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay
to the Company upon request any money held by them for the payment of principal or interest that
remains unclaimed for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.

          SECTION 8.05. Indemnity for Government Obligations. The Company shall pay and shall
indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited
U.S. Government Obligations or the principal and interest received on such U.S. Government
Obligations.

          SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this Article 8 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 Company’s and each Subsidiary
Guarantor’s obligations under the Indenture, and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this
Article 8; provided, however, that, if the Company has made any payment of interest
on or principal of any Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive such payment from
the money or U.S. Government Obligations held by the Trustee or Paying Agent.

ARTICLE 9

Amendments

          SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary Guarantors and
the Trustee may amend the Indenture or the Securities without notice to or consent of any
Securityholder:

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

          (2) to comply with Article 5;

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     (3) to provide for uncertificated Securities in addition to or in place of
certificated Securities; provided, however, that the uncertificated
Securities are issued in registered form for purposes of Section 163(f) of the Code or in a
manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the
Code;

     (4) to add Guarantees with respect to the Securities, including any Subsidiary
Guarantees, or to secure the Securities;

     (5) to add to the covenants of the Company or any Subsidiary Guarantor for the benefit
of the Holders or to surrender any right or power herein conferred upon the Company or any
Subsidiary Guarantor;

     (6) to comply with any requirements of the SEC in connection with qualifying, or
maintaining the qualification of, the Indenture under the TIA;

     (7) to make any change that does not adversely affect the rights of any Securityholder
and any change to conform the Indenture to any terms explicitly described in the
“Description of the Notes” section of the Prospectus Supplement; or

     (8) to make any amendment to the provisions of the Indenture relating to the transfer
and legending of Securities; provided, however, that (a) compliance with
the Indenture as so amended would not result in Securities being transferred in violation
of the Securities Act or any other applicable securities law and (b) such amendment does
not materially and adversely affect the rights of Holders to transfer Securities.

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

          SECTION 9.02. With Consent of Holders. The Company, the Subsidiary Guarantors and
the Trustee may amend the Indenture or the Securities with the written consent of the Holders of at
least a majority in principal amount of the Securities then outstanding (including consents
obtained in connection with a tender offer or exchange for the Securities) and any past default or
compliance with any provisions may also be waived with the consent of the Holders of at least a
majority in principal amount of the Securities then outstanding. However, without the consent of
each Securityholder affected thereby, an amendment or waiver may not:

     (1) reduce the amount of Securities whose Holders must consent to an amendment;

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

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     (3) reduce the principal of or extend the Stated Maturity of any Security;

     (4) reduce the amount payable upon the redemption of the Securities or change the time
at which any Security may be redeemed as described in Article 3 hereto and paragraph 5 of
the Securities;

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

     (6) make any changes in the ranking or priority of any Security that would adversely
affect the Securityholders;

     (7) make any change in Section 6.04 or 6.07 or the second sentence of this Section; or

     (8) make any change in, or release other than in accordance with the provisions of the
Indenture, any Subsidiary Guaranty that would adversely affect the Securityholders.

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

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

          SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to the Indenture
or the Securities shall comply with the TIA as then in effect.

          SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to an
amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder
of that Security or portion of the Security that evidences the same debt as the consenting Holder’s
Security, even if notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or
portion of the Security if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall
bind every Securityholder. An amendment or waiver becomes effective upon the execution of such
amendment or waiver by the Trustee.

          The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Securityholders entitled to give their consent or take any other action described
above or required or permitted to be taken pursuant to the Indenture. If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at
such record date (or their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent

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previously given or to take any such action, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for more than 120 days
after such record date unless consent from the Holders of the principal amount of Securities
required hereunder for such amendment or waiver to be effective also shall have been given and not
revoked within such 120-day period.

          SECTION 9.05. Notation on or Exchange of Securities. If an amendment changes the
terms of a Security, the Trustee may require the Securityholder to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange
for the Security shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment.

          SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any amendment
authorized pursuant to this Article 9 if the amendment does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign
it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by the Indenture.

          SECTION 9.07. Payment for Consent. Neither the Company nor any Affiliate of the
Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of the Indenture or the Securities unless such
consideration is offered to all Holders and is paid to all Holders that so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to such consent, waiver or
agreement.

ARTICLE 10

Subsidiary Guarantees

          SECTION 10.01. Guarantees. Each Subsidiary Guarantor hereby unconditionally and
irrevocably guarantees, jointly and severally, to each Holder and to the Trustee and its successors
and assigns (a) the full and punctual payment of principal of and interest on the Securities when
due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under the Indenture and the Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the Company under the
Indenture and the Securities (all the foregoing being hereinafter collectively called the
“Guaranteed Obligations”). Each Subsidiary Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or further assent from

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such Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound under this
Article 10 notwithstanding any extension or renewal of any Obligation.

          Each Subsidiary Guarantor waives presentation to, demand of, payment from and protest to the
Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment.
Each Subsidiary Guarantor waives notice of any default under the Securities or the Guaranteed
Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (1)
the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person (including any Subsidiary Guarantor) under the
Indenture, the Securities or any other agreement or otherwise; (2) any extension or renewal of any
thereof; (3) any rescission, waiver, amendment or modification of any of the terms or provisions of
the Indenture, the Securities or any other agreement; (4) the release of any security held by any
Holder or the Trustee for the Guaranteed Obligations or any of them; (5) the failure of any Holder
or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed
Obligations; or (6) except as set forth in Section 10.06, any change in the ownership of such
Subsidiary Guarantor.

          Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee of collection) and
waives any right to require that any resort be had by any Holder or the Trustee to any security
held for payment of the Guaranteed Obligations.

          Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06, the obligations of each
Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise
affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce
any remedy under the Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of such Subsidiary
Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.

          Each Subsidiary Guarantor further agrees that its Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.

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          In furtherance of the foregoing and not in limitation of any other right which any Holder or
the Trustee has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the
failure of the Company to pay the principal of or interest on any Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Obligation, each Subsidiary Guarantor hereby promises to and shall, upon
receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of (A) the unpaid amount of such Guaranteed
Obligations, (B) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent
not prohibited by law) and (C) all other monetary Guaranteed Obligations of the Company to the
Holders and the Trustee.

          Each Subsidiary Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations hereby may be
accelerated as provided in Article 6 for the purposes of such Subsidiary Guarantor’s Subsidiary
Guaranty herein, notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of
any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by
such Subsidiary Guarantor for the purposes of this Section.

          Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under
this Section.

          SECTION 10.02. Limitation on Liability. Any term or provision of the Indenture to
the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed
hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering the Indenture, as it relates to such Subsidiary Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.

          SECTION 10.03. Successors and Assigns. This Article 10 shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall enure to the benefit of the
successors and assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that
party in the Indenture and in the Securities shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of the Indenture.

          SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of either the
Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall
operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are

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cumulative and not exclusive of any other rights, remedies or benefits which either may have
under this Article 10 at law, in equity, by statute or otherwise.

          SECTION 10.05. Modification. No modification, amendment or waiver of any provision
of this Article 10, nor the consent to any departure by any Subsidiary Guarantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by the Trustee, and then
such waiver or consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on any Subsidiary Guarantor in any case shall entitle such
Subsidiary Guarantor to any other or further notice or demand in the same, similar or other
circumstances.

          SECTION 10.06. Release of Subsidiary Guarantor. A Subsidiary Guarantor will be
released from its obligations under this Article 10 (other than any obligation that may have arisen
under Section 10.07):

     (1) upon the sale (including any sale pursuant to any exercise of remedies by a holder
of Indebtedness of the Company or of such Subsidiary Guarantor) or other disposition
(including by way of consolidation or merger) of a Subsidiary Guarantor,

     (2) upon the sale or disposition of all or substantially all the assets of such
Subsidiary Guarantor,

     (3) upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in
accordance with the terms of the Indenture,

     (4) at such time as such Subsidiary Guarantor does not have any Indebtedness
outstanding that would have required such Subsidiary Guarantor to enter into a Guaranty
Agreement pursuant to Section 4.11 and the Company provides an Officers’ Certificate to the
Trustee certifying that no such Indebtedness is outstanding and that the Company elects to
have such Subsidiary Guarantor released from this Article 10, or

     (5) upon defeasance of the Securities pursuant to Article 8, or

     (6) upon the full satisfaction of the Company’s obligations under the Indenture;

provided, however, that in the case of clauses (1) and (2) above, (i) such
sale or other disposition is made to a Person other than the Company or an Affiliate of the
Company, (ii) such sale or disposition is otherwise permitted by the Indenture and (iii)
the Company provides an Officers’ Certificate to the Trustee to the effect that the Company
will comply with its obligations under Section 4.06.

At the request of the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.

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          SECTION 10.07. Contribution. Each Subsidiary Guarantor that makes a payment under
its Subsidiary Guaranty shall be entitled upon payment in full of all Guaranteed Obligations under
the Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such
other Subsidiary Guarantor’s pro rata portion of such payment based on the
respective net assets of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.

ARTICLE 11

Miscellaneous

          SECTION 11.01. Trust Indenture Act Controls. If any provision of the Indenture
limits, qualifies or conflicts with another provision which is required to be included in the
Indenture by the TIA, the required provision shall control.

          SECTION 11.02. Notices. Any notice or communication shall be in writing and
delivered in person or mailed by first-class mail addressed as follows:

if to the Company or any Subsidiary Guarantor:

PetroQuest Energy, Inc.

400 E. Kaliste Saloom Road, Suite 6000

Lafayette, Louisiana 70508

Attention of Chief Financial Officer

if to the Trustee:

The Bank of New York Mellon Trust Company, N.A.

Corporate Trust

601 Travis Street, 16th Floor

Houston, Texas 77002

Attention of Kash Asghar

          The Company, any Subsidiary Guarantor or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

          Any notice or communication mailed to a Securityholder shall be mailed to the Securityholder
at the Securityholder’s address as it appears on the registration books of the Registrar and shall
be sufficiently given if so mailed within the time prescribed. Notwithstanding any provision of
this Indenture to the contrary, so long as the Securities are evidenced by Global Securities, any
notice to the Securityholders shall be sufficient if given in accordance with the applicable
procedures of the Depository within the time prescribed.

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          Failure to mail a notice or communication to a Securityholder or any defect in it shall not
affect its sufficiency with respect to other Securityholders. If a notice or communication is
mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

          SECTION 11.03. Communication by Holders with Other Holders. Securityholders may
communicate pursuant to TIA § 312(b) with other Securityholders with respect to their rights under
the Indenture or the Securities. The Company, any Subsidiary Guarantor, the Trustee, the Registrar
and anyone else shall have the protection of TIA § 312(c).

          SECTION 11.04. Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Company to the Trustee to take or refrain from taking any action under the
Indenture, the Company shall furnish to the Trustee:

     (1) an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in the Indenture relating to the proposed action have been complied with; and

     (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent have been
complied with.

          SECTION 11.05. Statements Required in Certificate or Opinion. Each certificate or
opinion with respect to compliance with a covenant or condition provided for in the Indenture shall
include:

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

     (2) 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;

     (3) a statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and

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

          SECTION 11.06. When Securities Disregarded. In determining whether the Holders of
the required principal amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be disregarded and deemed not
to be outstanding, except that, for the

85

 

purpose of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.

          SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by or a meeting of Securityholders. The Registrar and the Paying Agent
may make reasonable rules for their functions.

          SECTION 11.08. Legal Holidays. If a payment date is a Legal Holiday, payment shall
be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period. If a regular record date is a Legal Holiday, the record date shall not be
affected.

          SECTION 11.09. Governing Law. The Indenture and the Securities shall be governed by,
and construed in accordance with, the laws of the State of New York.

          SECTION 11.10. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, as such, of the Company or any Subsidiary Guarantor shall not have any
liability for any obligations of the Company under the Securities or the Indenture or of such
Subsidiary Guarantor under its Subsidiary Guaranty or the Indenture or for any claim based on, in
respect of, or by reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such claims and liability. The waiver and release shall
be part of the consideration for the issue of the Securities.

          SECTION 11.11. Successors. All agreements of the Company in the Indenture and the
Securities shall bind its successors. All agreements of the Trustee in the Indenture shall bind
its successors.

          SECTION 11.12. Multiple Originals. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together represent
the same agreement. One signed copy is enough to prove this Supplemental Indenture.

          SECTION 11.13. Table of Contents; Headings. The table of contents, cross-reference
sheet and headings of the Articles and Sections of this Supplemental Indenture have been inserted
for convenience of reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.

86

 

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

	 	 	 	 	 
	 	PETROQUEST ENERGY, INC.,

 	 
	 	By  	/s/ Charles T. Goodson
 	 
	 	 	Name:  	Charles T. Goodson 	 
	 	 	Title:  	Chairman, President and
 Chief Executive Officer 	 
	 
	 	PETROQUEST ENERGY, L.L.C.,

 	 
	 	By  	/s/ Charles T. Goodson
 	 
	 	 	Name:  	Charles T. Goodson 	 
	 	 	Title:  	Chairman, President and
 Chief Executive Officer 	 
	 
	 	TDC ENERGY LLC,

 	 
	 	By  	/s/ Charles T. Goodson
 	 
	 	 	Name:  	Charles T. Goodson 	 
	 	 	Title:  	Chairman, President and
 Chief Executive Officer 	 
	 
	 	THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A.,

 	 
	 	By  	/s/ Kash Asghar
 	 
	 	 	Name:  	Kash Asghar 	 
	 	 	Title:  	Senior
Associate 	 

87

 

	 	 	 	 	 

APPENDIX

PROVISIONS RELATING TO SECURITIES,

     1. Definitions.

          1.1 Definitions.

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

          “Definitive Security” means a certificated Initial Security or Exchange Security or Private
Exchange Security bearing, if required, the appropriate restricted securities legend set forth in
Section 2.3(e).

          “Depository” means The Depository Trust Company, its nominees and their respective successors.

          “Global Securities” means, individually and collectively, each of the Securities issued or
issuable in the global form of Exhibit A hereto issued in accordance with Article 2 of the
Indenture.

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

          “Underwriters” means (1) with respect to the Securities issued on the Issue Date, J.P. Morgan
Securities Inc. and the underwriters listed in Schedule 1 to the Underwriting Agreement and (2)
with respect to each issuance of Additional Securities, the Person purchasing such Additional
Securities under the related Underwriting Agreement.

          “Underwriting Agreement” means (1) with respect to the Securities issued on the Issue Date,
the Underwriting Agreement dated August 12, 2010, among the Company, the Subsidiary Guarantors and
the representative for the Underwriters, and (2) with respect to each issuance of Additional
Securities, the purchase agreement or underwriting agreement among the Company, the Subsidiary
Guarantors and the Persons purchasing such Additional Securities.

          1.2 Other Definitions.

	 	 	 	 	 
	 	 	Defined in
	Term	 	Section:
	“Agent Members”

	 	 	2.1	(b)

     2. The Securities.

          (a) Form and Dating. The Securities issued on the Issue Date will be offered and
sold by the Company pursuant to an Underwriting Agreement. Securities

 

 

issued in global form shall be substantially in the form of Exhibit A attached hereto
(including the Global Securities Legend and the “Schedule of Increases or Decreases in the Global
Securities” attached thereto). Securities issued in definitive form shall be substantially in the
form of Exhibit A attached hereto (but without the Global Securities Legend and without the
“Schedule of Increases or Decreases in the Global Security” attached thereto). Each Global
Security shall represent such aggregate principal amount of the outstanding Securities as shall be
specified therein and each shall provide that it shall represent the aggregate principal amount of
outstanding Securities from time to time endorsed thereon and that the aggregate principal amount
of outstanding Securities represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Additional Securities offered after the Issue
Date may be sold in accordance with applicable law.

          Any endorsement of a Global Security to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Securities represented thereby shall be made by the
Trustee, the Depository or the Securities Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.06 of the Indenture.

          (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Security
deposited with or on behalf of the Depository.

          The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Securities that (a) shall be registered in
the name of the Depository for such Global Security or Global Securities or the nominee of such
Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such
Depository’s instructions or held by the Trustee as custodian for the Depository.

          Members of, or participants in, the Depository (“Agent Members”) shall have no rights under
the Indenture with respect to any Global Security held on their behalf by the Depository or by the
Trustee as the custodian of the Depository or under such Global Security, and the Company, the
Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a holder of a
beneficial interest in any Global Security.

          (c) Definitive Securities. Except as provided in this Section 2.1 or Section 2.3 or
2.4, owners of beneficial interests in Global Securities shall not be entitled to receive physical
delivery of Definitive Securities.

          2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the Issue
Date, an aggregate principal amount of $150 million of 10% Senior Notes Due

 

 

2017, and (2) any
Additional Securities for an original issue in an aggregate principal amount specified in the
written order of the Company pursuant to Section 2.02 of the Indenture, in each case upon a written
order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or
an Assistant Secretary of the Company. Such order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Securities is to be authenticated and, in
the case of any issuance of Additional Securities pursuant to Section 2.13 of the Indenture, shall
certify that such issuance is in compliance with Section 4.03 of the Indenture.

          2.3 Transfer and Exchange.

          (a) Transfer and Exchange of Definitive Securities. When Definitive Securities are
presented to the Registrar with a request:

          (x) to register the transfer of such Definitive Securities; or

          (y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the Definitive
Securities surrendered for transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly
executed by the Holder thereof or its attorney duly authorized in writing.

          (b) Transfer and Exchange of Global Securities.

     (i) The transfer and exchange of Global Securities or beneficial interests
therein shall be effected through the Depository, in accordance with the Indenture
(including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depository therefor. A transferor of a beneficial interest in a
Global Security shall deliver to the Registrar a written order given in accordance
with the Depository’s procedures containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the Global
Security. The Registrar shall, in accordance with such instructions instruct the
Depository to credit to the account of the Person specified in such instructions a
beneficial interest in the Global Security and to debit the account of the Person
making the transfer the beneficial interest in the Global Security being
transferred.

     (ii) If the proposed transfer is a transfer of a beneficial interest in one
Global Security to a beneficial interest in another Global Security,
the Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Global Security to which such interest is being
transferred in an amount equal to the principal amount of the interest to be so
transferred, and the Registrar shall reflect on its books and records

 

 

the date and
a corresponding decrease in the principal amount of the Global Security from which
such interest is being transferred.

     (iii) Notwithstanding any other provisions of this Appendix (other than the
provisions set forth in Section 2.4), a Global Security may not be transferred as a
whole except by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.

     (iv) In the event that a Global Security is exchanged for Definitive
Securities pursuant to Section 2.4 of this Appendix, such Securities may be
exchanged only in accordance with such procedures as are substantially consistent
with the provisions of this Section 2.3 and such other procedures as may from time
to time be adopted by the Company.

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

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

“TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF.”

          (d) Cancellation or Adjustment of Global Security. At such time as all beneficial
interests in a Global Security have either been exchanged for Definitive Securities, redeemed,
purchased or canceled, such Global Security shall be returned to the Depository for cancellation or
retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for certificated Securities, redeemed, purchased or
canceled, the principal amount of

 

 

Securities represented by such Global Security shall be reduced
and an adjustment shall be made on the books and records of the Trustee (if it is then the
Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee
or the Securities Custodian, to reflect such reduction.

          (e) No Obligation of the Trustee.

     (i) The Trustee shall have no responsibility or obligation to any beneficial
owner of a Global Security, a member of, or a participant in the Depository or
other Person with respect to the accuracy of the records of the Depository or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of any notice
(including any notice of redemption) or the payment of any amount, under or with
respect to such Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Securities shall be given
or made only to or upon the order of the registered Holders (which shall be the
Depository or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the Depository. The
Trustee may rely and shall be fully protected in relying upon information furnished
by the Depository with respect to its members, participants and any beneficial
owners.

     (ii) The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under the
Indenture or under applicable law with respect to any transfer of any interest in
any Security (including any transfers between or among Depository participants,
members or beneficial owners in any Global Security) other than to require delivery
of such certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by, the terms of the Indenture, and
to examine the same to determine substantial compliance as to form with the express
requirements hereof.

          2.4 Definitive Securities.

          (a) A Global Security deposited with the Depository or with the Trustee as Securities
Custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of Definitive Securities in an
aggregate principal amount equal to the principal amount of such Global Security, in exchange for
such Global Security, only if such transfer complies with Section 2.3 hereof and (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository for such Global
Security and the Depository fails to appoint a successor depository or if at any time such
Depository ceases to be a “clearing agency” registered under the Exchange Act, in either case, and
a successor depository is not appointed by the

 

 

Company within 90 days of such notice, or (ii) an
Event of Default has occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of Definitive Securities under
the Indenture.

          (b) Any Global Security that is transferable to the beneficial owners thereof pursuant to this
Section 2.4 shall be surrendered by the Depository to the Trustee located at its principal
corporate trust office to be so transferred, in whole or from time to time in part, without charge,
and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of Definitive Securities of authorized denominations.
Any portion of a Global Security transferred pursuant to this Section 2.4 shall be executed,
authenticated and delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.

          (c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global
Security shall be entitled to grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under the Indenture or the Securities.

          (d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof,
the Company shall promptly make available to the Trustee a reasonable supply of Definitive
Securities in definitive, fully registered form without interest coupons. In the event that such
Definitive Securities are not issued, the Company expressly acknowledges, with respect to the right
of any Holder to pursue a remedy pursuant to Section 6.06 or 6.07 of the Indenture, the right of
any beneficial owner of Securities to pursue such remedy with respect to the portion of the Global
Security that represents such beneficial owner’s Securities as if such Definitive Securities had
been issued.

 

 

EXHIBIT A

[FORM OF FACE OF SECURITY]

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

 

	 	 	 

	No.     
               

	 	$ ___

10% Senior Notes Due 2017

      
    PetroQuest Energy, Inc., a Delaware corporation, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of ___ Dollars on September 1, 2017.

       
   Interest Payment Dates: March 1 and September 1.

      
    Record Dates: February 15 and August 15.

      
    Additional provisions of this Security are set forth on the other side of this Security.

Dated:

	 	 	 	 	 
	 	PETROQUEST ENERGY, INC.,

 	 
	 	By 	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By 	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

					
	 	

TRUSTEE’S CERTIFICATE OF 

     AUTHENTICATION

THE BANK OF NEW YORK MELLON 

     TRUST COMPANY, N.A.,

     as Trustee, certifies that this is one of

          the Securities referred to in the 

          Indenture.

 	 
	 	By  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 

2

 

	 	 	 	 	 

[FORM OF REVERSE SIDE OF SECURITY]

10% Senior Note Due 2017

1. Interest

          PetroQuest Energy, Inc., a Delaware corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Company”) promises to
pay interest on the principal amount of this Security at the rate per annum shown above. The
Company shall pay interest semiannually on March 1 and September 1 of each year, commencing
March 1, 2011. Interest on the Securities shall accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from August 19, 2010. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by this Security plus 1.0% per annum, and it will pay interest
on overdue installments of interest at the same rate to the extent lawful.

2. Method of Payment

          The Company shall pay interest on the Securities (except defaulted interest) to the Persons
who are registered holders of Securities at the close of business on the February 15 or August 15
next preceding the interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and private debts.
Payments in respect of the Securities represented by a Global Security (including principal,
premium and interest) will be made by wire transfer of immediately available funds to the accounts
specified by the Depository. The Company will make all payments in respect of a certificated
Security (including principal, premium and interest) by mailing a check to the registered address
of each Holder thereof; provided, however, that payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later than 30 days
immediately preceding the relevant due date for payment (or such other date as the Trustee may
accept in its discretion).

3. Paying Agent and Registrar

          Initially, The Bank of New York Mellon Trust Company, N.A., a national banking association
(the “Trustee”), will act as Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.

3

 

4. Indenture

          The Company issued the Securities under a First Supplemental Indenture dated as of August 19,
2010 (the “Supplemental Indenture”), among the Company, the Subsidiary Guarantors named therein and
the Trustee, to an Indenture dated as of August 19, 2010 (the “Base Indenture”, as amended and
supplemented by the First Supplemental Indenture, and as further amended from time to time, the
“Indenture”), among the Company and the Trustee. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. §§ 77aaa-77bbbb) (the “Act”) as in effect on the date of the Indenture.
Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders are referred to the
Indenture and the Act for a statement of those terms.

          The Securities are unsecured senior obligations of the Company. The Company shall be entitled,
subject to its compliance with Section 4.03 of the Indenture, to issue Additional Securities
pursuant to Section 2.13 of the Indenture. The Securities issued on the Issue Date and any
Additional Securities will be treated as a single class for all purposes under the Indenture. The
Indenture contains covenants that limit the ability of the Company and its subsidiaries to incur
additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock;
make investments; issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee indebtedness; restrict
dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially
all of its assets and the assets of its subsidiaries; and engage in sale/leaseback transactions.
These covenants are subject to important exceptions and qualifications.

5. Optional Redemption

          Except as set forth below, the Company shall not be entitled to redeem the Securities at its
option.

          On and after September 1, 2014, the Company shall be entitled at its option to redeem all or a
portion of the Securities upon not less than 30 nor more than 60 days’ notice, at the redemption
prices (expressed in percentages of principal amount on the redemption date), plus accrued
interest to the redemption date (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date), if redeemed during the
12-month period commencing on September 1 of the years set forth below:

	 	 	 	 	 
	 	 	Redemption	 
	Period	 	Price	 
	2014
	 	 	105.000	%
	2015
	 	 	102.500	%
	2016 and thereafter
	 	 	100.000	%

          In addition, prior to September 1, 2013, the Company shall be entitled at its option on one or
more occasions to redeem Securities (which includes Additional

4

 

Securities, if any) in an aggregate principal amount not to exceed 35% of the original
aggregate principal amount of the Securities (which includes Additional Securities, if any) at a
redemption price (expressed as a percentage of principal amount) of 110%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds from one or more Equity
Offerings; provided, however, that (1) at least 65% of such original aggregate
principal amount of Securities (which includes Additional Securities, if any) remains outstanding
immediately after the occurrence of each such redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and (2) each such redemption occurs within 120 days
after the date of the related Equity Offering.

          Prior to September 1, 2014, the Company shall be entitled at its option to redeem the
Securities (which includes Additional Securities, if any), in whole or in part, at a redemption
price equal to 100% of the principal amount of the Securities plus the Applicable Premium
as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant interest payment date).

6. Notice of Redemption

          Notice of redemption will be mailed at least 30 days but not more than 60 days before the
redemption date to each Holder of Securities to be redeemed at his registered address. Securities
in denominations larger than $1,000 principal amount may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on
all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions thereof) called for
redemption.

7. Put Provisions

          Upon a Change of Control, any Holder of Securities will have the right to cause the Company to
repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of
the principal amount of the Securities to be repurchased plus accrued interest to the date
of repurchase (subject to the right of Holders of record on the relevant record date to receive
interest due on the related interest payment date) as provided in, and subject to the terms of, the
Indenture.

8. Guarantees

          The payment by the Company of the principal of, and premium and interest on, the Securities is
fully and unconditionally guaranteed on a joint and several senior basis by each of the Subsidiary
Guarantors to the extent set forth in the Indenture.

9. Denominations; Transfer; Exchange

          The Securities are in registered form without coupons in denominations of $1,000 principal
amount and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance
with the Indenture. The Registrar may require a

5

 

Holder, among other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption (except, in the case of
a Security to be redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days
before an interest payment date.

10. Persons Deemed Owners

          The registered Holder of this Security may be treated as the owner of it for all purposes.

11. Unclaimed Money

          If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an abandoned property
law designates another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.

12. Discharge and Defeasance

          Subject to certain conditions, the Company at any time shall be entitled to terminate some or
all of its obligations under the Securities and the Indenture if the Company deposits with the
Trustee cash in U.S. dollars, U.S. Government Obligations or a combination thereof for the payment
of principal and interest on the Securities to redemption or maturity, as the case may be.

13. Amendment; Waiver

          Subject to certain exceptions set forth in the Indenture, (a) the Indenture and the Securities
may be amended with the written consent of the Holders of at least a majority in principal amount
outstanding of the Securities and (b) any default or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company, the Subsidiary Guarantors and the Trustee shall be entitled to amend
the Indenture or the Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated Securities in addition to
or in place of certificated Securities, or to add guarantees with respect to the Securities,
including Subsidiary Guarantees, or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company or the Subsidiary Guarantors, or to comply
with any requirement of the SEC in connection with qualifying the Indenture under the Act, or to
make any change that does not adversely affect the rights of any Securityholder, or to make any
changes to conform the Indenture to any term explicitly described in the “Description of Notes”
contained in the Prospectus Supplement or to make amendments to provisions of the Indenture
relating to the form, authentication, transfer and legending of the Securities.

6

 

14. Defaults and Remedies

          Under the Indenture, Events of Default include (a) default for 30 days in payment of interest
on the Securities; (b) default in payment of principal on the Securities at maturity, upon
redemption pursuant to paragraph 5 of the Securities, upon acceleration or otherwise, or failure by
the Company to redeem or purchase Securities when required; (c) failure by the Company or any
Subsidiary Guarantor to comply with other agreements in the Indenture or the Securities, in certain
cases subject to notice and lapse of time; (d) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the Company, any Subsidiary
Guarantor or any Significant Subsidiary if the amount accelerated (or so unpaid) exceeds
$10.0 million; (e) certain events of bankruptcy or insolvency with respect to the Company, the
Subsidiary Guarantors and the Significant Subsidiaries; (f) certain judgments or decrees for the
payment of money in excess of $10.0 million; and (g) certain defaults with respect to Subsidiary
Guarantees. If an Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence of such Events of
Default.

          Securityholders may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives
indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in
payment of principal or interest) if it determines that withholding notice is in the interest of
the Holders.

15. Trustee Dealings with the Company

          Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

16. No Recourse Against Others

          A director, officer, employee, incorporator or stockholder, as such, of the Company or the
Trustee 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. By accepting a Security, each Securityholder waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Securities.

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17. Authentication

          This Security shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Security.

18. Abbreviations

          Customary abbreviations may be used in the name of a Securityholder or an assignee, such as
TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with
rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift
to Minors Act).

19. CUSIP Numbers

          The Company has caused CUSIP, ISIN and Common Code numbers to be printed on the Securities and
has directed the Trustee to use such numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

21. Governing Law

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

          The Company will furnish to any Securityholder upon written request and without charge to the Securityholder a copy of the Supplemental Indenture which has in it the text of this Security in larger type. Requests may be made to:

PetroQuest Energy, Inc.

400 E. Kaliste Saloom Road

Suite 6000

Lafayette, Louisiana 70508

Attention: Corporate Secretary

8

 

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

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

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

and irrevocably appoint  
               
               
          agent to transfer this Security on the books of
the Company. The agent may substitute another to act for him.

	 	 	 	 	 	 	 

	 
	 
	 	 	 	 	 	 
	Date:

	 	 	 	Your Signature:
	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Sign exactly as your name appears on the other side of this Security.

	 	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	Signature 	 

	 	 	 
	Signature Guarantee:
	 	 
	 
	 
	 

	 	 
	Signature must be guaranteed

	 	Signature

     Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

9

 

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

	 	 	 	 	 	 	 	 	 
	 	 	Amount of decrease in	 	Amount of increase in	 	Principal amount of this	 	Signature of authorized
	Date of	 	Principal amount of this	 	Principal amount of this	 	Global Security following	 	officer of Trustee or
	Exchange	 	Global Security	 	Global Security	 	such decrease or increase)	 	Securities Custodian
	 

	 	 
	 	 
	 	 
	 	 

10

 

OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Security purchased by the Company pursuant to Section 4.06
or 4.08 of the Indenture, check the box: o

          If you want to elect to have only part of this Security purchased by the Company pursuant to
Section 4.06 or 4.08 of the Indenture, state the amount in principal amount: $___

	 	 	 	 	 	 	 
	Dated:

	 	 	 	Your Signature:
	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	(Sign exactly as your name appears

on the other side of this Security.)

	 	 	 

	Signature Guarantee: 
	 	 
	 

	 	 
	 

	 	(Signature must be guaranteed)

          Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

11

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