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Exhibit 10.1    
    

[Holland &
Hart LLP Letterhead] 

October 31,
2003 

Clinical
Intelligence, Inc.

1629 York Street, Suite 102

Denver, Colorado 80206 

	Re:
	Issuance of Common Stock of Clinical Intelligence, Inc.  

Ladies and Gentlemen: 

        This
firm represents Clinical Intelligence, Inc., a Delaware corporation (the "Company"). This opinion has been requested with respect to certain matters in connection with the
issuance by the Company of up to 300,000 shares of Common Stock, $.001 par value per share (the "Securities") pursuant to the Company's registration statement on Form SB-1, File
No.                         (the "Registration Statement"), filed with the Securities and Exchange Commission on
October 31, 2003. 

        In
connection with this opinion, we have examined the Registration Statement, the Company's Certificate of Incorporation and Bylaws, records of corporate proceedings with respect to the
Securities and such other documents, records, certificates, memoranda and other instruments as we deem necessary as a basis for this opinion. We have assumed the genuineness and authenticity of all
documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies thereof, and the due execution and delivery of all documents where due execution and
delivery are a prerequisite to the effectiveness thereof. 

        On
the basis of the foregoing, and in reliance thereon, we are of the opinion that the Securities, when sold pursuant to the Registration Statement, will be validly issued, fully paid
and nonassessable. 

        We
hereby consent to be named in the Registration Statement as counsel to the Company with respect to the proposed offering and to the filing of a copy of this opinion as
Exhibit 10.1 to the Registration Statement. 

	 	 	Sincerely,
	

 	
 	

/s/ Holland & Hart LLP
	

 	
 	

Holland & Hart LLP

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EXHIBIT 10.2  

 
 

CONSENT OF GORDON, HUGHES & BANKS, LLP
  INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS    
    

        We consent to the inclusion in the registration statement on Form SB-1 of Clinical Intelligence, Inc. (a Development Stage Company),
relating to the registration of 1,225,000 shares of common stock, of our report, dated August 29, 2003, on the balance sheets of Clinical Intelligence, Inc. as of December 31,
2002 and 2001, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended and for the cumulative period from May 18, 2000 (inception) to
December 31, 2002. 

Gordon, Hughes & Banks, LLP  

Greenwood Village, Colorado

October 31, 2003 

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Exhibit 4.7 

        SEABULK INTERNATIONAL, INC. 

AND 

THE
GUARANTORS NAMED ON THE SIGNATURE PAGE HERETO 

91/2%
SENIOR NOTES DUE 2013 

INDENTURE

Dated
as of August 5, 2003 

WACHOVIA
BANK, NATIONAL ASSOCIATION 

As
Trustee 

CROSS-REFERENCE TABLE* 

	Trust Indenture

Act Section
 
	 	Indenture

Section

	310(a)(1)	 	7.10
	      (a)(2)	 	7.10
	      (a)(3)	 	N/A
	      (a)(4)	 	N/A
	      (a)(5)	 	7.10
	      (b)	 	7.10
	      (c)	 	N/A
	311(a)	 	7.11
	      (b)	 	7.11
	      (c)	 	N/A
	312(a)	 	2.05
	      (b)	 	11.03
	      (c)	 	11.03
	313(a)	 	7.06
	      (b)(1)	 	7.06
	      (b)(2)	 	7.06, 7.07
	      (c)	 	7.06, 11.02
	      (d)	 	7.06
	314(a)	 	4.03, 11.02
	      (b)	 	N/A
	      (c)(1)	 	11.04
	      (c)(2)	 	11.04
	      (c)(3)	 	N/A
	      (d)	 	N/A
	      (e)	 	11.05
	      (f)	 	N/A
	315(a)	 	7.01
	      (b)	 	7.05, 11.02
	      (c)	 	7.01
	      (d)	 	7.01
	      (e)	 	6.11
	316(a)(last sentence)	 	2.09
	      (a)(1)(A)	 	6.05
	      (a)(1)(B)	 	6.04
	      (a)(2)	 	N/A
	      (b)	 	6.07
	      (c)	 	2.12
	317(a)(1)	 	6.08
	      (a)(2)	 	6.09
	      (b)	 	2.04
	318(a)	 	11.01
	      (b)	 	N/A
	      (c)	 	11.01

N/A means not applicable.

* This Cross-Reference Table is not part of the Indenture. 

 
 
 

TABLE OF CONTENTS    

	 
	 	 
	 	Page

	
 ARTICLE 1
	

DEFINITIONS AND INCORPORATION

BY REFERENCE
	

Section 1.01	
 	

Definitions	
 	

1
	Section 1.02	 	Other Definitions	 	22
	Section 1.03	 	Incorporation by Reference of Trust Indenture Act	 	22
	Section 1.04	 	Rules of Construction	 	22
	

ARTICLE 2
	

THE NOTES
	

Section 2.01	
 	

Form and Dating	
 	

23
	Section 2.02	 	Execution and Authentication	 	23
	Section 2.03	 	Registrar and Paying Agent	 	24
	Section 2.04	 	Paying Agent To Hold Money in Trust	 	24
	Section 2.05	 	Noteholder Lists	 	24
	Section 2.06	 	Transfer and Exchange	 	24
	Section 2.07	 	Replacement Notes	 	25
	Section 2.08	 	Outstanding Notes	 	25
	Section 2.09	 	Temporary Notes	 	25
	Section 2.10	 	Cancellation	 	26
	Section 2.11	 	Defaulted Interest	 	26
	Section 2.12	 	CUSIP Numbers	 	26
	Section 2.13	 	Issuance of Additional Notes	 	26
	ARTICLE 3
	

REDEMPTION AND PREPAYMENT
	Section 3.01	 	Notices to Trustee	 	27
	Section 3.02	 	Selection of Notes To Be Redeemed	 	27
	Section 3.03	 	Notice of Redemption	 	27
	Section 3.04	 	Effect of Notice of Redemption	 	28
	Section 3.05	 	Deposit of Redemption Price	 	28
	Section 3.06	 	Notes Redeemed in Part	 	29
	Section 3.07	 	Optional Redemption	 	29
	Section 3.08	 	Mandatory Redemption	 	30
	Section 3.09	 	Offer To Purchase by Application of Excess Proceeds	 	30

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 ARTICLE 4
	

COVENANTS
	

Section 4.01	
 	

Payment of Notes	
 	

32
	Section 4.02	 	Maintenance of Office or Agency	 	32
	Section 4.03	 	Reports	 	33
	Section 4.04	 	Compliance Certificate	 	33
	Section 4.05	 	Taxes	 	34
	Section 4.06	 	Stay, Extension and Usury Laws	 	34
	Section 4.07	 	Limitation on Restricted Payments	 	34
	Section 4.08	 	Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries	 	38
	Section 4.09	 	Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock	 	39
	Section 4.10	 	Limitation on Asset Sales	 	43
	Section 4.11	 	Limitation on Transactions with Affiliates	 	44
	Section 4.12	 	Limitation on Liens	 	45
	Section 4.13	 	Additional Subsidiary Guarantees	 	46
	Section 4.14	 	Corporate Existence	 	46
	Section 4.15	 	Offer To Repurchase Upon Change of Control	 	46
	Section 4.16	 	No Inducements	 	48
	

ARTICLE 5
	

SUCCESSORS
	

Section 5.01	
 	

Merger, Consolidation, or Sale of Assets	
 	

49
	Section 5.02	 	Successor Corporation Substituted	 	49
	

ARTICLE 6
	

DEFAULTS AND REMEDIES
	

Section 6.01	
 	

Events of Default	
 	

50
	Section 6.02	 	Acceleration	 	52
	Section 6.03	 	Other Remedies	 	52
	Section 6.04	 	Waiver of Past Defaults	 	52
	Section 6.05	 	Control by Majority	 	52
	Section 6.06	 	Limitation on Suits	 	53
	Section 6.07	 	Rights of Holders of Notes To Receive Payment	 	53
	Section 6.08	 	Collection Suit by Trustee	 	53
	Section 6.09	 	Trustee May File Proofs of Claim	 	53
	Section 6.10	 	Priorities	 	54
	Section 6.11	 	Undertaking for Costs	 	54

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 ARTICLE 7
	

TRUSTEE
	

Section 7.01	
 	

Duties of Trustee	
 	

55
	Section 7.02	 	Rights of Trustee	 	56
	Section 7.03	 	Individual Rights of Trustee	 	56
	Section 7.04	 	Trustee's Disclaimer	 	57
	Section 7.05	 	Notice of Defaults	 	57
	Section 7.06	 	Reports by Trustee to Holders of the Notes	 	57
	Section 7.07	 	Compensation and Indemnity	 	57
	Section 7.08	 	Replacement of Trustee	 	58
	Section 7.09	 	Successor Trustee by Merger, etc. 	 	59
	Section 7.10	 	Eligibility; Disqualification	 	59
	Section 7.11	 	Preferential Collection of Claims Against Company	 	60
	

ARTICLE 8
	

LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	

Section 8.01	
 	

Option to Effect Legal Defeasance or Covenant Defeasance	
 	

60
	Section 8.02	 	Legal Defeasance and Discharge	 	60
	Section 8.03	 	Covenant Defeasance	 	61
	Section 8.04	 	Conditions to Legal or Covenant Defeasance	 	61
	Section 8.05	 	Deposited Money and Government Securities To Be Held in Trust; Other Miscellaneous Provisions	 	62
	Section 8.06	 	Repayment to Company	 	63
	Section 8.07	 	Reinstatement	 	63
	Section 8.08	 	Discharge	 	63
	

ARTICLE 9
	

AMENDMENT, SUPPLEMENT AND WAIVER
	

Section 9.01	
 	

Without Consent of Holders of Notes	
 	

64
	Section 9.02	 	With Consent of Holders of Notes	 	65
	Section 9.03	 	Compliance with Trust Indenture Act	 	66
	Section 9.04	 	Revocation and Effect of Consents	 	66
	Section 9.05	 	Notation on or Exchange of Notes	 	67
	Section 9.06	 	Trustee To Sign Amendments, etc. 	 	67
	

ARTICLE 10
	

GUARANTEES OF NOTES
	

Section 10.01	
 	

Subsidiary Guarantees	
 	

67
	Section 10.02	 	[Reserved]	 	68
	Section 10.03	 	Guarantors May Consolidate, etc., on Certain Terms	 	68

iii

 

	 
	 	 
	 	Page

	
Section 10.04	
 	

Releases Following Sale of Assets	
 	

69
	Section 10.05	 	Releases Following Designation as an Unrestricted Subsidiary	 	69
	Section 10.06	 	Limitation on Guarantor Liability	 	69
	Section 10.07	 	"Trustee" To Include Paying Agent	 	70
	

ARTICLE 11
	

MISCELLANEOUS
	

Section 11.01	
 	

Trust Indenture Act Controls	
 	

70
	Section 11.02	 	Notices	 	70
	Section 11.03	 	Communication by Holders of Notes with Other Holders of Notes	 	71
	Section 11.04	 	Certificate and Opinion as to Conditions Precedent	 	72
	Section 11.05	 	Statements Required in Certificate or Opinion	 	72
	Section 11.06	 	Rules by Trustee and Agents	 	72
	Section 11.07	 	No Personal Liability of Directors, Officers, Employees and Stockholders	 	72
	Section 11.08	 	Governing Law	 	73
	Section 11.09	 	No Adverse Interpretation of Other Agreements	 	73
	Section 11.10	 	Successors	 	73
	Section 11.11	 	Severability	 	73
	Section 11.12	 	Table of Contents, Headings, etc. 	 	73
	Section 11.13	 	Counterparts	 	73

APPENDIX AND ANNEXES 

	 
	 	 
	 	 

	RULE 144A/REGULATION S APPENDIX	 	App. - 1
	 	 	EXHIBIT 1 Form of Initial Note	 	 
	 	 	EXHIBIT A Form of Exchange Note or Private Exchange Note	 	 
	 	 	EXHIBIT B Form of Guarantee	 	 
	ANNEX A	 	Form of Supplemental Indenture	 	A - 1

iv

        This Indenture, dated as of August 5, 2003, is among Seabulk International, Inc., a Delaware corporation (the "Company"), the guarantors listed on the signature page hereto
(each, a "Guarantor" and, collectively, the "Guarantors") and Wachovia Bank, National Association, as trustee (the "Trustee"). 

        The
Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Company's Initial Notes, Exchange
Notes, Private Exchange Notes and Additional Notes: 

ARTICLE 1 

DEFINITIONS
AND INCORPORATION

BY REFERENCE 

Section 1.01    Definitions.

        "Additional Interest" means all Additional Interest then owing pursuant to Section 6 of the Registration Rights Agreement referred
to in clause (1) of the definition of "Registration Rights Agreement" in the Appendix. 

        "Additional Notes" means, subject to the Company's compliance with Section 4.09, 91/2% Senior Notes due 2013 of the
Company issued from time to time under the terms of this Indenture after the Initial Issuance Date (other than notes issued pursuant to Sections 2.06, 2.07, 2.09 or 3.06 of this Indenture and other
than Exchange Notes or Private Exchange Notes) and having identical terms (except as to the initial interest payment date) to the Initial Notes or the Exchange Notes or Private Exchange Notes issued
in exchange for the Initial Notes. 

        "Adjusted Treasury Rate" means, with respect to any redemption date, (a) 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 "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after August 15, 2008, 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 (b) 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 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. 

        "Agent" means any Registrar, Paying Agent or co-registrar. 

 

        "Agent Members" has the meaning provided in the Appendix. 

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

        "Applicable Premium" means, with respect to a Note at any redemption date, the greater of (a) 1.00% of the principal amount of such
Note and (b) the excess of (A) the present value at such redemption date of (1) the redemption price of such Note on August 15, 2008 (such redemption price as determined
under Section 3.07(a) exclusive of any accrued and unpaid interest and Additional Interest, if any) plus
(2) all required remaining scheduled interest payments due on such Note through August 15, 2008 (but excluding accrued and unpaid interest and Additional Interest, if any, to the
redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Note on such redemption date. 

        "Asset Sale" means 

        (1)   the
sale, lease, conveyance or other disposition (a "disposition") of any properties or assets (including, without limitation, by way of a sale and leaseback or a Total
Loss), excluding dispositions in the ordinary course of business (provided that the disposition of all or substantially all of the properties or assets
of the Company and its Subsidiaries (on a consolidated basis) will be governed by Section 5.01 of this Indenture and not by the provisions of Section 4.10 hereof), and 

        (2)   the
issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company's Subsidiaries, 

whether
in the case of clause (1) or (2), in a single transaction or a series of related transactions, provided that such transaction or series
of transactions involves properties or assets having a Fair Market Value in excess of $2.5 million. Notwithstanding the preceding, the following transactions will be deemed not to be Asset
Sales: 

        (a)   a
disposition of obsolete or excess equipment or other properties or assets; 

        (b)   a
disposition of properties or assets by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted Subsidiary; 

        (c)   a
disposition of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary; 

        (d)   a
disposition of cash or Cash Equivalents or a disposition of properties or assets that constitutes a Restricted Payment that is permitted by this Indenture or a
Permitted Investment; 

        (e)   a
disposition of properties or assets in the ordinary course of business by the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary that is
engaged in the 

2

 

business
of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or a business that is reasonably complementary or related thereto as determined in
good faith by the Board of Directors), provided that such transaction complies with Sections 4.07 and 4.11 hereof; 

        (f)    any
charter or lease of any equipment or other properties or assets entered into in the ordinary course of business and with respect to which the Company or any
Restricted Subsidiary thereof is the lessor, except any such charter or lease that provides for the acquisition of such properties or assets by the lessee during or at the end of the term thereof for
an amount that is less than their fair market value at the time the right to acquire such properties or assets occurs; 

        (g)   any
trade or exchange by the Company or any Restricted Subsidiary of equipment or other properties or assets for equipment or other properties or assets owned or held by
another Person, provided that the Fair Market Value of the properties or assets traded or exchanged by the Company or such Restricted Subsidiary
(together with any cash or Cash Equivalents) is reasonably equivalent to the Fair Market Value of the properties or assets (together with any cash or Cash Equivalents) to be received by the Company or
such Restricted Subsidiary; provided further that any cash or Cash Equivalents received must be applied in accordance with Section 4.10 hereof; 

        (h)   a
disposition in the ordinary course of business of inventory, receivables or other current assets; and 

        (i)    the
creation or perfection of a Lien (but not the sale or other disposition of the properties or assets subject to such Lien). 

The
Fair Market Value of any non-cash proceeds of a disposition of properties or assets and of any properties or assets referred to in the foregoing clause (g) of this definition
shall be set forth in an Officers' Certificate delivered to the Trustee. 

        "Attributable Indebtedness" in respect of a Sale/Leaseback Transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net 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 or may, at the option of the lessor, be extended). As used in the preceding sentence, the "net rental
payments" under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder,
excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. In the case of any lease that is
terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated. 

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

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

3

 

        "Business Day" means any day other than a Legal Holiday. 

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

        "Capital Stock" means 

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

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

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

        (4)   any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person
but, in each case, excluding any debt securities convertible into such equity. 

        "Cash Equivalents" means 

        (1)   securities
issued or directly and fully guaranteed or insured by the government of the United States or any other country whose sovereign debt has a rating of at least
A3 from Moody's and at least A- from S&P or any agency or instrumentality thereof having maturities of not more than twelve months from the date of acquisition; 

        (2)   certificates
of deposit and Eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any commercial bank organized under the laws of any country that is a member of the Organization for Economic Cooperation and
Development having capital and surplus in excess of $500 million (or the equivalent thereof in any other currency unit); 

        (3)   repurchase
obligations with a term of not more than seven days for underlying securities of the types described in clauses (1) and (2) above entered into
with any financial institution meeting the qualifications specified in clause (2) above; 

        (4)   commercial
paper having the highest rating obtainable from Moody's or S&P, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of investments, and in each case maturing within 270 days after the date of acquisition; 

        (5)   deposits
available for withdrawal on demand with any commercial bank not meeting the qualifications specified in clause (2) above,  provided all such deposits do not exceed $3.0 million in the aggregate
at any one time (or the equivalent thereof in any other currency unit);
and 

4

 

        (6)   money
market mutual funds, substantially all of the assets of which are of the type described in the foregoing clauses (1) through (4). 

        "Change of Control" means the occurrence of any of the following: 

        (1)   the
sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Company and its Restricted Subsidiaries (determined on a consolidated basis) to any Person or Persons (other than to one or more Permitted
Holders); 

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

        (3)   any
"person" (as such term is used in Section 13(d)(3) of the Exchange Act), other than a Permitted Holder or group of Permitted Holders, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of more than 50%
of the voting power of the outstanding Voting Stock of the Company; or 

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

provided, however, that, with respect to clause (3) above a transaction in which the Company
becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if: 

        (a)   the
stockholders of the Company immediately prior to such transaction "beneficially own" (as such term is defined in Rule 13d-3 and
Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the voting power of the outstanding Voting Stock of such other
Person of whom the Company is then a Subsidiary immediately following the consummation of such transaction; and 

        (b)   immediately
following the consummation of such transaction, no "person" (as such term is defined above), other than such other Person (but including the holders of the
Equity Interests of such other Person), or a Permitted Holder or group of Permitted Holders, "beneficially owns" (as such term is defined above), directly or indirectly through one or more
intermediaries, more than 50% of the voting power of the outstanding Voting Stock of the Company. 

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

        "Common Stock" means the common stock of the Company, par value $0.01 per share. 

        "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 Notes from the redemption date to August 15, 2008, 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 August 15, 2008. 

5

 

        "Comparable Treasury Price" means, with respect to any redemption date, if clause (b) 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 Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period
plus, to the extent deducted or excluded in calculating Consolidated Net Income for such period, 

        (1)   Consolidated
Income Taxes of such Person and its Restricted Subsidiaries; 

        (2)   Consolidated
Interest Expense of such Person and its Restricted Subsidiaries, 

        (3)   depreciation,
amortization and drydocking (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in
a prior period) of such Person and its Restricted Subsidiaries; 

        (4)   expenses
and charges of the Company related to the offering of the Company's 91/2% Senior Notes due 2013 and the amendment and restatement of the Credit
Facilities of the Company on the Initial Issuance Date; 

        (5)   any
transaction or issuance costs incurred in connection with actual, proposed or abandoned financings, acquisitions or divestitures; and 

        (6)   all
other non-cash charges and non-cash write offs of such Person and its Restricted Subsidiaries reducing Consolidated Net Income (excluding any
such non-cash charge or write off to the extent that it represents an accrual of or reserve for cash expenditures in any future period or amortization of a prepaid cash expense that was
paid in a prior period not included in the calculation), 

in
each case, on a consolidated basis and determined in accordance with GAAP. Notwithstanding the preceding sentence, amounts described in clauses (1), (2), (3), (4), (5) and
(6) relating to a Restricted Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated Cash Flow of such Person only to the extent (and in the same proportion)
that such amounts could, at the date of calculation, be dividended or distributed, directly or indirectly, to the Company or a Guarantor. 

        "Consolidated Income Taxes" means, with respect to any Person for any period, taxes imposed upon such Person or other payments required to
be made by such Person by any governmental authority which taxes or other payments are calculated by reference to the income or profits of such Person or such Person and its Restricted Subsidiaries
(to the extent such income or profits were included in computing Consolidated Net Income for such period), regardless of whether such taxes or payments are required to be remitted to any governmental
authority. 

        "Consolidated Interest Coverage Ratio" means with respect to any Person for any four fiscal quarter period, the ratio of the Consolidated
Cash Flow of such Person for such period to the Consolidated Interest Expense of such Person for such period; provided,  however, that the Consolidated
Interest Coverage Ratio shall be calculated giving pro forma effect to each of the following transactions as if each such
transaction had occurred at the beginning of the applicable four-quarter reference period: 

6

 

        (1)   any
incurrence, assumption, guarantee, repayment, repurchase, defeasance or redemption by such Person or any of its Restricted Subsidiaries of any Indebtedness (other
than revolving credit borrowings) subsequent to the commencement of the period for which the Consolidated Interest Coverage Ratio is being calculated but prior to the date on which the event for which
the calculation of the Consolidated Interest Coverage Ratio is made (the "Calculation Date"); 

        (2)   any
acquisition that has been made by such Person or any of its Restricted Subsidiaries, including, through a merger or consolidation, and including any related
financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date; and 

        (3)   any
other transaction that may be given pro forma effect in accordance with Article 11 of Regulation S-X as in effect from time to time; 

provided further, however, that (A) the Consolidated Cash Flow attributable to operations or
businesses disposed of prior to the Calculation Date, shall be excluded and (B) the Consolidated Interest Expense attributable to operations or businesses disposed of prior to the Calculation
Date, shall be excluded, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date. 

        "Consolidated Interest Expense" means, with respect to any Person for any period, the sum, without duplication, of 

        (1)   the
consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including amortization of original issue
discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations but excluding
amortization of debt issuance costs); and 

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

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

        (1)   the
Net Income (or loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be excluded except that Net
Income may be included only to the extent of the amount of dividends or distributions paid in cash or declared (and subsequently paid in cash on or prior to the date of calculation) to the referent
Person or its Restricted Subsidiaries; 

        (2)   the
Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental ap- 

7

 

proval
(that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders; and 

        (3)   the
cumulative effect of a change in accounting principles shall be excluded, including, without limitation, any inclusion, charge or write-off with respect
to drydocking expenses resulting from any such change. 

        "Consolidated Net Tangible Assets" means, as of any date of determination, the total assets, less goodwill and other intangibles (other
than patents, trademarks, copyrights, licenses and other intellectual property), net of total liabilities, in each case, as shown on the balance sheet of the Company and its Restricted Subsidiaries
for the most recently ended fiscal quarter for which financial statements are available, determined on a consolidated basis in accordance with GAAP. 

        "Continuing Directors" means, as of any date of determination, any member of the Board of Directors who (a) was a member of the
Board of Directors on the Initial Issuance Date or (b) was nominated for election to the Board of Directors with the approval of, or whose election to the Board of Directors was ratified by,
(i) at least a majority of the Continuing Directors who were members of the Board of Directors at the time of such nomination or election or (ii) any of the Permitted Holders. 

        "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 11.02 hereof or such other
address as to which the Trustee may give notice to the Company. 

        "Credit Facilities" means, with respect to any Person, one or more debt facilities or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow
from such lenders against such receivables) or trade letters of credit, in each case as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. 

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

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

        "Depository" has the meaning provided in the Appendix. 

        "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event: 

        (1)   matures
(excluding any maturity as a result of an optional redemption by the issuer thereof) or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise; 

        (2)   is
convertible or exchangeable for Indebtedness or other Disqualified Stock (excluding Capital Stock which is convertible or exchange solely at the option of the issuer
thereof); or 

8

 

        (3)   is
redeemable at the option of the holder thereof, in whole or in part, 

in
each case, on or prior to the date that is 91 days after the date on which the Notes mature or are redeemed or retired in full; provided,  however,
that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof (or of any security into which it is
convertible or for which it is exchangeable) have the right to require the issuer to repurchase such Capital Stock (or such security into which it is convertible or for which it is exchangeable) upon
the occurrence of any of the events constituting an Asset Sale or a Change of Control shall not constitute Disqualified Stock if such Capital Stock (and all such securities into which it is
convertible or for which it is exchangeable) provides that the issuer thereof will not repurchase or redeem any such Capital Stock (or any such security into which it is convertible or for which it is
exchangeable) pursuant to such provisions prior to compliance by the Company with Section 4.10 or 4.15 of this Indenture, as the case may be. 

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

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Exchange Notes" means any substantially identical issue of notes (other than with respect to transfer restrictions) issued in an exchange
offer for the Initial Notes or any Additional Notes. 

        "Existing Indebtedness" means Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit
Facilities) in existence on the Initial Issuance Date, until such amounts are repaid. 

        "Fair Market Value" means, with respect to any Asset Sale or Restricted Payment, the price that would be negotiated in an arm's-length
transaction for cash 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 an
officer of the Company (and evidenced by an Officers' Certificate delivered to the Trustee) if such value is less than $7.5 million; provided if
the value of such Asset Sale or Restricted Payment is $7.5 million or greater, such determination shall be made in good faith by the Board of Directors of the Company and evidenced by a board
resolution delivered to the Trustee in the form of an Officers' Certificate. 

        "GAAP" means generally accepted accounting principles in the United States as in effect on the Initial Issuance Date. 

        "Global Note" has the meaning provided in the Appendix. 

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

        "Guarantor" means (a) each Restricted Subsidiary of the Company named on the signature page hereto, (b) any other Restricted
Subsidiary of the Company that executes a supplement to this Indenture in accordance with Section 4.13 or 10.03 hereof and (c) the respective successors and assigns of such Restricted
Subsidiaries, as required under Article 10 hereof, in each case until such time as any such 

9

 

Restricted
Subsidiary shall be released and relieved of its obligations pursuant to Section 8.02, 8.03, 10.04 or 10.05 hereof. 

        "Hedging Obligations" means, with respect to any Person, the obligations of such Person under: 

        (1)   interest
rate swap agreements, interest rate cap agreements and interest rate collar agreements; 

        (2)   other
agreements or arrangements designed to protect such Person against fluctuations in interest rates; and 

        (3)   any
foreign currency futures contract, option or similar agreement or arrangement designed to protect such Person against fluctuations in foreign currency rates, 

in
each case to the extent such obligations are incurred in the ordinary course of business of such Person. 

        "Holder," "Noteholder" or "holder" means a
Person in whose name a Note is registered. 

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

        (1)   the
principal of and premium (if any) in respect of indebtedness of such Person for borrowed money; 

        (2)   the
principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; 

        (3)   the
principal component of all obligations of such Person in respect of letters of credit, bankers' acceptances or other similar instruments (including reimbursement
obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable and such obligation is satisfied within 90 days of incurrence); 

        (4)   the
principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), which purchase price is due
more than six months after the date of placing such property in service or taking delivery and title thereto, the amount of such price being that which would be negotiated in an arm's-length
transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction; 

        (5)   Capital
Lease Obligations and all Attributable Indebtedness of such Person; 

        (6)   the
principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified
Stock (but excluding, in each case, any accrued dividends); 

10

 

        (7)   the
principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person;  provided, however, that the amount of such Indebtedness will be the lesser of 

        (a)   the
fair market value of such asset at such date of determination; and 

        (b)   the
amount of such Indebtedness of such other Persons; 

        (8)   the
principal component of Indebtedness of other Persons to the extent guaranteed by such Person; and 

        (9)   to
the extent not otherwise included in this definition, Hedging Obligations of such Person (the amount of any such obligations to be equal at any time to the
termination value of the agreement or arrangement giving rise to such obligation that would be payable by such Person at such time). 

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

        "Initial Issuance Date" means August 5, 2003. 

        "Initial Notes" means the $150.0 million aggregate principal amount of 91/2% Senior Notes Due 2013 issued by the
Company on the Initial Issuance Date. 

        "Initial Purchasers" has the meaning provided in the Appendix. 

        "Institutional Accredited Investor" means an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act. 

        "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of
direct or indirect loans (including guarantees by the referent Person of, and Liens on any assets of the referent Person securing, Indebtedness or other obligations of other Persons), advances or
capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP;  provided, however, that the following shall not constitute Investments:
 

        (1)   extensions
of trade credit or other advances to customers on commercially reasonable terms in accordance with normal trade practices or otherwise in the ordinary course
of business; 

        (2)   Hedging
Obligations; and 

        (3)   endorsements
of negotiable instruments and documents in the ordinary course of business. 

If
the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving
effect to 

11

 

any
such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal
to the Fair Market Value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in Section 4.07 of this Indenture. 

        "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If
a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening
period. 

        "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option
or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction
other than a precautionary financing statement respecting a lease not intended as a security agreement). 

        "Moody's" means Moody's Investors Service, Inc. and its successors. 

        "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends, excluding, however: 

        (1)   any
gain (or loss), together with any related provision for taxes on such gain (or loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to Sale/Leaseback Transactions) or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and 

        (2)   any
extraordinary or nonrecurring gain (or loss), but only to the extent such loss relates to a non-cash charge, together with any related provision for
taxes on such extraordinary or nonrecurring gain (or loss). 

        "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (without duplication): 

        (1)   the
direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, sales commissions, recording fees, title
transfer fees, title insurance premiums, appraiser fees and costs incurred in connection with preparing such asset for sale) and any relocation expenses incurred as a result of such Asset Sale; 

        (2)   taxes
paid or estimated to be payable as a result of the Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements); 

12

 

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

        (4)   any
reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets,
until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reserved or the amount returned to the
Company or its Restricted Subsidiaries from such escrow arrangement, as the case may be. 

        "Non-Recourse Debt" means Indebtedness: 

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

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

        (3)   with
respect to which there is no recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. 

        "Non-Recourse Subsidiaries" means the following Subsidiaries of the Company and any of their Subsidiaries or any of their
successors (other than resulting from a merger, consolidation or amalgamation with any Restricted Subsidiary): Kinsman Lines, Inc., Lightship Limited Partner Holdings, LLC, Lightship Tanker
Holdings, LLC, Lightship Partners, L.P., Delaware Tanker Holding I Inc., Delaware Tanker Holding II Inc., Delaware Tanker Holding III Inc., Delaware Tanker Holding IV Inc.,
Delaware Tanker Holding V Inc., Lightship Tankers I LLC, Lightship Tankers II LLC, Lightship Tankers III LLC, Lightship Tankers IV LLC and Lightship Tankers V LLC. 

        "Notes" means the Initial Notes, the Exchange Notes, the Private Exchange Notes and the Additional Notes issued under this Indenture. 

        "Notes Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. 

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

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

        "Officers' Certificate" means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, 

13

 

the
treasurer or the principal accounting officer of the Company, that meets the requirements of Section 11.05 hereof. 

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

        "Pari Passu Indebtedness" means, with respect to any Net Proceeds from Asset Sales, Indebtedness of the Company or a Guarantor that ranks
equally in right of payment with the Notes or such Guarantor's Subsidiary Guarantee, as the case may be, and the terms of which require the Company or such Guarantor to apply such Net Proceeds to
offer to repurchase such Indebtedness. 

        "Permitted Holders" means Nautilus Acquisition, L.P., DLJ Merchant Banking III, Inc., Credit Suisse First Boston Private
Equity, Inc., C/R Marine Domestic Partnership, L.P., C/R Marine
Non-U.S. Partnership, L.P., C/R Marine Coinvestment, L.P., C/R Marine Coinvestment II, L.P., Riverstone Holdings L.L.C., The Carlyle Group, their respective Affiliates, and any Persons
advised, sponsored, managed or owned directly or indirectly by any of the foregoing Persons or their Affiliates. 

        "Permitted Investments" means: 

        (1)   any
Investment in the Company or in a Restricted Subsidiary of the Company other than a Restricted Subsidiary that is restricted from making dividends or distributions
with respect to its Capital Stock owned by the Company or another Restricted Subsidiary other than by operation of applicable law; 

        (2)   any
Investment in Cash Equivalents; 

        (3)   any
Investment by the Company or any Restricted Subsidiary of the Company in a Person if as a result of such Investment (a) such Person becomes a Restricted
Subsidiary of the Company or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company; 

        (4)   any
Investment made as a result of the receipt of non-cash consideration from (a) an Asset Sale that was made pursuant to and in compliance with
Section 4.10 hereof or (b) a disposition of properties or assets that does not constitute an Asset Sale; 

        (5)   receivables
owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with
customary trade terms; 

        (6)   Investments
in any Person (a) in exchange for an issue or sale by the Company of its Common Stock or (b) out of the net cash proceeds of an issue or sale
by the Company of its Common Stock so long as such Investment pursuant to this clause (b) occurs within 90 days of the closing of such issuance or sale of Common Stock; 

14

 

        (7)   loans
or advances to employees (other than executive officers) made in the ordinary course of business consistent with past practices of the Company or such Restricted
Subsidiary; and 

        (8)   Investments
in Vessel Financing Subsidiaries and/or in Persons engaged principally in the business of providing marine transportation, towing or support services to the
oil, gas and/or chemicals industry or businesses reasonably complementary or related thereto, provided that the aggregate amount of such Investments
pursuant to this clause (8) shall not exceed at any one time $25.0 million plus 10% of any increase in the Company's Consolidated Net Tangible Assets from October 1, 2003 to the
end of the latest fiscal quarter for which financial statements are available. 

        "Permitted Liens" means: 

        (1)   Liens
securing Indebtedness incurred by the Company and its Restricted Subsidiaries of Indebtedness under the Credit Facilities in an aggregate principal amount at any
one time outstanding not to exceed the sum of (A) $100 million plus (B) 25% of any increase in Consolidated Net Tangible Assets from October 1, 2003 to the end of the
latest fiscal quarter for which financial statements are available plus (C) any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection
with such Indebtedness; 

        (2)   Liens
in favor of the Company and its Restricted Subsidiaries; 

        (3)   Liens
on any property, asset or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company,  provided that such Liens were not created or incurred in connection
with, or in contemplation of, such other Person becoming a Restricted Subsidiary and
do not extend to any other property or asset owned by the Company or any of its Restricted Subsidiaries; 

        (4)   Liens
on any property or asset existing at the time of its acquisition by the Company or any Restricted Subsidiary of the Company,  provided that such Liens were not created or incurred in connection with, or
in contemplation of, such acquisition and do not extend to any other
property or asset; 

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

        (6)   Liens
securing Hedging Obligations; 

        (7)   Liens
existing on the Initial Issuance Date; 

        (8)   any
interest or title of a lessor under an operating lease; 

        (9)   Liens
arising by reason of deposits necessary to obtain standby letters of credit in the ordinary course of business; 

15

 

        (10) Liens
on real or personal property or assets of the Company or a Restricted Subsidiary thereof to secure Indebtedness incurred for the purpose of (a) financing
all or any part of the purchase price of such property or assets incurred prior to, at the time of, or within 180 days after, the acquisition of such property or assets or (b) financing
all or any part of the cost of construction of any such property or assets, provided that the amount of any such financing shall not exceed the amount
expended in the acquisition of, or the construction of, such property or assets and such Liens shall not extend to any other property or assets of the Company or a Restricted Subsidiary (other than
any associated accounts, contracts and insurance proceeds); 

        (11) Liens
securing Permitted Refinancing Indebtedness with respect to any Indebtedness referred to in clauses (3), (4), (7) and (10) above;  provided that any such Lien is limited to all or part of the
same property or assets (plus improvements, accessions, proceeds or dividends or
distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property or
assets that are the security for a Permitted Lien hereunder; and 

        (12) Liens
not otherwise permitted by clauses (1) through (11) above securing Indebtedness not in excess, at any one time outstanding, of the sum of
$10.0 million plus 10% of the increase in the Company's Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter for which financial statements are
available. 

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

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

        (2)   (a)
if the Stated Maturity of the Indebtedness being refinanced is earlier than the Stated Maturity of the Notes, the Permitted Refinancing Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced is later than the Stated Maturity of the
Notes, the Permitted Refinancing Indebtedness has a Stated Maturity at least 91 days later than the Stated Maturity of the Notes; 

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

        (4)   if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes or a Subsidiary Guarantee, such
Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes or such Subsidiary Guarantee on terms at least as favorable, taken as a whole, to the holders of Notes as those con- 

16

 

tained
in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and 

        (5)   such
Indebtedness is not incurred by a Restricted Subsidiary that is not a Guarantor if the Company or a Guarantor is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded. 

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

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

        "Private Exchange Notes" has the meaning provided in the Appendix. 

        "Productive Assets" means assets (other than assets that would be classified as current assets in accordance with GAAP) of the kind used
or usable by the Company or its Restricted Subsidiaries in the business of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or any business that
is reasonably complementary or related thereto as determined in good faith by the Board of Directors). 

        "Purchase Agreement" has the meaning provided in the Appendix. 

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

        "Qualified Equity Offering" means: 

        (1)   any
sale of Equity Interests (other than Disqualified Stock) of the Company pursuant to an underwritten offering registered under the Securities Act; or 

        (2)   any
sale of Equity Interests (other than Disqualified Stock) of the Company so long as, at the time of consummation of such sale, the Company has a class of common
equity securities registered pursuant to Section 12(b) or Section 12(g) under the Exchange Act, 

in
each case, other than public offerings with respect to the Company's Common Stock, or options, warrants or rights, registered on Form S-4 or S-8. 

        "Qualified Proceeds" means any of the following or any combination of the following: 

        (1)   cash; 

        (2)   Cash
Equivalents; 

        (3)   Productive
Assets; and 

17

 

        (4)   the
Capital Stock of any Person engaged in the business of providing marine transportation, towing and support services to the oil, gas and/or chemicals industry (or any
business that is reasonably complementary or related thereto as determined in good faith by the Board of Directors) if, in connection with the receipt by the Company or any Restricted Subsidiary of
the Company of that Capital Stock: 

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

        (b)   that
Person is merged, consolidated or amalgamated with or into, or conveys or otherwise transfers substantially all of its assets to, or is liquidated into, the Company
or any Restricted Subsidiary of the Company. 

        "Quotation Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company. 

        "Ready for Sea Cost" means with respect to a Vessel or Vessels to be acquired or leased (pursuant to a Capital Lease Obligation) by the
Company or any Restricted Subsidiary of the Company, the aggregate amount of all expenditures incurred to acquire or construct and bring such Vessel or Vessels to the condition and location necessary
for its or their intended use, including any and all inspections, appraisals, repairs, modifications, additions, permits and licenses in connection with such acquisition or lease, which would be
classified and accounted for as "property, plant and equipment" in accordance with GAAP. 

        "Reference Treasury Dealer" means Credit Suisse First Boston LLC 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. 

        "Registered Exchange Offer" has the meaning provided in the Appendix. 

        "Registration Rights Agreement" has the meaning provided in the Appendix. 

        "Regulation S" has the meaning provided in the Appendix. 

        "Responsible Officer," when used with respect to the Trustee, means any officer within the Corporate Trust Department of the Trustee (or
any successor department of the Trustee) 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 knowledge of and familiarity with the particular subject. 

        "Restricted Global Note" has the meaning provided in the Appendix. 

18

   
        "Restricted Investment" means an Investment other than a Permitted Investment. 

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

        "Restricted U.S. Subsidiary" means any Restricted Subsidiary organized under the laws of the United States, any state thereof or the
District of Columbia. 

        "Rule 144A" has the meaning provided in the Appendix. 

        "Sale/Leaseback Transaction" means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Initial
Issuance 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. 

        "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and its
successors. 

        "SEC" means the Securities and Exchange Commission. 

        "Securities Act" means the Securities Act of 1933, as amended. 

        "Shelf Registration Statement" has the meaning provided in the Appendix. 

        "Significant Subsidiary" means any Restricted Subsidiary of the Company that would be a "significant subsidiary" as defined in
Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Initial Issuance Date. 

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

        "Subsidiary" means, with respect to any Person: 

        (1)   any
corporation, association or other business entity of which more than 50% of the total voting power of its Voting Stock is at the time owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and 

        (2)   any
partnership, joint venture, limited liability company or similar entity of which more than 50% of the capital accounts, distribution rights, total equity and voting
interests or general or limited partnership interests, as applicable, is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person
(or a combination thereof). 

        "Subsidiary Guarantees" means the joint and several guarantees issued by all of the Guarantors pursuant to Article 10 hereof. 

19

 

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

        "Transfer Restricted Securities" has the meaning provided in the Appendix. 

        "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder. 

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

        "Unrestricted Subsidiary" means (a) each Non-Recourse Subsidiary (until redesignated as a Restricted Subsidiary) and
(b) any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution and any Subsidiary of an Unrestricted Subsidiary, but only to the
extent that each of such Subsidiary and its Subsidiaries at the time of such designation: 

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

        (2)   is
not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless such agreement, contract,
arrangement or understanding does not violate the terms of this Indenture described in Section 4.11 hereof; 

        (3)   is
a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional
Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results, in each case, except to the
extent otherwise permitted by this Indenture; and 

        (4)   such
Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the
business of the Company and its Subsidiaries. 

Any
such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the board resolution of the Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions and was permitted by Section 4.07 hereof. The Board of Directors of the Company
may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary, provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if: 

        (A)  such
Indebtedness is permitted by Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; and 

        (B)  no
Default or Event of Default would be in existence following such designation. 

20

 

        "U.S. Dollar Equivalent" means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable
foreign currency as published in The Wall Street Journal in the "Exchange Rates" column under the heading "Currency Trading" on the date two Business
Days prior to such determination. Except as described in Section 4.09 herein, whenever it is necessary to determine whether the Company has complied with any covenant in this Indenture or a
Default has occurred and an amount is expressed in a currency other than U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent determined as of the date such amount is initially
determined in such currency. 

        "Vessel" means one or more shipping vessels whose primary purpose is the maritime transportation of cargo and/or passengers or which are
otherwise engaged, used or useful in any business activities of the Company and its Restricted Subsidiaries and which are owned by and registered (or to be owned by and registered) in the name of the
Company or any of its Restricted Subsidiaries or operated or to be operated by the Company or any of its Restricted Subsidiaries pursuant to a lease or other operating agreement constituting a Capital
Lease Obligation, in each case together with all related spares, equipment and any additions or improvements. 

        "Vessel Financing Subsidiary" means a Restricted Subsidiary whose primary purpose is to purchase Vessels and which has incurred
Indebtedness to finance all or a portion of such assets, provided that neither the Company nor any Guarantor issues a guarantee of or is otherwise obligated with respect to any such Indebtedness of
such Restricted Subsidiary. 

        "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 of such Person. 

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

        (1)   the
sum of the products obtained by multiplying 

        (a)   the
amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect
thereof, by 

        (b)   the
number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by 

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

        "Wholly Owned Restricted Subsidiary" of any Person means a Restricted Subsidiary of such Person, all of the Capital Stock of which (other
than directors' qualifying shares) is owned by the Company or another Wholly Owned Restricted Subsidiary. 

21

 

Section
1.02    Other Definitions. 

	Term
 
	 	Defined in

Section

	"Affiliate Transaction"	 	4.11
	"Appendix"	 	2.01
	"Asset Sale Offer"	 	3.09
	"Change of Control Offer"	 	4.15
	"Change of Control Payment"	 	4.15
	"Change of Control Payment Date"	 	4.15
	"Covenant Defeasance"	 	8.03
	"Discharge"	 	8.08
	"Event of Default"	 	6.01
	"Excess Proceeds"	 	4.10
	"incur" or "incurrence"	 	4.09
	"Legal Defeasance"	 	8.02
	"Offer Amount"	 	3.09
	"Offer Period"	 	3.09
	"Pari Passu Notes"	 	4.10
	"Paying Agent"	 	2.03
	"Payment Default"	 	6.01
	"Purchase Date"	 	3.09
	"Registrar"	 	2.03
	"Restricted Payments"	 	4.07
	"Total Loss"	 	4.09

Section 1.03    Incorporation
by Reference of Trust Indenture Act. 

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

Section 1.04    Rules
of Construction. 

        Unless
the context otherwise requires: 

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

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

        (3)   "or"
is not exclusive; 

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

        (5)   provisions
apply to successive events and transactions; 

22

 

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

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

ARTICLE 2 

THE
NOTES 

Section 2.01    Form
and Dating. 

        Provisions
relating to the Initial Notes, the Private Exchange Notes and the Exchange Notes are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this Indenture. The Initial Notes and the Trustee's certificate of authentication shall be substantially in the form of
Exhibit 1 to the Appendix which is hereby incorporated in and expressly made a part of this Indenture. The Exchange Notes, the Private Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A to the Appendix, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange rule, agreements to which 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 Note shall be dated the date of its authentication. The terms of the Notes set forth in the Appendix are part of the terms
of this Indenture. 

Section 2.02    Execution
and Authentication. 

        An
Officer shall sign the Notes for the Company by manual or facsimile signature. 

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

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

        On
the Initial Issuance Date, the Trustee shall authenticate and deliver $150.0 million of 91/2% Senior Notes due 2013 and, at any time and from time to time
thereafter, the Trustee shall authenticate and deliver Notes for original issue in an aggregate principal amount specified in such order, 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 Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated and, in the case of an issuance of Additional Notes pursuant to Section 2.13 after the Initial Issuance Date, shall certify that such issuance is
in compliance with Section 4.09. 

        The
Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Notes. Unless limited by the terms of such appointment, an authenticating agent
may 

23

 

authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights
as any Registrar, Paying Agent or agent for service of notices and demands. 

Section 2.03    Registrar
and Paying Agent. 

        The
Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Notes may be
presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The 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 this Indenture, which shall incorporate the terms
of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The 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. 

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

Section 2.04    Paying
Agent To Hold Money in Trust. 

        Prior
to 11:00 a.m. New York City time, on each due date of the principal and interest on any Note, 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 Noteholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Notes and shall
notify the Trustee of any default by the 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    Noteholder
Lists. 

        The
Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Noteholders. If the Trustee is not the
Registrar, the 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 Noteholders. 

Section 2.06    Transfer
and Exchange. 

        The
Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer. When a Note is presented to the Registrar or a
co-registrar 

24

 

with
a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(1) of the Uniform Commercial
Code are met. When Notes are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall
make the exchange as requested if the same requirements are met. The Company may require payment of a sum sufficient to cover any taxes, assessments or other governmental charges in connection with
any transfer or exchange pursuant to this Section (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Section 3.06,
4.10, 4.15 or 9.05). 

Section 2.07    Replacement
Notes. 

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

        Every
replacement Note is an additional obligation of the Company. 

Section 2.08    Outstanding
Notes. 

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

        If
a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by
a bona fide purchaser. 

        If
the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 11:00 a.m. New York time, on a redemption date or other maturity date money sufficient to
pay all principal, premium, if any, interest and Additional Interest, if any, payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then
on and after that date such Notes (or portions thereof) cease to be outstanding and interest and Additional Interest, if any, on them cease to accrue. 

Section 2.09    Temporary
Notes. 

        Until
definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay upon surrender for cancellation of any one or more temporary Notes, the
Company shall prepare and the Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes. 

25

 

Section 2.10    Cancellation.

        The
Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy (subject to the record retention requirements of the Exchange Act) all Notes surrendered for registration of
transfer, exchange, payment or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Trustee to deliver canceled Notes to the Company. The Company
may not issue new Notes to replace Notes 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 Notes, the Company shall pay defaulted interest (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 Noteholders 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 Noteholder a notice that states the special record date, the payment date and the amount of defaulted
interest to be paid. 

Section 2.12    CUSIP
Numbers. 

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

Section 2.13    Issuance
of Additional Notes. 

        The
Company shall be entitled, subject to its compliance with Section 4.09, to issue Additional Notes under this Indenture which shall have identical terms as the Initial Notes
issued on the Initial Issuance Date, other than with respect to the date of issuance and issue price; provided,  however, that such Officers' Certificate
shall state that no Additional Notes may be issued at a price that would cause such Additional Notes to have
"original issue discount" within the meaning of Section 1273 of the Code. The Initial Notes issued on the Initial Issuance Date, any Additional Notes and all Exchange Notes or Private Exchange
Notes issued in exchange therefor shall be treated as a single class for all purposes under this Indenture. 

        With
respect to any Additional Notes, the Company shall set forth in a resolution 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 Notes to be authenticated and delivered pursuant to this Indenture; 

26

 

        (2)   the
issue price, the issue date and the CUSIP number and corresponding ISIN of such Additional Notes; and 

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

ARTICLE 3 

REDEMPTION
AND PREPAYMENT 

Section 3.01    Notices
to Trustee. 

        If
the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30 days but not more
than 60 days before a redemption date, an Officers' Certificate setting forth (i) the clause of Section 3.07 pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price, and (v) whether it requests the Trustee to give notice of such redemption. Any such
notice may be cancelled at any time prior to the mailing of notice of such redemption to any Holder and shall thereby be void and of no effect. 

Section 3.02    Selection
of Notes To Be Redeemed. 

        If
less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the Holders of the Notes, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate; provided, however, that no Notes of $1,000 or
less shall be redeemed in part. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 days nor
more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. 

        The
Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof
to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held
by such Holder, even if not a multiple of $1,000, shall be redeemed. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. 

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

Section 3.03    Notice
of Redemption. 

        Subject
to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed,
by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. 

27

 

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

        (a)   the
redemption date; 

        (b)   the
redemption price; 

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

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

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

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

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

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

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

        At
the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided,  however, that the Company shall
have delivered to the Trustee, at least 45 days (unless the Company and the Trustee agree to a shorter period)
prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the second preceding
paragraph. 

Section 3.04    Effect
of Notice of Redemption. 

        Once
notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional. 

Section 3.05    Deposit
of Redemption Price. 

        Prior
to 11:00 a.m. New York time on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04 hereof) money sufficient in same day funds to pay the redemption price of 

28

 

and
accrued interest and Additional Interest, if any, on all Notes to be redeemed on that date. The Paying Agent shall promptly return to the Company any money deposited with the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of and accrued interest and Additional Interest, if any, on all Notes to be redeemed. 

        If
the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest and Additional Interest, if any, shall cease to accrue on the Notes or
the portions of Notes called for redemption whether or not such Notes are presented for payment, and the only remaining right of the Holders of such Notes shall be to receive payment of the redemption
price upon surrender to the Paying Agent of the Notes redeemed. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and
unpaid interest and Additional Interest, if any, shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption
shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful, on any interest and Additional Interest, if any, not paid on such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof. 

Section 3.06    Notes
Redeemed in Part. 

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

Section 3.07    Optional
Redemption. 

        (a)   Except
as set forth in clauses (b) and (c) of this Section 3.07, the Company shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to August 15, 2008. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on
August 15 of the years indicated below: 

	Year
 
	 	Percentage

	2008	 	104.750%
	2009	 	103.167%
	2010	 	101.583%
	2011 and thereafter	 	100.00%

        (b)   Notwithstanding
the provisions of clause (a) of this Section 3.07, at any time on or prior to August 15, 2006, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued at a redemption price of 109.5% of the principal amount thereof, plus accrued and unpaid
interest and Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings, provided that: 

29

 

        (1)   at
least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued remains outstanding immediately after the occurrence of each such
redemption; and 

        (2)   each
such redemption occurs within 90 days of the date of the closing of each such Qualified Equity Offering. 

        (c)   Prior
to August 15, 2008, the Company may at its option redeem, in whole or in part, the Notes at a redemption price equal to 100% of the principal amount of the
Notes plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the redemption date. 

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

        (e)   If
the optional redemption date is on or after an interest payment record date and on or before the related interest payment date, the accrued and unpaid interest and
Additional Interest, if any, will be paid to the Person in whose name the Note is registered at the close of business, on such record date, and no other interest will be payable to holders whose Notes
will be subject to redemption by the Company. 

Section 3.08    Mandatory
Redemption. 

        Except
as set forth under Sections 4.10 and 4.15 hereof, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or to
repurchase the Notes at the option of the holders. 

Section 3.09    Offer
To Purchase by Application of Excess Proceeds. 

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

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

        If
the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, shall be
paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest or Additional Interest, if any, shall be payable to Holders who tender
Notes pursuant to the Asset Sale Offer. 

30

 

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

        (a)   that
the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open; 

        (b)   the
Offer Amount, the purchase price and the Purchase Date; 

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

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

        (e)   that
Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion
of such Note purchased; 

        (f)    that
Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, to the Company or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; 

        (g)   that
Holders shall be entitled to withdraw their election if the Company or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased; 

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

        (i)    that
Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer). 

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

31

 

        On
or before the Purchase Date, the Company shall, to the extent lawful, accept for payment Notes or portions thereof tendered pursuant to the Asset Sale Offer in the aggregate principal
amount required by Section 4.10 hereof, and shall deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09 and Section 4.10. The Company or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Note, and the Trustee shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note
not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date. 

        Other
than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Section 3.01 through
Section 3.06 hereof. 

ARTICLE 4 

COVENANTS

Section 4.01    Payment
of Notes. 

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

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

Section 4.02    Maintenance
of Office or Agency. 

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

        The
Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to
time 

32

 

rescind
such designations. Further, if at any time there shall be no such office or agency in the City of New York where the Notes may be presented or surrendered for payment, the Company shall
forthwith designate and maintain such an office or agency in the City of New York, in order that the Notes shall at all times be payable in the City of New York. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 

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

Section 4.03    Reports. 

        (a)   Notwithstanding
that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC
(unless the SEC will not accept such a filing) within the time periods specified in the Exchange Act and, within 15 days of filing, or attempting to file, the same with the SEC, furnish to the
Trustee and the holders of the Notes: 

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

        (2)   all
current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. The Company shall
at all times comply with TIA Section 314(a). 

        (b)   The
Company and the Guarantors shall furnish to the holders of the Notes, prospective purchasers of the Notes and securities analysts, upon their request, the
information, if any, required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. 

        (c)   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 to the financial statements and in Management's Discussion and Analysis of Results of Operations and Financial Condition, 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 any Unrestricted Subsidiaries. 

Section 4.04    Compliance
Certificate. 

        (a)   The
Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of
the Company and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has
kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the 

33

 

terms,
provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge
and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments
on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with
respect thereto. 

        (b)   So
long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements
delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation)
that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would
lead them to believe that the Company has violated any provisions of Article 4 or Article 5 hereof or, if any such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. 

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

Section 4.05    Taxes. 

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

Section 4.06    Stay,
Extension and Usury Laws. 

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

Section 4.07    Limitation
on Restricted Payments. 

        The
Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly: 

        (1)   declare
or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation involving the Company 

34

  

or
any of its Restricted Subsidiaries) or make any similar payment to the direct or indirect holders of the Company's Equity Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company); 

        (2)   purchase,
redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity
Interests of the Company (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company); 

        (3)   make
any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness that is subordinated to the Notes or any
Subsidiary Guarantee, except a payment of interest at Stated Maturity or principal within six months of Stated Maturity; or 

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

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

        (b)   the
Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof; and 

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

        (A)  50%
of the Consolidated Net Income of the Company for the period (taken as one accounting period) from October 1, 2003 to the end of the Company's most recently
ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such
deficit); plus

        (B)  the
sum of (x) 100% of the aggregate net cash proceeds received by the Company since the Initial Issuance Date from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or of Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than (1) any such Equity Interests,
Disqualified Stock or convertible debt securities sold to a Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock
ownership plan or similar trust is financed by loans from or guaranteed by the 

35

 

Company
or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination and (2) Disqualified Stock or convertible debt securities that have
been converted into Disqualified Stock) and (y) 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Initial Issuance Date;  plus

        (C)  to
the extent that any Restricted Investment that was made after the Initial Issuance Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of
(1) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (2) the initial amount of such Restricted Investment;  plus

        (D)  in
the event that any Unrestricted Subsidiary is designated as a Restricted Subsidiary, the lesser of (1) an amount equal to the Fair Market Value of the
Company's Investments in such Restricted Subsidiary if such Restricted Subsidiary was designated as an Unrestricted Subsidiary after the Initial Issuance Date, or the Fair Market Value of the
Company's Investments made after the Initial Issuance Date with respect to an Unrestricted Subsidiary as of the Initial Issuance Date and (2) the amount of Restricted Investments previously
made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary. 

        The
preceding provisions of this Section 4.07 will not prohibit any of the following: 

        (5)   the
payment of any dividend within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the
provisions of this Indenture; 

        (6)   the
redemption, repurchase, retirement, defeasance or other acquisition of any Indebtedness subordinated to the Notes or a Subsidiary Guarantee or Equity Interests of
the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, other Equity Interests of the Company (other than any
Disqualified Stock and other than Equity Interests issued or sold to a Subsidiary of the Company or an employee stock ownership plan or similar trust to the extent such sale to an employee stock
ownership plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of
determination), provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (4)(c)(B) of the preceding paragraph; 

        (7)   the
defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness subordinated to the Notes or the Subsidiary Guarantees with the net cash proceeds
from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness; 

        (8)   the
payment of any dividend or distribution by a Restricted Subsidiary of the Company to the Company or any of its Restricted Subsidiaries (and if such Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, to the other holders of its Capital Stock on a pro rata basis); 

36

 

        (9)   the
repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company held by any current or former employee or director of the
Company or any of its Restricted Subsidiaries, provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $2.0 million in any calendar year provided that any such amount not so utilized in a calendar year may be carried over to the subsequent calendar year,  provided, however,
that the aggregate amount utilized pursuant to this clause (5) shall not exceed $5.0 million in any calendar year; 

        (10) the
acquisition of Equity Interests of the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise; 

        (11) so
long as no Default or Event of Default has occurred and is continuing, any purchase or redemption of Indebtedness subordinated to the Notes or the Subsidiary
Guarantees from Net Proceeds from an Asset Sale to the extent permitted by Section 4.10 hereof after the Company (or a Restricted Subsidiary, as the case may be) has made an offer to the
holders of the Notes to purchase the Notes pursuant to such covenant; 

        (12) the
pledge by the Company or any Restricted Subsidiary of the Capital Stock of an Unrestricted Subsidiary to secure Non-Recourse Debt of that Unrestricted
Subsidiary; or 

        (13) other
Restricted Payments since the Initial Issuance Date in an amount not to exceed $15.0 million. 

        In
addition to the Unrestricted Subsidiaries as of the Initial Issuance Date, the Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary after the
Initial Issuance Date if such designation would not cause a Default. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to
the extent repaid in cash) in the Subsidiary so designated shall be deemed to be Restricted Payments at the time of such designation. All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the Fair Market Value of such Investments at the time of such designation. Such designation shall only be permitted if such Restricted Payment would be permitted at
such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. 

        The
amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or
issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any non-cash Restricted Payment shall be evidenced by
an Officers' Certificate delivered to the Trustee. Not later than five Business Days following the date of making any Restricted Payment (excluding Restricted Payments permitted by clauses (2), (3),
(4), (6), (7) and (8) of the second preceding paragraph), the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting
forth the basis upon which the calculations required by this Section 4.07 were computed. 

37

 

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

        The
Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to: 

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

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

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

except
for such encumbrances or restrictions existing under or by reason of: 

        (a)   the
Credit Facilities or any instrument governing Existing Indebtedness, each as in effect on the Initial Issuance Date; 

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

        (c)   applicable
law; 

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

        (e)   by
reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices; 

        (f)    any
mortgages, pledges or other security agreements permitted under the Indenture securing Indebtedness of the Company or a Restricted Subsidiary to the extent the
encumbrances or restrictions they contain restrict the transfer of the properties or assets subject to such mortgages, pledges or other security agreements; 

        (g)   purchase
money obligations for properties or assets acquired in the ordinary course of business and Capital Lease Obligations permitted under this Indenture, in each
case, that impose encumbrances or
restrictions of the nature described in clause (3) of the first paragraph of this Section 4.08 on the properties or assets so acquired; 

        (h)   any
encumbrance or restriction with respect to a Restricted Subsidiary (or any of its properties or assets) imposed pursuant to an agreement entered into for the direct
or indirect 

38

 

sale
or disposition of all or substantially all the Capital Stock or properties or assets of such Restricted Subsidiary (or the properties or assets that are subject to such restriction) pending the
closing of such sale or disposition; 

        (i)    customary
provisions in bona fide contracts for the sale of properties or assets; 

        (j)    customary
provisions in joint venture agreements and similar agreements that restrict the transfer of interests in the joint venture; 

        (k)   any
encumbrance or restriction applicable only to Vessel Financing Subsidiaries and/or Foreign Subsidiaries; or 

        (l)    Permitted
Refinancing Indebtedness with respect to any Indebtedness referred to in clauses (a), (b) and (d) above,  provided that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness being refinanced. 

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

        The
Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to (collectively, "incur" or an "incurrence") any Indebtedness, and the Company will not, and will not permit any Guarantor to, issue any
Disqualified Stock and the Company
will not permit any of its Restricted Subsidiaries that are not Guarantors to issue any shares of Preferred Stock; provided,  however, that so long as no
Default or Event of Default has occurred and is continuing the Company and any Guarantor may incur Indebtedness and issue
Disqualified Stock, if the Consolidated Interest Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred at the beginning of such four-quarter period. 

        The
foregoing provisions shall not apply to: 

        (1)   the
incurrence by the Company and its Restricted Subsidiaries of Indebtedness under the Credit Facilities in an aggregate principal amount at any one time outstanding
not to exceed the sum of (A) $100.0 million plus (B) 25% of any increase in Consolidated Net Tangible Assets from October 1, 2003 to the end of the latest fiscal quarter
for which financial statements are available plus (C) any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness; 

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

        (3)   the
incurrence by the Company and its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculation; 

39

 

        (4)   the
incurrence by the Company and its Restricted Subsidiaries of Indebtedness represented by the Notes (other than Additional Notes), the Subsidiary Guarantees thereof
and this Indenture; 

        (5)   guarantees
by the Guarantors of Indebtedness incurred in accordance with the provisions of the Indenture; 

        (6)   the
incurrence of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries, provided
that any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company, or any sale
or other transfer of any such Indebtedness to a Person that is neither the
Company nor a Restricted Subsidiary of the Company, shall be deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be;  provided,
however:

        (a)   if
the Company is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness is expressly subordinated to the prior payment in full in cash
of all obligations with respect to the Notes; 

        (b)   if
a Guarantor is the obligor on such Indebtedness and the Company or a Guarantor is not the obligee, such Indebtedness is expressly subordinated in right of payment to
the Subsidiary Guarantee of such Guarantor; 

        (7)   Indebtedness
in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary thereof in the ordinary course of
business, including, without limitation, guarantees or obligations of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety
obligations (in each case other than for an obligation for money borrowed); 

        (8)   the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to
extend, refinance, renew, replace, defease or refund, Indebtedness that was permitted by this Indenture to be incurred (other than pursuant to clause (1), (3), (5), (6), (7), (9), (11), (12),
(13) and (14) of this Section 4.09); 

        (9)   the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money
obligations with respect to assets (other than Capital Stock or other Investments except in the case where the issuer thereof will become a Restricted Subsidiary of the Company in connection with the
relevant transactions), in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvements of property used in the business of the Company
or such Restricted Subsidiary, in an aggregate principal amount (together with Permitted Refinancing Indebtedness incurred in exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund, such Indebtedness or any such Permitted Refinancing Indebtedness) not to exceed $20.0 million at any time outstanding; 

        (10) Indebtedness
of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness
in- 

40

 

curred
(a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided,  however,
that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional
Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the preceding paragraph after giving effect to the incurrence of such Indebtedness pursuant to this
clause (10); 

        (11) Indebtedness
arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary; 

        (12) Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts)
drawn against insufficient funds in the ordinary course of business, provided, however, that such
Indebtedness is extinguished within five business days of incurrence; 

        (13) Indebtedness
of the Company or any Restricted Subsidiary incurred to finance the replacement (through construction or acquisition) of one or more Vessels, upon a total
loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other involuntary taking of title to or use of such Vessel (provided
that such loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other involuntary taking of title to or use of such Vessel was covered by insurance or resulted in the
actual payment of compensation, indemnification or similar payments to such Person (collectively, a "Total Loss")) in an aggregate amount no greater than the Ready for Sea Cost for such replacement
Vessel, in each case less all compensation, damages and other payments (including insurance proceeds other than in respect of business interruption insurance) actually received by the Company or any
Restricted Subsidiary from any Person in connection with the Total Loss in excess of amounts actually used to repay Indebtedness secured by the Vessel subject to the Total Loss; and 

        (14) in
addition to the items referred to in clauses (1) through (13) above, Indebtedness of the Company and the Guarantors in an aggregate outstanding
principal amount which, when taken together with the principal amount of all other Indebtedness incurred pursuant to this clause (14) and then outstanding, will not exceed $25.0 million
at any one time outstanding. 

        The
Company shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such
Indebtedness) is subordinated to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantee of such Guarantor, as the case may be, to the same extent and in the same manner as such Indebtedness
is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be. 

        For
purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness incurred pursuant to and in compliance with this Section 4.09: 

41

 

        (15) in
the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in the first and second paragraphs of this
Section 4.09, the Company, in its sole discretion, will classify such item of Indebtedness on the date of incurrence (or later classify or reclassify such Indebtedness, in its sole discretion)
and only be required to include the amount and type of such Indebtedness in one of such clauses; 

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

        (17) the
principal amount of any Disqualified Stock of the Company or a Guarantor will be equal to the greater of the maximum mandatory redemption or repurchase price (not
including, in either case, any redemption or repurchase premium) or the liquidation preference thereof; 

        (18) Indebtedness
permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part
by one such provision and in part by one or more other provisions of this Section 4.09 permitting such Indebtedness; and 

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

        Accrual
of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of
additional shares of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09. The amount of any Indebtedness outstanding
as of any date shall be (a) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (b) the principal amount or liquidation preference thereof,
together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. 

        In
addition, the Company will not permit any of its Unrestricted Subsidiaries to incur any Indebtedness (other than Non-Recourse Debt) or issue any shares of Disqualified
Stock. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in Default of this Section 4.09). 

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

42

 

amount
of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company may incur pursuant to this
Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. 

Section 4.10    Limitation
on Asset Sales. 

        The
Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale (excluding for this purpose an Asset Sale connected with a Total Loss) unless: 

        (a)   the
Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value
(provided such Fair Market Value shall be determined on the date of contractually agreeing to such Asset Sale) of the assets or Equity Interests issued
or sold or otherwise disposed of; and 

        (b)   at
least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of Qualified Proceeds;  provided, however, that
the amount of (a) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Company or such Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or
any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further
liability shall be deemed to be cash for purposes of this Section 4.10 and (b) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such
transferee that are converted within 180 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion) shall be deemed to be cash for
purposes of this Section 4.10. 

        Within
365 days after the receipt of any Net Proceeds from an Asset Sale (including, without limitation, an Asset Sale connected with a Total Loss), the Company or any such
Restricted Subsidiary may apply such Net Proceeds to: 

        (1)   permanently
repay the principal of any Indebtedness of the Company or any Guarantor ranking in right of payment at least equally with the Notes or the Subsidiary
Guarantees, as the case may be; 

        (2)   to
the extent such Net Proceeds are derived from Asset Sales of properties or assets of a Restricted Subsidiary that is not a Guarantor, to repay the principal of any
Indebtedness of such Restricted Subsidiary; or 

        (3)   to
acquire (including by way of a purchase of assets or stock, merger, consolidation or otherwise) Productive Assets. 

Pending
the final application of any such Net Proceeds, the Company or any such Restricted Subsidiary may temporarily reduce outstanding revolving credit borrowings, including borrowings under the
Credit Facilities, or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph shall be deemed to constitute "Excess Proceeds." 

43

 

        On
the 366th day after the Asset Sale (or, at the Company's option, such earlier date), if the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will be
required to make an offer (an "Asset Sale Offer") pursuant to Section 3.09 hereof to all holders of Notes and to the extent required by the terms of other Pari Passu Indebtedness, to all
holders of other Pari Passu Indebtedness outstanding
with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale ("Pari Passu Notes"), to purchase the maximum principal
amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount of the Notes and Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, in accordance with the procedures set forth in
Section 3.09 hereof or the agreements governing the Pari Passu Notes, as applicable, in each case in integral multiples of $1,000. To the extent that the aggregate principal amount of Notes
tendered pursuant to an Asset Sale Offer is less than the amount that the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this
Indenture. If the aggregate principal amount of Notes surrendered by holders thereof and Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount that the Company is
required to repurchase, the Notes and Pari Passu Notes shall be purchased pro rata on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes. Upon completion of such offer
to purchase, the amount of Excess Proceeds shall be reset at zero. 

        If
the Asset Sale purchase date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest and Additional
Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no other interest will be payable to holders who tender Notes pursuant
to the Asset Sale Offer. 

        The
Company will 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 Notes pursuant to this Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.10, the Company will comply
with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue of any conflict. 

Section 4.11    Limitation
on Transactions with Affiliates. 

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

        (1)   such
Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary in arm's-length dealings with an unrelated Person or, if there is no such comparable transaction, on terms that are fair and
reasonable to the Company or such Restricted Subsidiary; and 

        (2)   the
Company delivers to the Trustee: 

44

 

        (a)   with
respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $7.5 million, a resolution of
the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (1) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors; and 

        (b)   with
respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, a written
opinion as to the fairness to the Company or the relevant Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm that is,
in the judgment of the Board of Directors, qualified to render such opinion and is independent with respect to the Company, 

provided, however, that the following shall be deemed not to be Affiliate Transactions: 

        (A)  any
employment agreement or other employee compensation plan or arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of
business of the Company or such Restricted Subsidiary; 

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

        (C)  Permitted
Investments and Restricted Payments that are permitted by the provisions of this Indenture; 

        (D)  loans
or advances to officers, directors and employees of the Company or any Restricted Subsidiary made in the ordinary course of business and consistent with past
practices of the Company and its Restricted Subsidiaries in an aggregate amount not to exceed $500,000 outstanding at any one time; 

        (E)  indemnities
of officers, directors and employees of the Company or any Restricted Subsidiary permitted by bylaw or statutory provisions; 

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

        (G)  the
sale or issuance to any Affiliate of any Equity Interests in the Company other than Disqualified Stock; and 

        (H)  the
payment of reasonable and customary fees or commissions to the Permitted Holders for investment banking or other financial services. 

Section 4.12    Limitation
on Liens. 

        The
Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien on any property or asset now
owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, except Permitted Liens, to secure (a) any Indebtedness of the Company,
unless prior to, or con- 

45

 

temporaneously
therewith, the Notes are equally and ratably secured, or (b) any Indebtedness of any Guarantor, unless prior to, or contemporaneously therewith, the Subsidiary Guarantee of such
Guarantor is equally and ratably secured; provided, however, that if such Indebtedness is expressly
subordinated to the Notes or a Subsidiary Guarantee, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the Notes or such Subsidiary Guarantee, as the case may
be, with the same relative priority as such Indebtedness has with respect to the Notes or such Subsidiary Guarantee. 

Section 4.13    Additional
Subsidiary Guarantees. 

        (a)   If,
after the Initial Issuance Date: 

        (1)   the
Company or any of its Restricted Subsidiaries shall acquire or create another Restricted U.S. Subsidiary other than a Vessel Financing Subsidiary, or 

        (2)   a
Restricted Subsidiary shall provide a guarantee of any Indebtedness of the Company or a Guarantor (other than Indebtedness under Credit Facilities), then such newly
acquired or created Restricted U.S. Subsidiary, in the case of clause (1) above, or such Restricted Subsidiary described in clause (2) above, in the case of clause (2) above,
shall execute a supplement to this Indenture substantially in the form of Annex A hereto providing for a Subsidiary Guarantee and deliver an Opinion of Counsel in accordance with the terms of
Section 9.06 of this Indenture. 

        (b)   Within
60 days of the Initial Issuance Date, the Company shall cause its Restricted Subsidiary, Seabulk Towing, Inc., a Delaware corporation ("Towing") to
either (1) remove or waive any restrictions imposed on Towing under the terms of any Indebtedness of Towing that would prevent Towing from becoming a Subsidiary Guarantor under this Indenture
or (2) redeem or otherwise retire such Indebtedness. As soon as practicable following the earlier of the actions described in (1) or (2) but in any event on or prior to
60 days of the Initial Issuance Date, Towing shall execute a supplement to this Indenture substantially in the form of Annex A hereto providing for its Subsidiary Guarantee and deliver an
Opinion of Counsel in accordance with the terms of Section 9.06 of this Indenture. 

Section 4.14    Corporate
Existence. 

        Except
as otherwise permitted pursuant to the terms hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate
existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with its respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary; provided, however, that the Company shall not be
required to preserve the existence of any of its Restricted Subsidiaries, 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 its Restricted Subsidiaries, taken as a whole and that the loss thereof is not adverse in any material respect to the Holders of the Notes. 

Section 4.15    Offer
To Repurchase Upon Change of Control. 

        (a)   Upon
the occurrence of a Change of Control, the Company shall make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of each Holder's Notes at an offer price in cash equal to 101% of the aggregate principal amount, plus 

46

 

accrued
and unpaid interest and Additional Interest, if any, to the date of repurchase (the "Change of Control Payment"). Within 30 days following a Change of Control, the Company shall mail a
notice to each Holder and the Trustee describing the transaction that constitutes the Change of Control and stating: 

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

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

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

        (4)   that,
unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest and Additional Interest, if any, after the Change of Control Payment Date; 

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

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

        (7)   that
Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof, and 

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

If
any of the Notes subject to a Change of Control Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the
Depository applicable to repurchases. Further, the Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes as a result of a Change of Control. 

47

 

        (b)   On
or before 11:00 a.m. New York time on the Change of Control Payment Date, the Company shall, to the extent lawful: 

        (1)   accept
for payment all Notes or portions thereof (in integral multiples of $1,000) properly tendered pursuant to the Change of Control Offer; 

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

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

The
Paying Agent shall promptly mail to each holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided,  however, that
each such new Note will be in a principal amount of $1,000 or an integral multiple of $1,000. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 

        (c)   The
Change of Control provisions described above shall be applicable whether or nor any other provisions of this Indenture are applicable. 

        (d)   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 time and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer. 

        (e)   To
the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its obligations described in this Indenture by virtue of the conflict. 

Section 4.16    No
Inducements. 

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

48

   ARTICLE 5 

SUCCESSORS

Section 5.01    Merger,
Consolidation, or Sale of Assets. 

        The
Company shall not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related transactions, to another Person, unless: 

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

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

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

        (d)   except
in the case of a merger of the Company with or into a Restricted Subsidiary of the Company, the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made will, at the time of such transaction and
after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Interest
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and 

        (e)   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 this Indenture. 

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

Section 5.02    Successor
Corporation Substituted. 

        Upon
any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole in accordance with Section 5.01 hereof, the successor corporation formed 

49

 

by
such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor corporation had
been named as the Company herein; and thereafter, if the Company is dissolved following a transfer of all or substantially all of its assets in accordance with this Indenture, the Company shall be
discharged and released from all obligations and covenants under this Indenture and the Notes. The Trustee shall enter into a supplemental indenture to evidence the succession and substitution of such
successor Person and such discharge and release of the Company. 

ARTICLE 6 

DEFAULTS
AND REMEDIES 

Section 6.01    Events
of Default. 

        An
"Event of Default" occurs if one of the following shall have occurred and be continuing: 

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

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

        (c)   the
Company fails for 30 days after notice to comply with the provisions of Section 4.10 (other than a failure to repurchase Notes when due), 4.15 or 5.01
hereof; 

        (d)   the
Company fails to comply with any other covenant or other agreement in this Indenture or the Notes for 60 days after notice to the Company by the Trustee or
the Holders of at least 25% in principal amount of the Notes then outstanding of such failure; 

        (e)   a
default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists or is created after the Initial Issuance Date, which default: 

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

        (2)   results
in the acceleration of such Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a Payment 

50

 

Default
or the maturity of which has been so accelerated, aggregates in excess of $20.0 million; and provided,  further, that if such default is cured or
waived or any such acceleration rescinded, or such Indebtedness is repaid, within a period of 10 days
from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, such Event of Default and any consequential acceleration of the
Notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree; 

        (f)    the
Company or any of its Restricted Subsidiaries fails to pay final judgments aggregating in excess of $20.0 million (net of any amounts that a reputable and
creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days; 

        (g)   any
Guarantor fails to perform any covenant set forth in its Subsidiary Guarantee or repudiates its obligations under its Subsidiary Guarantee, or any Subsidiary
Guarantee becomes unenforceable against a Guarantor for any reason; and 

        (h)   the
Company, any Guarantor or any Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law: 

        (i)    commences
a voluntary case, 

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

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

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

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

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

        (i)    is
for relief against the Company, any Guarantor or any Significant Subsidiary in an involuntary case; 

        (ii)   appoints
a Custodian of the Company, any Guarantor or any Significant Subsidiary or for all or substantially all of the property of the Company, or any Significant
Subsidiary; or 

        (iii)  orders
the liquidation of the Company, any Guarantor or any Significant Subsidiary; 

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

51

 

Section 6.02    Acceleration.

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

        If
an Event of Default occurs by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that
the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, an equivalent premium shall also become and be immediately due and payable
to the extent permitted by law upon the acceleration of the Notes. 

Section 6.03    Other
Remedies. 

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

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

Section 6.04    Waiver
of Past Defaults. 

        Holders
of a majority in principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of or premium, interest or Additional Interest, if any, on the Notes (including
in connection with an offer to purchase). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of
this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. 

Section 6.05    Control
by Majority. 

        Holders
of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may subject the Trustee to personal liability. 

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Section 6.06    Limitation
on Suits. 

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

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

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

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

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

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

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

Section 6.07    Rights
of Holders of Notes To Receive Payment. 

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

Section 6.08    Collection
Suit by Trustee. 

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

Section 6.09    Trustee
May File Proofs of Claim. 

        The
Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive 

53

 

and
distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents, counsel and advisors and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents, counsel and advisors and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any
Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 

Section 6.10    Priorities.

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

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

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

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

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

Section 6.11    Undertaking
for Costs. 

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

54

 
ARTICLE 7 

TRUSTEE 

Section 7.01    Duties
of Trustee. 

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

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

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

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

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

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

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

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

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

        (e)   No
provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any
of its rights and powers under this Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity satisfactory to it in its sole discretion (which
discretion shall be exercised in good faith) against any loss, liability or expense. 

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

55

 

Section 7.02    Rights
of Trustee. 

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

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

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

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

        (e)   Unless
otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the
Company. 

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

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

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

Section 7.03    Individual
Rights of Trustee. 

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

56

 

Section 7.04    Trustee's
Disclaimer. 

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

Section 7.05    Notice
of Defaults. 

        If
a Default or Event of Default occurs and is continuing and if it is known to the Trustee as provided in Section 7.02(g) hereof, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of or premium, if any, interest or
Additional Interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests
of the Holders of the Notes. 

Section 7.06    Reports
by Trustee to Holders of the Notes. 

        Within
60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail
to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2) and Section 313(b)(1). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c). 

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

Section 7.07    Compensation
and Indemnity. 

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

        The
Company and the Guarantors shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against
any claim (whether asserted by the Company, any Guarantor or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder,
except to the extent any such loss, liability or ex- 

57

 

pense
may be attributable to its negligence, bad faith or willful misconduct. 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 or the Guarantors of their obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel; provided that the Company will not be required to pay
such fees and expenses if it assumes the Trustee's defense with counsel acceptable to and approved by the Trustee (such approval not to be unreasonably withheld) and there is no conflict of interest
between the Company and the Trustee in connection with such defense. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The Company
need not reimburse the Trustee for any expense or indemnity against any liability or loss of the Trustee to the extent such expense, liability or loss is attributable to the negligence, bad faith or
willful misconduct of the Trustee. 

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

        To
secure the Company's payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee,
except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. 

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

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

Section 7.08    Replacement
of Trustee. 

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

        The
Trustee may resign in writing upon 60 days notice at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor trustee with the consent of the Company. The Company may remove the Trustee if: 

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

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

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

58

 

        (d)   the
Trustee becomes incapable of acting. 

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

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

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

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

Section 7.09    Successor
Trustee by Merger, etc. 

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

Section 7.10    Eligibility;
Disqualification. 

        There
shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least
$100 million as set forth in its most recent published annual report of condition. 

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

59

 

Section 7.11    Preferential
Collection of Claims Against Company. 

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

ARTICLE 8 

LEGAL
DEFEASANCE AND COVENANT DEFEASANCE 

Section 8.01    Option
to Effect Legal Defeasance or Covenant Defeasance. 

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

Section 8.02    Legal
Defeasance and Discharge. 

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

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

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Section 8.03    Covenant
Defeasance. 

        Upon
the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Article 4 (other than those in Sections 4.01, 4.02, 4.06 and 4.14) and in
clause (c) of Section 5.01 hereof on and after the date the conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be
deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that,
with respect to the outstanding Notes, the Company and any Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof, Sections 6.01(e) through 6.01(g) hereof shall not constitute Events of Default. 

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

Section 8.04    Conditions
to Legal or Covenant Defeasance. 

        In
order to exercise either Legal Defeasance or Covenant Defeasance: 

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

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

        (a)   the
Company has received from, or there has been published by, the Internal Revenue Service a ruling; or 

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

61

 

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

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

        (4)   no
Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence
of Indebtedness or the grant of Liens securing such Indebtedness, all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article 8 concurrently with such
incurrence or within 30 days thereof); 

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

        (6)   the
Company shall have delivered to the Trustee an Opinion of Counsel (which may be based on such solvency certificates or solvency opinions as counsel deems necessary
or appropriate) to the effect that the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; 

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

        (8)   the
Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating
to the Legal Defeasance or the Covenant Defeasance have been complied with. 

Section 8.05    Deposited
Money and Government Securities To Be Held in Trust; Other Miscellaneous Provisions. 

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

62

 

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

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

Section 8.06    Repayment
to Company. 

        Subject
to applicable escheat and abandoned property 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 premium, interest or Additional Interest, if any, on any Note and remaining unclaimed for two years after such principal, premium, interest or Additional Interest, if any, has become
due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a secured 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 the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid
to the Company. 

Section 8.07    Reinstatement.

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

Section 8.08    Discharge.

        If
(i) the Company shall deliver to the Trustee for cancellation all Notes theretofore authenticated and delivered (other than any Notes which shall have been destroyed, lost or
stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore cancelled, or (ii) all Notes not theretofore surrendered or
delivered to the Trustee for cancellation 

63

   
shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee,
and the Company shall irrevocably deposit with the Trustee, as trust funds solely for the benefit of the Holders for that purpose, an amount sufficient to pay at maturity or upon redemption all of the
Notes (other than any Notes which shall have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore
surrendered or delivered to the Trustee for cancellation, including principal, premium, if any, interest, Additional Interest, if any, due or to become due to such date of maturity or redemption date,
as the case may be, then this Indenture shall cease to be of further force or effect (except as to rights of registration of transfer or exchange of the Notes provided in this Indenture) and, at the
written request of the Company, accompanied by an Officers' Certificate and Opinion of Counsel, each stating that all conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with, and upon payment of the costs, charges and expenses incurred or to be incurred by the Trustee in relation thereto or in carrying out the provisions
of this Indenture, the Trustee shall satisfy and discharge this Indenture ("Discharge"). 

ARTICLE 9 

AMENDMENT,
SUPPLEMENT AND WAIVER 

Section 9.01    Without
Consent of Holders of Notes. 

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

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

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

        (c)   to
provide for the assumption of the Company's obligations to the Holders of Notes pursuant to Article 5 hereof; 

        (d)   to
secure the Notes pursuant to the requirements of Section 4.12 or otherwise; 

        (e)   to
make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any
Holder; 

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

        (g)   to
add additional Guarantors with respect to the Notes or to release any Guarantor from its Subsidiary Guarantee in accordance with Section 4.13 or
Article 10 hereof; or 

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

        Upon
the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the
Trus- 

64

 

tee
of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. 

Section 9.02    With
Consent of Holders of Notes. 

        Except
as provided below in this Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement this Indenture and the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a purchase of, tender offer or exchange offer for Notes). 

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

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

        After
an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture
or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in principal amount of the Notes then outstanding may waive compliance in a particular instance by the Company with any
provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a
non-consenting Holder): 

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

        (b)   reduce
the principal of or change the fixed maturity of any Note or alter any of the provisions with respect to the redemption or repurchase of the Notes (except as
provided in Sections 4.10 and 4.15 hereof); 

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

65

 

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

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

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

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

        (h)   make
any change in the ranking of the Notes or the Subsidiary Guarantees relative to other Indebtedness of the Company or the Guarantors, respectively, in either case in
a manner adverse to the Holders of Notes; 

        (i)    modify
the Subsidiary Guarantees in any manner adverse to the Holders of the Notes; or 

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

Section 9.03    Compliance
with Trust Indenture Act. 

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

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

Section 9.04    Revocation
and Effect of Consents. 

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

        The
Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons,
shall be enti- 

66

 

tled
to consent to such amendment or waiver or revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective
for more than 90 days after such record date except to the extent that the requisite number of consents to the amendment, supplement or waiver have been obtained within such 90-day
period or as set forth in the next paragraph of this Section 9.04. 

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

Section 9.05    Notation
on or Exchange of Notes. 

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

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

Section 9.06    Trustee
To Sign Amendments, etc. 

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

ARTICLE 10 

GUARANTEES
OF NOTES 

Section 10.01    Subsidiary
Guarantees. 

        Subject
to this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantee, on a senior unsecured basis, to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes held thereby and the Obligations of the
Company hereunder and
thereunder, that: (a) the principal of and premium, interest and Additional Interest, if any, on the Notes will be promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and premium, (to the extent permitted by law) interest and Additional Interest, if any, on the
Notes, and all other payment Obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, the same will be promptly paid in full 

67

 

when
due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration, redemption or otherwise. Failing
payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason the Guarantors will be jointly and severally obligated to pay the same immediately. An Event of
Default under this Indenture or the Notes shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the obligations of the Guarantors hereunder
in the same manner and to the same extent as the Obligations of the Company. 

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

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

        Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (a) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Article 6 hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations
guaranteed thereby, and (b) in the event of any declaration of acceleration of such Obligations as provided in Article 6 hereof, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purpose of its Subsidiary Guarantee. Each Guarantor that makes a payment under its Subsidiary Guarantee shall have the right, upon payment in
full of all guaranteed obligations under this Indenture, to seek a contribution from each other Guarantor in an amount equal to such other Guarantor's pro
rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP. 

Section 10.02    [Reserved] 

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

        (a)   Except
as set forth in Articles 4 and 5 hereof, nothing contained in this Indenture shall prohibit a merger between a Guarantor and another Guarantor or a merger between
a Guarantor and the Company. 

        (b)   No
Guarantor shall consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person (other than the Company or another
Guarantor), 

68

 

whether
or not affiliated with such Guarantor, unless, (i) subject to the provisions of Section 10.04 hereof, the Person formed by or surviving any such consolidation or merger (if other
than such Guarantor) assumes all the obligations of such Guarantor pursuant to a supplemental indenture, substantially in the form of Annex A hereto, under the Notes, this Indenture and the
Registration Rights Agreement and delivers an Opinion of Counsel in accordance with the terms of this Indenture; (ii) immediately after giving effect to such transaction, no Default or Event of
Default exists and (iii) no Default or Event of Default shall have occurred and be continuing. 

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

Section 10.04    Releases
Following Sale of Assets. 

        In
the event of a sale or other disposition (including by way of merger or consolidation) of all or substantially all of the assets or all of the Capital Stock of any Guarantor, then
such Guarantor shall be released and relieved of any obligations under its Subsidiary Guarantee; provided,  however, that in the event such transaction
constitutes an Asset Sale, the Net Proceeds from such sale or other disposition are treated in accordance
with the provisions of Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers' Certificate to the effect of the foregoing, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee. Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and premium, interest and Additional Interest, if any, on the Notes and for the other Obligations of such Guarantor under this
Indenture as provided in this Article 10. 

Section 10.05    Releases
Following Designation as an Unrestricted Subsidiary. 

        In
the event that the Company designates a Guarantor to be an Unrestricted Subsidiary, then such Guarantor shall be released and relieved of any obligations under its Subsidiary
Guarantee; provided, however, that such designation is conducted in accordance with this Indenture. 

Section 10.06    Limitation
on Guarantor Liability. 

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

69

 

Section 10.07    "Trustee"
To Include Paying Agent. 

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

ARTICLE 11 

MISCELLANEOUS

Section 11.01    Trust
Indenture Act Controls. 

        If
any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), such TIA-imposed duties shall control. 

Section 11.02    Notices.

        Any
notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing (in the English language) and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address: 

        If
to the Company or the Guarantors: 

Seabulk
International, Inc.

2200 Eller Drive

Post Office Box 13038

Ft. Lauderdale, Florida 33316

Attention: Chief Financial Officer

Fax No.: (954) 462-1459 

        with
a copy to: 

Vinson &
Elkins L.L.P.

2300 First City Tower

1001 Fannin Street

Houston, Texas 77022-6760

Fax No.: (713) 615-5962

Attention: James M. Prince, Esq. 

70

 

        and 

Vinson &
Elkins L.L.P.

2300 First City Tower

1001 Fannin

Houston, TX 77002

Fax No.: (713) 615-5306

Attention: C. Michael Harrington, Esq. 

        If
to the Trustee: 

Wachovia
Bank, National Association

225 Water Street

Jacksonville, Florida 32202

Fax No.: (904) 489-5410

Attention: Corporate Trust Administration 

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

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

        Any
notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery
to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. 

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

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

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

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

71

 

Section 11.04    Certificate
and Opinion as to Conditions Precedent. 

        Upon
any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: 

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

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

Section 11.05    Statements
Required in Certificate or Opinion. 

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

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

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

        (c)   a
statement that, in the opinion of such Person, he or she 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 satisfied; and 

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

Section 11.06    Rules
by Trustee and Agents. 

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

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

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

72

 

Section 11.08    Governing
Law. 

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

Section 11.09    No
Adverse Interpretation of Other Agreements. 

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

Section 11.10    Successors.

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

Section 11.11    Severability. 

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

Section 11.12    Table
of Contents, Headings, etc. 

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

Section 11.13    Counterparts.

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

[Signatures
on following page] 

73

 

	 	 	SIGNATURES
	

 	
 	

SEABULK INTERNATIONAL, INC.
	

 	
 	

By:	
 	

/s/ ALAN R. TWAITS
Name: Alan R. Twaits

Title: Senior Vice President, General Counsel and

          Secretary
	

 	
 	

LONE STAR MARINE SERVICES, INC.

SEABULK ARIZONA USA, INC.

SEABULK CHEMICAL CARRIERS, INC.

SEABULK MARINE INTERNATIONAL, INC.

SEABULK MARINE SERVICES, INC.

SEABULK OCEAN SYSTEMS CORPORATION

SEABULK OCEAN SYSTEMS HOLDINGS CORPORATION

SEABULK OFFSHORE ABU DHABI, INC.

SEABULK OFFSHORE DUBAI, INC.

SEABULK OFFSHORE INTERNATIONAL, INC.

SEABULK OFFSHORE OPERATORS, INC.

SEABULK OPERATORS, INC.

SEABULK TANKERS, INC.

SEABULK TOWING SERVICES, INC.

SEABULK TRANSMARINE II, INC.

SEABULK TRANSPORT, INC.
	

 	
 	

By:	
 	

/s/ ALAN R. TWAITS
Name: Alan R. Twaits

Title: Senior Vice President
	

 	
 	

SEABULK TANKERS, LTD.
	

 	
 	

By:	
 	

SEABULK TRANSPORT, INC.,

General Partner
	

 	
 	

By:	
 	

/s/ ALAN R. TWAITS
Name: Alan R. Twaits

Title: Senior Vice President
	 	 	 	 	 

74

 

	

 	
 	

SEABULK AMERICA PARTNERSHIP, LTD.

SEABULK OFFSHORE, LTD.

SEABULK TRANSMARINE PARTNERSHIP, LTD.
	

 	
 	

By:	
 	

SEABULK TANKERS, LTD.,

General Partner
	

 	
 	

By:	
 	

SEABULK TRANSPORT, INC.,

General Partner
	

 	
 	

By:	
 	

/s/ALAN R. TWAITS
 Name: Alan R. Twaits

Title: Senior Vice President
	

	
 	

 	
 	

 
	

 	
 	

WACHOVIA BANK, NATIONAL ASSOCIATION, as TRUSTEE
	

 	
 	

By:	
 	

/s/ TERENCE RAWLINS

 Name: Terence Rawlins

Title: Vice President

75

   RULE 144A/REGULATION S APPENDIX 

PROVISIONS RELATING TO INITIAL NOTES,

PRIVATE EXCHANGE NOTES

AND EXCHANGE NOTES 

1.    Definitions 

        1.1    Definitions.    

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

        "Clearstream" means Clearstream Banking, société anonyme, or any successor securities clearing agency. 

        "Depository"
means The Depository Trust Company, its nominees and their respective successors. 

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

        "Exchange
Notes" means (1) the 91/2% Senior Notes due 2013 issued pursuant to the Indenture in connection with a Registered Exchange Offer pursuant to a
Registration Rights Agreement and (2) Additional Notes, if any, issued pursuant to a registration statement filed with the SEC under the Notes Act. 

        "Initial
Purchasers" means (1) with respect to the Initial Notes issued on the Initial Issuance Date, Credit Suisse First Boston LLC, Banc of America Securities LLC, RBC Dominion
Securities Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated and (2) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes
under the related Purchase Agreement. 

        "Initial
Notes" means (1) $150 million aggregate principal amount of 91/2% Senior Notes due 2013 issued on the Initial Issuance Date and
(2) Additional Notes, if any, issued in a transaction exempt from the registration requirements of the Securities Act. 

        "Notes"
means the Initial Notes, the Additional Notes, the Exchange Notes and the Private Exchange Notes, treated as a single class. 

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

        "Private
Exchange" means the offer by the Company, pursuant to a Registration Rights Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange for
the Initial Notes held by the Initial Purchaser as part of its initial distribution, a like aggregate principal amount of Private Exchange Notes. 

App. - 1

 

        "Private
Exchange Notes" means any 91/2% Senior Notes due 2013 issued in connection with a Private Exchange. 

        "Purchase
Agreement" means (1) with respect to the Initial Notes issued on the Initial Issuance Date, the Purchase Agreement dated July 29, 2003 among the Company, the
Guarantors and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Company and the Persons purchasing
such Additional Notes. 

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

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

        "Registration
Rights Agreement" means (1) with respect to the Initial Notes issued on the Initial Issuance Date, the Registration Rights Agreement dated as of August 5,
2003 among the Company, the Guarantors and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of
the Securities Act, the registration rights agreement, if any, among the Company and the Persons purchasing such Additional Notes under the related Purchase Agreement. 

        "Securities
Act" means the Securities Act of 1933. 

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

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

        1.2    Other
Definitions.    

	Term

	 	Defined in Section:
	 
	"Agent Members"	 	2.1(b	)
	"Global Note"	 	2.1(a	)
	"Regulation D"	 	2.1(a	)
	Regulation S"	 	2.1(a	)
	Restricted Global Note"	 	2.1(a	)
	"Rule 144A"	 	2.1(a	)

2.    The
Notes. 

        2.1(a)    Form
and Dating.    Initial Notes offered and sold to a QIB in reliance on Rule 144A under the Securities Act
("Rule 144A"), Rule 144 under the Securities Act ("Rule 144"), Regulation S under the Securities Act ("Regulation S"), or in reliance on Regulation D under the
Securities Act ("Regulation D"), in each case as provided in a Purchase Agreement, and Private Exchange Notes, as 

App. - 2

 

provided
in a Registration Rights Agreement, shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form without interest coupons with the global
Notes legend and restricted Notes legend set forth in Exhibit 1 hereto (each, a "Restricted Global Note"), which shall be deposited on behalf of the purchasers of the Initial Notes represented
thereby with the Trustee, as custodian for the Depository (or with such other custodian as the Depository may direct), and registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter provided. Prior to the 40th day after the Initial Issuance Date, beneficial interests in the Restricted Global Note representing
Initial Notes sold in reliance on Regulation S may only be held through Euroclear, Clearstream or such other procedures as acceptable by DTC, and any resale or transfer of such interests to
U.S. persons (as defined in Regulation S) shall not be permitted during such period unless such resale or transfer is made pursuant to Rule 144, Rule 144A, Regulation D or
Regulation S. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided. Exchange Notes shall be issued in global form (with the global Notes legend set forth in Exhibit 1 hereto) or in certificated form as provided in
Section 2.4 of this Appendix. Exchange Notes issued in global form and Restricted Global Notes are sometimes referred to in this Appendix as "Global Notes". 

        (b)    Book-Entry
Provisions.    This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of
the Depository. 

        The
Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be
registered in the name of the Depository for such Global Note or Global Notes or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the Depository. 

        Members
of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by
the Trustee as the custodian of the Depository or under such Global Note, and the 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 Note 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 Note. 

        (c)    Certificated
Notes.    Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests
in Restricted Global Notes shall not be entitled to receive physical delivery of certificated Notes. 

        2.2    Authentication.    The
Trustee shall authenticate and deliver: (1) on the Initial Issuance Date, an aggregate principal
amount of $150 million 91/2% Senior Notes due 2013, (2) any Additional Notes 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 and (3) Exchange Notes or Private Exchange Notes for issue only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to a Registration Rights Agreement, for a like principal amount of Initial Notes, 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 

App. - 3

 

Secretary
of the Company. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance
of Additional Notes pursuant to Section 2.13 of the Indenture, shall certify that such issuance is in compliance with Section 4.03 of the Indenture. 

        2.3    Transfer
and Exchange.    

        (a)    Transfer
and Exchange of Global Notes.    (i) The transfer and exchange of Global Notes or beneficial interests therein
shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Note shall deliver to the Registrar a written order given in accordance with the Depository's procedures containing information regarding the
participant account of the Depository to be credited with a beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions instruct the Depository to credit to the
account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note
being transferred. 

         (ii)  Notwithstanding
any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole
except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such successor Depository. 

        (iii)  In
the event that a Restricted Global Note is exchanged for Notes in certificated registered form pursuant to Section 2.4 of this Appendix, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such
transfers comply with Rule 144A, Rule 144, Regulation D or Regulation S, as the case may be) and such other procedures as may from time to time be adopted by the Company. 

        (b)    Legend.    

          (i)  Except
as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Restricted Global Notes (and all Notes issued in
exchange therefor or in substitution thereof) shall bear a legend in substantially the following form: 

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

App. - 4

 

THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (V) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" ("IAI") WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN IAI, IN EACH CASE, IN A TRANSACTION INVOLVING A MINIMUM PURCHASE PRICE OF $250,000
FOR SUCH SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (VI) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. 

         (ii)  Upon
any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Restricted Global Note) pursuant to
Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer Restricted Security for a certificated Note that does not bear the legend set
forth above and rescind any restriction on the transfer of such Transfer Restricted Security, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in
reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note). 

        (iii)  After
a transfer of any Initial Notes or Private Exchange Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect
to such Initial Notes or Private Exchange Notes, as the case may be, all requirements pertaining to legends on such Initial Note or such Private Exchange Note will cease to apply, the requirements
requiring any such Initial Note or such Private Exchange Note issued to certain Holders be issued in global form will cease to apply, and a certificated Initial Note or Private Exchange Note or an
Initial Note or Private Exchange Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the Holder of such Initial Notes or Private Exchange
Notes upon exchange of such transferring Holder's certificated Initial Note or Private Exchange Note or directions to transfer such Holder's interest in the Global Note, as applicable. 

        (iv)  Upon
the consummation of a Registered Exchange Offer with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form will
be available to Holders that exchange such Initial Notes in such Registered Exchange Offer. 

App. - 5

 

         (v)  Upon
the consummation of a Private Exchange with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain
Holders be issued in global form will still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Private Exchange Notes in global form with the global
Notes legend and the Restricted Notes legend set forth in Exhibit 1 hereto will be available to Holders that exchange such Initial Notes in such Private Exchange. 

        (c)    Cancellation
or Adjustment of Global Note.    At such time as all beneficial interests in a Global Note have either been exchanged
for certificated Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be
reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes
Custodian, to reflect such reduction. 

        (d)    Obligations
with Respect to Transfers and Exchanges of Notes.    

          (i)  To
permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate certificated Notes and Global Notes at the Registrar's
or co-registrar's request. 

         (ii)  No
service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax,
assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.06, 4.10, 4.15 and 9.05 and of the Indenture). 

        (iii)  The
Registrar or co-registrar shall not be required to register the transfer of or exchange of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding interest payment date. 

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

         (v)  All
Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this
Indenture as the Notes surrendered upon such transfer or exchange. 

App. - 6

 

        (e)    No
Obligation of the Trustee.    

          (i)  The
Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with
respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to
any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such
Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders
(which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable
rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any
beneficial owners. 

         (ii)  The
Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than
to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine
the same to determine substantial compliance as to form with the express requirements hereof. 

        2.4    Certificated
Notes.    

        (a)   A
Global Note deposited with the Depository or with the Trustee as custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial
owners thereof in the form of certificated Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies
with Section 2.3 and (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Note or if at any time such Depository ceases to be
a "clearing agency" registered under the Exchange Act and in either event a successor depositary is not appointed by the Company within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing and DTC notifies the Trustee of its decision to exchange the Global Notes, or (iii) the Company, in its sole discretion, notifies the Trustee in writing
that it elects to cause the issuance of certificated Notes under this Indenture. 

        (b)   Any
Global Note that is transferable to the beneficial owners thereof pursuant to this Section shall be surrendered by the Depository or the Notes Custodian to the
Trustee located at its Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Note, an equal aggregate principal amount of certificated Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 principal amount and any integral multiple thereof and registered in such names as the Depository shall direct. Any certificated Note or
Private Exchange Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(b), bear the restricted Notes legend set forth in
Exhibit 1 hereto. 

App. - 7

 

        (c)   Subject
to the provisions of Section 2.4(b), the Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes. 

        (d)   In
the event of the occurrence of any of the events specified in Section 2.4(a), the Company shall promptly make available to the Trustee a reasonable supply of
certificated Notes in definitive, fully registered form without interest coupons. 

App. - 8

   EXHIBIT 1 TO RULE 144A/REGULATION S APPENDIX 

[FORM OF FACE OF INITIAL NOTE] 

[Global
Notes Legend] 

        UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO 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 NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS
OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. 

[Restricted Notes Legend] 

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

        THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY,
(II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (V) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" ("IAI") WITHIN THE MEANING OF SUBPARAGRAPH (A) (1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN IAI, IN EACH CASE, IN A TRANSACTION INVOLVING A MINIMUM PURCHASE
PRICE OF $250,000 FOR SUCH SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH 

Ex. 1 to App. - 1

 

ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. 

Ex. 1 to App. - 2

 

	No.	 	$
	

 	
 	

CUSIP No.

ISIN No.

91/2% Senior Note due 2013 

        Seabulk
International, Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of            Dollars on August 15,
2013 [or such greater or lesser amount as may be indicated on Schedule A hereto].1 

Interest
Payment Dates: February 15 and August 15 

Record
Dates: February 1 and August 1. 

Additional
provisions of this Note are set forth on the other side of this Note. 

Dated:

 

	 	 	SEABULK INTERNATIONAL, INC.
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Name:

Title:

TRUSTEE'S
CERTIFICATE OF AUTHENTICATION 

WACHOVIA
BANK, NATIONAL ASSOCIATION,

    as Trustee, certifies that this is one of

    the Notes referred to in the Indenture. 

	By	 	 
	 	 	
 Authorized Signatory

 

 

	1
	If
this Note is a Global Note, add this provision. 

Ex. 1 to App. - 3

 
[FORM OF REVERSE SIDE OF INITIAL NOTE]

91/2% Senior Note due 2013 

        Capitalized
terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 

        (A)    Interest.    Seabulk International, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 91/2% per annum from August 5, 2003 until maturity and shall pay the Additional Interest payable
pursuant to Section 6 of the Registration Rights Agreement referred to below. The Company will pay interest and Additional Interest, if any, semi-annually in arrears on
February 15 and August 15 of each year, commencing February 15, 2004, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance;  provided that if there is no
existing Default or Event of Default in the payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of
Notes, in which case interest shall accrue from the date of authentication. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate that is the rate then in effect; it shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 

        (B)    Method of Payment.    The Company will pay interest on the Notes (except defaulted
interest) and Additional Interest to the Persons who are registered Holders of Notes at the close of business on the February 1 or August 1 next preceding the Interest Payment Date, even
if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.11 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium, if any, interest and Additional Interest, if any, at the office or agency of the Company maintained for such purpose within the City and State of New York,
or, at the option of the Company, payment of interest and Additional Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that
payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest on all Global Notes and all other Notes the Holders
of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. 

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

        (D)    Indenture.    The Company issued the Notes under an Indenture dated as of
August 5, 2003 ("Indenture") among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference 

Ex. 1 to App. - 4

 

to
the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Notes are senior unsecured obligations of the Company limited to $150,000,000 aggregate principal amount in the case of Notes issued on the
Initial Issuance Date (as defined in the Indenture). 

        (E)    Optional Redemption.    

        (i)    Except
as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to
August 15, 2008. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month
period beginning on June 15 of the years indicated below: 

	Year
 
	 	Percentage

	2008	 	104.750%
	2009	 	103.167%
	2010	 	101.583%
	2011 and thereafter	 	100.000%

        (ii)   Notwithstanding
the provisions of subparagraph (a) of this Paragraph 5, at any time on or prior to August 15, 2006, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued at a redemption price of 109.50% of the principal amount thereof, plus accrued and unpaid
interest and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings; provided
that (i) at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued remains outstanding immediately after the occurrence of each such redemption and
(ii) each such redemption occurs within 90 days of the date of the closing of each such Qualified Equity Offering. 

        (iii)  Prior
to August 15, 2008, the Company may at its option redeem all, in whole or in part, of the Notes at a redemption price equal to 100% of the principal
amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the redemption date. 

        (F)    Mandatory Redemption.    Except as set forth in paragraph 7
below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or repurchase the Notes at the option of the Holder. 

        (G)    Repurchase at Option of Holder.    

        (i)    Upon
the occurrence of a Change of Control, the Company shall make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days follow- 

Ex. 1 to App. - 5

 

ing
a Change of Control, the Company shall mail a notice to each Holder describing the transaction that constitutes the Change of Control and setting forth the procedures governing the Change of
Control Offer as required by Section 4.15 of the Indenture. 

        (ii)   On
the 366th day after an Asset Sale, if the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall commence an offer to all Holders of
Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness
outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds
from any Asset Sale ("Pari Passu Notes"), to purchase the maximum principal amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes and other Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, thereon
to the date of purchase, in accordance with the procedures set forth in the Indenture or agreements governing the Pair Passu Notes, as applicable. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than the amount the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by the
Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to
repurchase, the Notes and Pari Passu Notes shall be purchased pro rata (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased) on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes. Holders of Notes that are the subject of an offer to purchase will receive
an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Notes. 

        (H)    Notice of Redemption.    Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest and Additional Interest, if any, cease to
accrue on Notes or portions thereof called for redemption. 

        (I)    Denominations, Transfer, Exchange.    The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also,
it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding
Interest Payment Date. 

Ex. 1 to App. - 6

 

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

        (K)    Amendment, Supplement and Waiver.    Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide
for the assumption of the Company's obligations to Holders of the Notes pursuant to Article 5 of the Indenture, to secure the Notes pursuant to Section 4.12 of the Indenture or
otherwise, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such
Holder, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to add any additional Guarantor with respect to the Notes or to release any
Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, or to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act. 

        (L)    Defaults and Remedies.    Events of Default include: (i) default for
30 days in the payment when due of interest or Additional Interest, if any, on the Notes; (ii) default in payment when due of the principal of or premium, if any, on the Notes when due
at Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (iii) failure by the Company to comply for 30 days after notice with
Section 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes;
(v) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the
Initial Issuance Date, which default (a) is caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such
Indebtedness, including any extension thereof (a "Payment Default") or (b) results in the acceleration of such Indebtedness prior to its Stated Maturity and, in each case, the principal amount
of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in
excess of $20.0 million, and provided, further, that if such default is cured or waived or any
such acceleration rescinded, or such Indebtedness is repaid within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such
acceleration, as the case may be, an Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as said rescission does not conflict with any judgment
or decree; (vi) failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $20.0 million (net of any amounts that a reputable and
creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days; (vii) failure by any Guarantor to
perform any covenant set forth in its Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations under its Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee
against a Guarantor for any reason; and (viii) certain events of bankruptcy, insolvency or reorganization with respect to the Company, any Guarantor or any Signifi- 

Ex. 1 to App. - 7

 

cant
Subsidiary as specified in Section 6.01(h) or 6.01(i) of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the preceding, in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary described in Section 6.01(h) or 6.01(i) of the Indenture, all outstanding Notes will
become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power conferred on it. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, interest, premium or Additional Interest) if it determines that withholding notice is
in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of the principal of or premium, interest or Additional Interest, if
any, on the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and, so long as any Notes are outstanding, the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 

        (M)    Defeasance and Discharge.    The Notes are subject to defeasance and discharge
upon the terms and conditions specified in the Indenture. 

        (N)    Trustee Dealings with Company.    The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 

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

        (P)    Authentication.    This Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee or an authenticating agent. 

        (Q)    Abbreviations.    Customary abbreviations may be used in the name of a Holder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act). 

        (R)    Additional Rights of Holders of Transfer Restricted Securities.    In addition to
the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Securities shall have all the rights set forth in the Registration Rights Agreement dated as of
August 5, 2003, among the Company, the Guarantors and the Initial Purchasers named on the signature page thereof (the "Registration Rights Agreement"). 

Ex. 1 to App. - 8

 

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

        (T)    Governing Law.    THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

        (U)    Successor Corporation.    In the event a successor assumes all the obligations of
the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations. 

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

Seabulk
International, Inc.

2200 Eller Drive

Post Office Box 13038

Ft. Lauderdale, Florida 33316

Attention: Chief Financial Officer

Fax No: (954) 462-1459 

Ex. 1 to App. - 9

   ASSIGNMENT FORM  

                        To
assign this Note, fill in the form below: 

                        I
or we assign and transfer this Note to 

                                        
                                          
                                         
                                          
                      

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

                                        
                                          
                                         
                                          
                      

(Insert assignee's soc. sec. or tax I.D. No.) 

and
irrevocably appoint                                  agent to transfer this Note on
the books of the 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 Note.

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the
Notes Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Notes are being transferred in accordance with its terms: 

	

CHECK ONE BOX BELOW
	

(1)	
 	

o	
 	

to the Company; or
	

(2)	
 	

o	
 	

pursuant to an effective registration statement under the Securities Act of 1933; or
	

(3)	
 	

o	
 	

inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
	

(4)	
 	

o	
 	

outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933;
	

(5)	
 	

o	
 	

to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933), that has furnished to the Trustee a signed letter containing certain representations and agreements (the form
of which letter appears in Exhibit 1 to App. to the Indenture); or
	

(6)	
 	

o	
 	

pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933.

Ex. 1 to App. - 10

 

Unless
one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof;  provided, however, that if box (4), (5) or (6) is checked, the Trustee shall be entitled
to require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act. 

	 	 	
 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. 

Ex. 1 to App. - 11

 

TO
BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED. 

The
undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account
is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. 

	
	 	 
	

 Dated:	
 	

 Notice: To be executed by an executive officer

Ex. 1 to App. - 12

 

TO BE COMPLETED BY PURCHASER IF (5) ABOVE IS CHECKED. 

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR 

Seabulk
International, Inc.

2200 Eller Drive

Post Office Box 13038

Ft. Lauderdale, Florida 33316 

Wachovia
Bank, National Association

225 Water Street

Jacksonville, Florida 32202

Attention: Corporate Trust Administration 

	Re:
	91/2%
Senior Notes due 2013 

        Reference
is hereby made to the Indenture, dated as of August 5, 2003 (the "Indenture"), among Seabulk International, Inc.,
as issuer (the "Company"), the Guarantors named on the signature pages thereto and Wachovia Bank, National Association, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the Indenture. 

        In
connection with our proposed purchase of $                         aggregate principal amount of: 

        (a)   o    a
beneficial interest in a Global Note, or 

        (b)   o    a
Definitive Note, 

we
confirm that: 

        1.     We
understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act
of 1933, as amended (the "Securities Act"). 

        2.     We
understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (I) to the Company, (II) in the United States to a person whom the seller reasonably believes is a Qualified Institutional Buyer (as defined in
rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (III) outside the United States in an offshore transaction in accordance with
Rule 904 under the Securities Act, (IV) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), (V) to an
Institutional "Accredited Investor" ("IAI") within the meaning of subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act that is purchasing for its own
account or for the account of such an IAI, in each case, in a transaction involving a 

Ex. 1 to App. - 13

 

minimum
purchase price of $250,000 for such securities, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act, or
(VI) pursuant to an effective registration statement under the Securities Act, in each of cases (I) through (VI) in accordance with any applicable securities laws of any state of
the United States, and (b) the Holder will, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting
the requirements of clauses (I) through (VI) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 

        3.     We
understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased
by us will bear a legend to the foregoing effect. 

        4.     We
are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting
are each able to bear the economic risk of our or its investment. 

        5.     We
are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion. 

        You
and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby. 

	 	 	

	 	 	 	 	[Insert Name of Accredited Investor]
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Name:

Title:

	Dated:	 	 
	 	 	

Ex. 1 to App. - 14

 
OPTION OF HOLDER TO ELECT PURCHASE 

        If
you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below: 

	 	 	o	 	Section 4.10	 	o	 	Section 4.15

	        If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount
(in minimum denomination of $1,000 or integral multiples thereof) you elect to have purchased:
$                             

	Date:	 	 	 	Your Signature:	 	 
	 	 	
	 	 	 	
 (Sign exactly as your name appears on the Note)

	
 	
 	

 	
 	

Soc. Sec. or Tax Identification No.:	
 	

 
	 	 	 	 	 	 	

	
 	
 	

 	
 	

Signature Guarantee:	
 	

 
	 	 	 	 	 	 	

	 	 	

	 	 

Ex. 1 to App. - 15

   SCHEDULE A 

[TO BE ATTACHED TO GLOBAL NOTE] 

SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL NOTE 

        The
following increases or decreases in this Global Note have been made: 

	Date

	 	Amount of

decrease in

Principal Amount

of this Global

Note
	 	Amount of

increase in

Principal Amount

of this Global

Note
	 	Principal Amount

of this Global

Note following

such decrease or

increase
	 	Signature of

authorized officer

of Trustee or

Notes Custodian

	

	 	 	 	 	 	 	 	 

Ex. 1 to App. - 16

 
EXHIBIT A TO RULE 144A/REGULATION S APPENDIX 

[FORM OF FACE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE]*/**/ 

	*/
	If
the Note is to be issued in global form add the Global Notes Legend from Exhibit 1 to Rule 144A/Regulation S Appendix and the attachment from such
Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL NOTES]—SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE".

	**/
	If
the Note is a Private Exchange Note issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Notes Legend from
Exhibit 1 to Rule 144A/Regulation S Appendix and replace the Assignment Form included in this Exhibit A with the Assignment Form included in such Exhibit 1. 

All
references to "Additional Interest" in the note shall be deleted unless if at the date of issuance of the Exchange Note or Private Exchange Note (as the case may be) any Registration Default (as
defined in the Registration Rights Agreement) has occurred with respect to the related Initial Notes during the interest period in which such date of issuance occurs. 

Ex. A to App. - 1

 
[FORM OF FACE OF EXCHANGE NOTE OR

PRIVATE EXCHANGE NOTE] 

	No.	 	$
	

 	
 	

CUSIP No.

ISIN No.

91/2% Senior Note due 2013 

        Seabulk
International, Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of            Dollars on August 15,
2013 [or such greater or lesser amount as may be indicated on Schedule A hereto].2 

Interest
Payment Dates: February 15 and August 15. 

Record
Dates: February 1 and August 1. 

Additional
provisions of this Note are set forth on the other side of this Note. 

	Dated:	 	 	 	 
	

 	
 	

SEABULK INTERNATIONAL, INC.
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Name:

Title:

 

	

TRUSTEE'S CERTIFICATE OF AUTHENTICATION	
 	

 
	

WACHOVIA BANK, NATIONAL ASSOCIATION,	
 	

 
	as Trustee, certifies that

this is one of the Notes

referred to in the Indenture.	 	 
	

By:	
 	

 	
 	

 
	 	 	
 Authorized Signatory	 	 

 

 

 
 

	2
	If
this Note is a Global Note, add this provision. 

Ex. A to App. - 2

 
[FORM OF REVERSE SIDE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE] 

91/2% Senior Note due 2013 

        Capitalized
terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 

        1.    Interest.    Seabulk International, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 91/2% per annum from August 5, 2003 until maturity and shall pay the Additional Interest payable
pursuant to Section 6 of the Registration Rights Agreement referred to below. The Company will pay interest and Additional Interest, if any, semi-annually in arrears on
February 15 and August 15 of each year, commencing February 15, 2004, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance;  provided that if there is no
existing Default or Event of Default in the payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of
Notes, in which case interest shall accrue from the date of authentication. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate that is the rate then in effect; it shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 

        2.    Method of Payment.    The Company will pay interest on the Notes (except defaulted
interest) and Additional Interest to the Persons who are registered Holders of Notes at the close of business on the February 1 or August 1 next preceding the Interest Payment Date, even
if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.11 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium, if any, interest and Additional Interest, if any, at the office or agency of the Company maintained for such purpose within the City and State of New York,
or, at the option of the Company, payment of interest and Additional Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that
payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest on all Global Notes and all other Notes the Holders
of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. 

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

        4.    Indenture.    The Company issued the Notes under an Indenture dated as of
August 5, 2003 ("Indenture") among the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. The Notes are sen- 

Ex. A to App. - 3

 

ior
unsecured obligations of the Company limited to $150,000,000 aggregate principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the Indenture). 

        5.    Optional Redemption.    

        (a)   Except
as set forth in subparagraphs (b) and (c) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to
August 5, 2008. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month
period beginning on June 15 of the years indicated below: 

	YEAR
 
	 	PERCENTAGE

	2008	 	104.750%
	2009	 	103.167%
	2010	 	101.583%
	2011 and thereafter	 	100.000%

        (b)   Notwithstanding
the provisions of subparagraph (a) of this Paragraph 5, at any time on or prior to August 15, 2006, the Company may on one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued at a redemption price of 109.50% of the principal amount thereof, plus accrued and unpaid
interest and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings; provided
that (i) at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued remains outstanding immediately after the occurrence of each such redemption and
(ii) each such redemption occurs within 90 days of the date of the closing of each such Qualified Equity Offering. 

        (c)   Prior
to August 15, 2008, the Company may at its option redeem all, in whole or in part, of the Notes at a redemption price equal to 100% of the principal amount
of the Notes plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the redemption date. 

        6.    Mandatory Redemption.    Except as set forth in paragraph 7
below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or repurchase the Notes at the option of the Holder. 

        7.    Repurchase at Option of Holder.    

        (a)   Upon
the occurrence of a Change of Control, the Company shall make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following a Change of Control, the Company shall mail a notice to each Holder describing the transaction that constitutes the Change of Control
and setting forth the procedures governing the Change of Control Offer as required by Section 4.15 of the Indenture. 

        (b)   On
the 366th day after an Asset Sale, if the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall commence an offer to all Holders of
Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness
outstanding with similar provisions requiring 

Ex. A to App. - 4

 

the
Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale ("Pari Passu Notes"), to purchase the maximum principal amount of Notes and any such Pair
Passu Notes to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes and other
Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture or agreements governing
the Pair Passu Notes, as applicable. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount the Company is required to repurchase, the
Company may use any remaining Excess Proceeds for any purpose not prohibited by the Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and Pari Passu Notes
surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Notes and Pari Passu Notes shall be purchased pro rata (with such adjustments as may be
deemed appropriate by the Trustee so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased) on the basis of the aggregate principal amount of tendered Notes and
Pari Passu Notes. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes. 

        8.    Notice of Redemption.    Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date
interest and Additional Interest, if any, cease to accrue on Notes or portions thereof called for redemption. 

        9.    Denominations, Transfer, Exchange.    The Notes are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also,
it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding
Interest Payment Date. 

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

        11.    Amendment, Supplement and Waiver.    Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide
for the assumption of the Company's obligations to Holders of the Notes pursuant to Article 5 of the Indenture, to secure the Notes pursuant to Section 4.12 of the Indenture or
otherwise, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such
Holder, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to add any additional Guarantor with respect to the Notes or to re- 

Ex. A to App. - 5

 

lease
any Guarantor from its Subsidiary Guarantee, in each case as provided in the Indenture, or to comply with the requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act. 

        12.    Defaults and Remedies.    Events of Default include: (i) default for
30 days in the payment when due of interest or Additional Interest, if any, on the Notes; (ii) default in payment when due of the principal of or premium, if any, on the Notes when due
at Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise; (iii) failure by the Company to comply for 30 days after notice with Section 4.10, 4.15 or 5.01 of the Indenture;
(iv) failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes; (v) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the Initial Issuance Date, which default (a) is
caused by a failure to pay principal of or premium or interest on such Indebtedness prior to the expiration of any grace period provided in such Indebtedness, including any extension thereof (a
"Payment Default") or (b) results in the acceleration of such Indebtedness prior to its Stated Maturity and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of $20.0 million, and  provided,
further, that if such default is cured or waived or any such acceleration rescinded, or such
Indebtedness is repaid within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, an Event
of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as said rescission does not conflict with any judgment or decree; (vi) failure by the
Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $20.0 million (net of any amounts that a reputable and creditworthy insurance company has
acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days; (vii) failure by any Guarantor to perform any covenant set forth in
its Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations under its Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee against a Guarantor for any reason;
and (viii) certain events of bankruptcy, insolvency or reorganization with respect to the Company, any Guarantor or any Significant Subsidiary as specified in Section 6.01(h) or
6.01(i) of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the preceding, in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization respecting the
Company or any Significant Subsidiary described in Section 6.01(h) or 6.01(i) of the Indenture, all outstanding Notes will become due and payable without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power conferred on it. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal, interest, premium or Additional Interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment of the principal of or premium, interest or Additional Interest, if any, on the Notes. The Company is required to deliver to
the Trustee annually a statement regarding compliance with the Indenture, and, so long as any Notes are outstanding, the Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default. 

Ex. A to App. - 6

 

        13.    Defeasance and Discharge.    The Notes are subject to defeasance and discharge
upon the terms and conditions specified in the Indenture. 

        14.    Trustee Dealings with Company.    The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 

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

        16.    Authentication.    This Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee or an authenticating agent. 

        17.    Abbreviations.    Customary abbreviations may be used in the name of a Holder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act). 

        18.    [Additional Rights of Holders of Transfer Restricted Securities.    In
addition to the rights provided to Holders of Notes under the Indenture, Holders of Transfer Restricted Securities shall have all the rights set forth in the Registration Rights Agreement dated as of
August 5, 2003, among the Company, the Guarantors and the Initial Purchasers named on the signature page thereof (the "Registration Rights Agreement").]3 

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

        20.    Governing Law.    THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

        21.    Successor Corporation.    In the event a successor assumes all the obligations of
the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations. 

 
 

	3
	Delete
if this Note is not being issued in exchange for an Initial Note. 

Ex. A to App. - 7

 

        The
Company will furnish to any Holder upon written request and without charge a copy of the Indenture [and/or the Registration Rights Agreement]4.
Requests may be made to: 

Seabulk
International, Inc.

2200 Eller Drive

Post Office Box 13038

Ft. Lauderdale, Florida 33316

Attention: Chief Financial Officer

Fax No: (954) 462-1459 

 

 

 

 

 

 

 

 

 
 

	4
	Delete
if this Note is not being issued in exchange for an Initial Note. 

Ex. A to App. - 8

 
ASSIGNMENT FORM 

                        To
assign this Note, fill in the form below: 

                        I
or we assign and transfer this Note to 

                                        
                                          
                                         
                                          
                      

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

                                        
                                          
                                         
                                          
                      

(Insert assignee's soc. sec. or tax I.D. No.) 

and
irrevocably appoint                                  agent to transfer this Note on
the books of the 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 Note.

Ex. A to App. - 9

 
SCHEDULE A 

[TO BE ATTACHED TO GLOBAL NOTE] 

SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL NOTE 

The
following increases or decreases in this Global Note have been made: 

	Date

	 	Amount of

decrease in

Principal Amount

of this Global

Note
	 	Amount of

increase in

Principal Amount

of this Global

Note
	 	Principal Amount

of this Global

Note following

such decrease or

increase
	 	Signature of

authorized officer

of Trustee or

Notes Custodian

	

	 	 	 	 	 	 	 	 

Ex. A to App. - 10

 
OPTION OF HOLDER TO ELECT PURCHASE 

        If
you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below: 

o 

	        If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount
(in minimum denomination of $1,000 or integral multiples thereof) you elected to have purchased:
$                             

	Date:	 	 	 	Your Signature:	 	 
	 	 	
	 	 	 	
 (Sign exactly as your name appears on the Note)

	
 	
 	

 	
 	

Soc. Sec. or Tax Identification No.:	
 	

 
	 	 	 	 	 	 	

 

	Signature Guarantee:	 	 	 	 
	 	 	
 (Signature must be Guaranteed)	 	 

        Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. 

Ex. A to App. - 11

 
EXHIBIT B TO RULE 144A/REGULATION S APPENDIX 

FORM OF NOTATION OF GUARANTEE  

        For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the
extent set forth in the Indenture and subject to the provisions in the Indenture dated as of August 5, 2003 (the "Indenture") among Seabulk
International, Inc. ("Company"), the Guarantors thereto and Wachovia Bank, National Association, as trustee (the
"Trustee"), (a) the due and punctual payment of the principal of, premium, if any, and interest and Additional Interest, if any, on the Notes (as
defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful,
and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee. 

	[NAME OF GUARANTORS]
	

By:	
 	

 
	 	 	
 Name:

Title:

Ex. B to App. - 1

   ANNEX A 

                                        
                                          
                   
 

SEABULK INTERNATIONAL, INC. 

And 

the
Guarantors named herein 

                                        
                                          
                   
 

91/2% SENIOR NOTES DUE 2013 

                                        
                                          
                   

                                        
             
 

FORM
OF SUPPLEMENTAL

INDENTURE AND AMENDMENT—SUBSIDIARY GUARANTEE 

DATED
AS OF                         ,          

                                        
             

WACHOVIA BANK, NATIONAL ASSOCIATION 

Trustee

                                        
             

A-1

 

        This
SUPPLEMENTAL INDENTURE, dated as of
                                  ,
             is among Seabulk International, Inc., a Delaware corporation (the "Company"), each of the parties identified under the caption "Guarantors" on the
signature page hereto (the "Guarantors") and Wachovia Bank, National Association, as Trustee. 

RECITALS 

        WHEREAS,
the Company, the initial Guarantors and the Trustee entered into an Indenture, dated as of August 5, 2003 (the "Indenture"), pursuant to which the Company has issued
$150,000,000 in principal amount of 91/2% Senior Notes due 2013 (the "Notes"); and 

        WHEREAS,
Section 9.01(g) of the Indenture provides that the Company, the Guarantors and the Trustee may amend or supplement the Indenture in order to comply with
Section 4.13 or 10.02 thereof, without the consent of the Holders of the Notes; and 

        WHEREAS,
all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Company, of the
Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Guarantors and the Trustee, in accordance with its terms, have been
duly done and performed; 

        NOW,
THEREFORE, to comply with the provisions of the Indenture and in consideration of the above premises, the Company, the Guarantors and the Trustee covenant and agree for the equal
and proportionate benefit of the respective Holders of the Notes as follows: 

ARTICLE 1 

        Section 1.01.
This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as
part of, the Indenture for any and all purposes. 

        Section 1.02.
This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Company, the Guarantors and the Trustee. 

ARTICLE 2 

        From
this date, in accordance with Section 4.13 or 10.02 and by executing this Supplemental Indenture, the Guarantors whose signatures appear below are subject to the provisions
of the Indenture to the extent provided for in Article 10 thereunder. 

ARTICLE 3 

        Section 3.01.
Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and
effect in accordance with their terms with all capitalized terms used herein without definition having the same respective meanings ascribed to them as in the Indenture. 

        Section 3.02.
Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason
of this Supple- 

A-2

 

mental
Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those
terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto. 

        Section 3.03.
THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

        Section 3.04.
The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies together shall
represent the same agreement. 

[NEXT
PAGE IS SIGNATURE PAGE] 

A-3

 

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

	 	 	SEABULK INTERNATIONAL, INC.
	

 	
 	

By	
 	

 
	 	 	 	 	
 Name:

Title:

	

 	
 	

GUARANTORS	
 	

 
	

 	
 	

[	
 	

 	
 	

]
	 	 	 	 	
	 	 

	

 	
 	

By	
 	

 
	 	 	 	 	
 Name:

Title:
	

 	
 	

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Trustee
	

 	
 	

By	
 	

 
	 	 	 	 	
 Name:

Title:

A-4

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