Document:

Exhibit 10.33

 

ELEVENTH AMENDMENT TO

REVOLVING LOAN AGREEMENT

 

THIS ELEVENTH AMENDMENT TO REVOLVING LOAN AGREEMENT
(this “Amendment”), dated as of the 5th day of June, 2006, is made by and
between KMG-BERNUTH, INC., a Delaware
corporation (the “Borrower”), and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association (successor by merger to
SouthTrust Bank, the successor by conversion to SouthTrust Bank, National
Association, and formerly known as SouthTrust Bank of Alabama, National
Association) (the “Bank”).  Except as
otherwise herein specifically provided, all capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed to them in
the Loan Agreement As Amended (as hereinafter defined).

 

W I T N E S S E T H :

 

WHEREAS, the Borrower and the Bank entered
into a Revolving Loan Agreement dated August 1, 1996 (the “Loan Agreement”);
and

 

WHEREAS, pursuant to that certain First
Amendment to Revolving Loan Agreement dated effective as of December 31, 1996
(the “First Amendment”), the Bank and Borrower amended the Loan Agreement to
extend the Revolving Loan Termination Date until November 30, 1998; and

 

WHEREAS, pursuant to that certain Second
Amendment to Revolving Loan Agreement dated effective as of September 1, 1997
(the “Second Amendment”), the Bank and Borrower further amended the Loan
Agreement to extend the Revolving Loan Termination Date until January 15, 1999;
and

 

WHEREAS, pursuant to that certain Third
Amendment to Revolving Loan Agreement dated effective as of December 31, 1997
(the “Third Amendment”), the Bank and Borrower further amended the Loan
Agreement to, among other things, extend the Revolving Loan Termination Date
until January 15, 2000, and to acknowledge the Bank’s release of the Guaranty;
and

 

WHEREAS, pursuant to that certain Fourth
Amendment to Revolving Loan Agreement dated effective as of June 26, 1998 (the “Fourth
Amendment”), the Bank and Borrower further amended the Loan Agreement in order
to amend certain financial covenants contained in the Loan Agreement; and

 

WHEREAS, pursuant to that certain Fifth
Amendment to Revolving Loan Agreement dated effective as of January 15, 1999
(the “Fifth Amendment”), the Bank and Borrower further amended the Loan
Agreement to extend the Revolving Loan Termination Date until January 31, 2001,
and to reduce the amount of the Loan Fee payable by Borrower to Bank; and

 

WHEREAS, pursuant to that certain Sixth
Amendment to Revolving Loan Agreement dated effective as of January 31, 2000
(the “Sixth Amendment”), the Bank and Borrower further amended the Loan
Agreement to extend the Revolving Loan Termination Date until January 31, 2003;
and

 

 

WHEREAS, pursuant to that certain Seventh
Amendment to Revolving Loan Agreement dated effective as of January 31, 2001 (the
“Seventh Amendment”), the Bank and Borrower further amended the Loan Agreement
to increase the amount of the Revolving Loan Commitment from $2,500,000.00 to
$3,500,000.00 and to extend the Revolving Loan Termination Date until January
31, 2004; and

 

WHEREAS, pursuant to that certain Eighth
Amendment to Revolving Loan Agreement dated effective as of July 31, 2002 (the “Eighth
Amendment”), the Bank and Borrower further amended the Loan Agreement to extend
the Revolving Loan Termination Date until January 31, 2005; and

 

WHEREAS, pursuant to that certain Ninth
Amendment to Revolving Loan Agreement dated effective as of December 14, 2004
(the “Ninth Amendment”) the Bank and Borrower further amended the Loan
Agreement to increase the amount of the Revolving Loan Commitment from
$3,500,000.00 to $5,000,000.00 and to extend the Revolving Loan Termination
Date until December 31, 2007; and

 

WHEREAS, pursuant to that certain Tenth
Amendment to Revolving Loan Agreement dated effective as of June 7, 2005 (the “Tenth
Amendment”), the Bank and Borrower further amended the Loan Agreement to amend
certain of the financial covenants (the Loan Agreement as amended by the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the
Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth
Amendment, the Ninth Amendment, and the Tenth Amendment being hereinafter
referred to as the “Loan Agreement As Amended”); and

 

WHEREAS, the Borrower desires, and the Bank
has agreed, to further modify the Loan Agreement As Amended in order to amend
certain covenants of Borrower, all as more specifically hereinafter set forth.

 

NOW, THEREFORE, the Borrower and the Bank
hereby modify the Loan Agreement As Amended as follows:

 

1.                                       Section
6.2(M) of the Loan Agreement as Amended is hereby deleted in its entirety.

 

2.                                       Borrower
represents and warrants to the Bank that as of the date hereof:  (a) all representations and warranties given
by the Borrower in Article V of the Loan Agreement As Amended are true and correct,
except to the extent affected by this Amendment; and (b) the Borrower is in
full compliance with all of the covenants of the Borrower contained in Article
VI of the Loan Agreement As Amended, except to the extent affected by this
Amendment.  The Borrower further
represents that the Borrower has full power and authority to enter into this
Amendment and to consummate the transactions contemplated hereby, and the
Borrower agrees to pay directly, or reimburse the Bank for, all reasonable
expenses, including the reasonable fees and expenses of legal counsel, incurred
in connection with the preparation of the documentation to evidence this
Amendment and any other documents executed in connection herewith or in
furtherance hereof.

 

2

 

3.                                       Except
as may be modified or waived by the Bank, in its sole discretion, the
effectiveness of this Amendment shall be subject to full and complete
satisfaction of the following conditions:

 

(a)                                  Payment
of Fees and Expenses.  Bank shall
have received from Borrower payment of any Loan Fee and any and all other fees
and expenses required by the Loan Agreement As Amended, as further amended by
this Amendment, and any of the other Loan Documents then due.

 

(b)                                 Additional
Documentation.  The Bank shall have
received such additional documentation as may be requested by the Bank, or its
counsel, to satisfy the Bank that this Amendment and each of the documents to
be delivered pursuant hereto or in connection herewith have been duly authorized,
executed and delivered on behalf of the Borrower and constitute the valid and
binding obligations of the Borrower.

 

4.                                       The
parties hereby agree that (a) except as herein expressly modified or as may be
modified or amended by any document executed concurrently herewith, all of the
terms, conditions, obligations and provisions of the Loan Agreement As Amended
and each of the other Loan Documents shall be and remain in full force and
effect, and the same are hereby ratified and confirmed in all respects, except
that, to the extent that there shall be any conflict between the terms of this
Amendment and any of the terms of any of the other Loan Documents not modified
or amended concurrently herewith, the terms and provisions of this Amendment
shall govern and each of such other Loan Documents are deemed automatically
amended and modified without any further action upon the execution and delivery
of this Amendment; and (b) on and after the effective date of this Amendment,
each reference in the Loan Agreement As Amended to “this Agreement”, “hereunder”,
“hereof”, “herein”, or words of like import referring to the Loan Agreement,
and each reference to the “Agreement”, the “Loan Agreement”, the “Revolving
Loan Agreement”, “thereunder”, “thereof”, “therein”, or words of like import
intending to refer to the Loan Agreement in the Revolving Note or any of the
other Loan Documents shall mean and be a reference to the Loan Agreement As
Amended, as hereby and hereafter further amended.

 

SIGNATURES
FOLLOW ON NEXT PAGE

 

3

 

IN WITNESS WHEREOF, the parties hereto have
executed this Amendment effective as of the date first above written.

 

	
  WITNESSES: 

  	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ John Leatherwood, Jr.

  	
   

  	
  By:

  	
  /s/ Alan T. Drennen, III

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  John Leatherwood, Jr.

  	
   

  	
  Print Name:

  	
  Alan T. Drennen, III

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KMG-BERNUTH, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Amy Carpenter

  	
   

  	
  By:

  	
  /s/ John V. Sobchak

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  Amy Carpenter

  	
   

  	
  Print Name: 

  	
  John V. Sobchak

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its: 

  	
  Chief Financial Officer

  
						

 

4Exhibit 4.1

 

 

 

Pogo Producing Company

 

7.875%
Senior Subordinated Notes due 2013

 

 

Indenture

 

dated
as of June 6, 2006

 

 

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

 

as
Trustee

 

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I

  
	
   

  
	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  
	
   

  
	
  Section 1.1

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
  Other Definitions

  	
  34

  
	
  Section 1.3

  	
  Incorporation by Reference of Trust Indenture Act

  	
  34

  
	
  Section 1.4

  	
  Rules of Construction

  	
  35

  
	
   

  
	
  ARTICLE
  II

  
	
   

  
	
  THE
  SECURITIES

  
	
   

  
	
  Section 2.1

  	
  Form and Dating

  	
  36

  
	
  Section 2.2

  	
  Execution and Authentication

  	
  37

  
	
  Section 2.3

  	
  Registrar and Paying Agent

  	
  38

  
	
  Section 2.4

  	
  Paying Agent To Hold Money in Trust

  	
  38

  
	
  Section 2.5

  	
  Holder Lists

  	
  39

  
	
  Section 2.6

  	
  Transfer and Exchange

  	
  39

  
	
  Section 2.7

  	
  Replacement Securities

  	
  47

  
	
  Section 2.8

  	
  Outstanding Securities

  	
  47

  
	
  Section 2.9

  	
  Temporary Securities

  	
  48

  
	
  Section 2.10

  	
  Cancellation

  	
  48

  
	
  Section 2.11

  	
  Defaulted Interest

  	
  48

  
	
  Section 2.12

  	
  CUSIP Numbers

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  
	
   

  
	
  REDEMPTION

  
	
   

  
	
  Section 3.1

  	
  Notices to Trustee

  	
  49

  
	
  Section 3.2

  	
  Selection of Securities To Be Redeemed

  	
  49

  
	
  Section 3.3

  	
  Notice of Redemption

  	
  50

  
	
  Section 3.4

  	
  Effect of Notice of Redemption

  	
  51

  
	
  Section 3.5

  	
  Deposit of Redemption Price

  	
  51

  
	
  Section 3.6

  	
  Securities Redeemed in Part

  	
  51

  
	
  Section 3.7

  	
  Optional Redemption

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  
	
   

  
	
  COVENANTS

  
	
   

  
	
  Section 4.1

  	
  Payment of Securities

  	
  52

  
	
  Section 4.2

  	
  SEC Reports

  	
  53

  
	
  Section 4.3

  	
  Limitation on Indebtedness

  	
  54

  

 

i

 

	
  Section 4.4

  	
  Limitation on Restricted Payments

  	
  57

  
	
  Section 4.5

  	
  Limitation on Layering

  	
  60

  
	
  Section 4.6

  	
  Limitation on Liens

  	
  60

  
	
  Section 4.7

  	
  Limitation on Restrictions on Distributions from Restricted
  Subsidiaries

  	
  61

  
	
  Section 4.8

  	
  Limitation on Sales of Assets and Subsidiary Stock

  	
  62

  
	
  Section 4.9

  	
  Limitation on Affiliate Transactions

  	
  65

  
	
  Section 4.10

  	
  Limitation on Sale of Capital Stock of Restricted Subsidiaries

  	
  67

  
	
  Section 4.11

  	
  Future Subsidiary Guarantees

  	
  67

  
	
  Section 4.12

  	
  Maintenance of Properties; Insurance

  	
  67

  
	
  Section 4.13

  	
  Payments for Consent

  	
  68

  
	
  Section 4.14

  	
  Change of Control

  	
  68

  
	
  Section 4.15

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

  	
  69

  
	
  Section 4.16

  	
  Appointment to Fill a Vacancy in the Office of Trustee

  	
  70

  
	
  Section 4.17

  	
  Provision as to Paying Agent

  	
  70

  
	
  Section 4.18

  	
  Maintenance of Corporate Existence

  	
  70

  
	
  Section 4.19

  	
  Compliance Certificate

  	
  70

  
	
  Section 4.20

  	
  Taxes

  	
  71

  
	
  Section 4.21

  	
  Stay, Extension and Usury Laws

  	
  71

  
	
  Section 4.22

  	
  Further Instruments and Acts

  	
  71

  
	
  Section 4.23

  	
  Effectiveness of Covenants

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  
	
   

  
	
  SUCCESSOR
  COMPANY

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Merger and Consolidation

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  
	
   

  
	
  DEFAULTS
  AND REMEDIES

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Events of Default

  	
  72

  
	
  Section 6.2

  	
  Acceleration of Maturity; Rescission and Annulment

  	
  75

  
	
  Section 6.3

  	
  Other Remedies

  	
  75

  
	
  Section 6.4

  	
  Waiver of Past Defaults

  	
  75

  
	
  Section 6.5

  	
  Control by Majority

  	
  76

  
	
  Section 6.6

  	
  Limitation on Suits

  	
  76

  
	
  Section 6.7

  	
  Rights of Holders to Receive Payment

  	
  76

  
	
  Section 6.8

  	
  Collection Suit by Trustee

  	
  77

  
	
  Section 6.9

  	
  Trustee May File Proofs of Claim

  	
  77

  
	
  Section 6.10

  	
  Priorities

  	
  77

  
	
  Section 6.11

  	
  Undertaking for Costs

  	
  77

  

 

ii

 

	
  ARTICLE
  VII

  
	
   

  
	
  TRUSTEE

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Duties of Trustee

  	
  78

  
	
  Section 7.2

  	
  Rights of Trustee

  	
  79

  
	
  Section 7.3

  	
  Individual Rights of Trustee

  	
  80

  
	
  Section 7.4

  	
  Trustee’s Disclaimer

  	
  80

  
	
  Section 7.5

  	
  Notice of Defaults

  	
  80

  
	
  Section 7.6

  	
  Reports by Trustee to Holders

  	
  80

  
	
  Section 7.7

  	
  Compensation and Indemnity

  	
  81

  
	
  Section 7.8

  	
  Replacement of Trustee

  	
  82

  
	
  Section 7.9

  	
  Successor Trustee by Merger

  	
  82

  
	
  Section 7.10

  	
  Eligibility; Disqualification

  	
  83

  
	
  Section 7.11

  	
  Preferential Collection of Claims Against Company

  	
  83

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  
	
   

  
	
  DISCHARGE
  OF INDENTURE; DEFEASANCE

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Discharge of Liability on Securities; Defeasance

  	
  83

  
	
  Section 8.2

  	
  Conditions to Defeasance

  	
  85

  
	
  Section 8.3

  	
  Application of Trust Money

  	
  86

  
	
  Section 8.4

  	
  Repayment to Company

  	
  86

  
	
  Section 8.5

  	
  Indemnity for U.S. Government Obligations

  	
  86

  
	
  Section 8.6

  	
  Reinstatement

  	
  86

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  
	
   

  
	
  AMENDMENTS

  
	
  Section 9.1

  	
  Without Consent of Holders

  	
  87

  
	
  Section 9.2

  	
  With Consent of Holders

  	
  88

  
	
  Section 9.3

  	
  Compliance with Trust Indenture Act

  	
  89

  
	
  Section 9.4

  	
  Revocation and Effect of Consents and Waivers

  	
  89

  
	
  Section 9.5

  	
  Notation on or Exchange of Securities

  	
  89

  
	
  Section 9.6

  	
  Trustee To Sign Amendments

  	
  90

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X

  
	
   

  
	
  SUBORDINATION
  OF SECURITIES

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Securities Subordinate to Senior Indebtedness

  	
  90

  
	
  Section 10.2

  	
  Liquidation, Dissolution and Bankruptcy of Company

  	
  90

  
	
  Section 10.3

  	
  Suspension of Payment When Designated Senior Indebtedness in Default

  	
  91

  
	
  Section 10.4

  	
  Subrogation to Rights of Holders of Senior Indebtedness

  	
  92

  

 

iii

 

	
  Section 10.5

  	
  Provisions Solely to Define Relative Rights

  	
  92

  
	
  Section 10.6

  	
  Trustee to Effectuate Subordination

  	
  93

  
	
  Section 10.7

  	
  No Waiver of Subordination Provisions

  	
  93

  
	
  Section 10.8

  	
  Notice to Trustee

  	
  93

  
	
  Section 10.9

  	
  Reliance on Judicial Order or Certificate of Liquidating Agent

  	
  94

  
	
  Section 10.10

  	
  Trustee Not Fiduciary for Holders of Senior Indebtedness

  	
  94

  
	
  Section 10.11

  	
  Rights of Trustee as Holder of Senior Indebtedness; Preservation of
  Trustee’s Rights

  	
  94

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI

  
	
   

  
	
  SUBSIDIARY
  GUARANTEE

  
	
   

  
	
  Section 11.1

  	
  Subsidiary Guarantee

  	
  95

  
	
  Section 11.2

  	
  Limitation on Liability

  	
  96

  
	
  Section 11.3

  	
  Execution and Delivery of Notation of Subsidiary Guarantee

  	
  97

  
	
  Section 11.4

  	
  Successors and Assigns; Releases

  	
  97

  
	
  Section 11.5

  	
  No Waiver

  	
  98

  
	
  Section 11.6

  	
  Right of Contribution

  	
  98

  
	
  Section 11.7

  	
  No Subrogation

  	
  98

  
	
  Section 11.8

  	
  Modification

  	
  99

  
	
  Section 11.9

  	
  Subordination

  	
  99

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  
	
  Section 12.1

  	
  Trust Indenture Act Controls

  	
  99

  
	
  Section 12.2

  	
  Notices

  	
  99

  
	
  Section 12.3

  	
  Communication by Holders with other Holders

  	
  100

  
	
  Section 12.4

  	
  Certificate and Opinion as to Conditions Precedent

  	
  100

  
	
  Section 12.5

  	
  Statements Required in Certificate or Opinion

  	
  100

  
	
  Section 12.6

  	
  When Securities Disregarded

  	
  101

  
	
  Section 12.7

  	
  Legal Holidays

  	
  101

  
	
  Section 12.8

  	
  Governing Law

  	
  101

  
	
  Section 12.9

  	
  No Personal Liability of Directors, Officers, Employees and
  Shareholders

  	
  101

  
	
  Section 12.10

  	
  Successors

  	
  102

  
	
  Section 12.11

  	
  Multiple Originals; Counterparts

  	
  102

  
	
  Section 12.12

  	
  Severability

  	
  102

  
	
  Section 12.13

  	
  Consent to Jurisdiction

  	
  102

  
	
  Section 12.14

  	
  Table of Contents; Headings

  	
  102

  
	
  Section 12.15

  	
  No Adverse Interpretation of Other Agreements

  	
  102

  

 

iv

 

EXHIBITS AND
SCHEDULE

 

	
  Exhibit A – Form
  of Note

  	
  A-1

  
	
  Exhibit B – Form of Certificate of Transfer

  	
  B-1

  
	
  Exhibit C – Form
  of Certificate of Exchange

  	
  C-1

  
	
  Exhibit D – Form
  of Certificate From Acquiring Institutional Accredited Investor

  	
  D-1

  
	
  Exhibit E – Form
  of Notation of Subsidiary Guarantee

  	
  E-1

  
	
  Exhibit F – Form
  of Supplemental Indenture to be Delivered by Future Subsidiary Guarantors

  	
  F-1

  
	
   

  	
   

  
	
  Schedule I - Cash Equivalent Investments

  	
  I-1

  

 

v

 

This Indenture, dated as of June 6,
2006, is between Pogo Producing Company, a Delaware corporation (the “Company”),
and The Bank of New York Trust Company, N.A., a national banking association,
as trustee (the “Trustee”).

 

Each party
agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of the Company’s 7.875% Senior Subordinated
Notes due 2013 issued on the date hereof (the “Initial
Securities”), the Holders of Additional Securities (as defined
herein) and, if and when issued in exchange for the Initial Securities or any
Additional Securities as provided in a Registration Rights Agreement (as
hereinafter defined), the Company’s 7.875% Senior Subordinated Notes due 2013
provided in exchange for such Initial Securities or Additional Securities (as
defined herein):

 

ARTICLE I

DEFINITIONS AND INCORPORATION BY
REFERENCE

 

Section 1.1                                      Definitions

 

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

 

“2011 Notes” means the 8.25% Senior
Subordinated Notes due 2011 of the Company outstanding on the Issue Date.

 

“2015 Notes” means the 6.625% Senior
Subordinated Notes due 2015 of the Company outstanding on the Issue Date.

 

“2017 Notes” means the 7.875% Senior
Subordinated Notes due 2017 of the Company outstanding on the Issue Date.

 

“ACNTA” means
(without duplication), as of the date of determination:

 

(1)                                  the
sum of:

 

(a)                                  discounted
future net revenue from proved crude oil and natural gas reserves of the
Company and its Restricted Subsidiaries calculated in accordance with SEC
guidelines before any state, federal or foreign income or similar taxes, as
estimated in a reserve report prepared as of the end of the Company’s most
recently completed fiscal year, which reserve report is prepared or reviewed by
independent petroleum engineers, as increased by, as of the date of
determination, the discounted future net revenue of

 

(i)                                     estimated
proved crude oil and natural gas reserves of the Company and its Restricted
Subsidiaries attributable to

 

 

acquisitions consummated since the date of such
year-end reserve report, and

 

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

 

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

 

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

 

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

 

in each case calculated in accordance with SEC
guidelines (utilizing the prices utilized in such year-end reserve report); provided, however, that,
in the case of each of the determinations made pursuant to clauses (i) through
(iv), such increases and decreases shall be as estimated by the Company’s
engineers, except that if as a result of such acquisitions, dispositions,
discoveries, extensions or revisions, there is a Material Change which is an
increase, then such increases and decreases in the discounted future net
revenue shall be confirmed in writing by an independent petroleum engineer;

 

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

 

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

 

2

 

(d)                                 the
greater of (I) the net book value on a date no earlier than the date of the
Company’s latest annual or quarterly financial statements and (II) the
appraised value, as estimated by independent appraisers, of other tangible
assets of the Company and its Restricted Subsidiaries as of a date no earlier
than the date of the Company’s latest audited financial statements; minus

 

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

 

(a)                                  minority
interests;

 

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

 

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

 

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

 

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

 

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

 

“Acquired Indebtedness”
means Indebtedness (i) of a Person or any of its Subsidiaries existing at the
time such Person becomes a Restricted Subsidiary or (ii) assumed in connection
with the acquisition of assets from such Person, in each case whether or not
Incurred by such

 

3

 

Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary or such acquisition. 
Acquired Indebtedness shall be deemed to have been Incurred, with
respect to clause (i) of the preceding sentence, on the date such Person
becomes a Restricted Subsidiary and, with respect to clause (ii) of the
preceding sentence, on the date of consummation of such acquisition of assets.

 

“Additional Assets” means:

 

(1)                                  any
long-term property or assets (other than Indebtedness and Capital Stock) to be
used by the Company or a Restricted Subsidiary in the Oil and Gas Business;

 

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

 

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

 

(4)                                  the
development, exploration or exploitation of Oil and Gas Properties;

 

provided, however, that, in the case of clauses (2) and (3), such
Restricted Subsidiary is primarily engaged in the Oil and Gas Business.

 

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

 

“Affiliate”
of any specified Person means any other Person, directly or indirectly,
controlling or controlled by or under direct or indirect common control with
such specified Person. For 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; provided,
however, that beneficial ownership of 10% or more of the Voting
Stock of a Person shall be deemed to be control.  No Person shall be deemed an Affiliate of an
oil and gas royalty trust solely by virtue of ownership of units of beneficial
interest in such trust.

 

“Agent” means any Registrar, Paying Agent,
authenticating agent or agent for service of notices and demands.

 

“Applicable Premium” means, with respect to
a Security at any time, the greater of (1) 1.0% of the principal amount of such
Security at such time and (2) the excess, if any, of (A) the present value at
such time of (i) the principal amount of such Security plus (ii) any required
interest payments due on such Security through May 1, 2010, computed using
a discount rate equal to the Treasury Rate plus 50 basis points, discounted
semi-annually over (B) the principal amount of such Security.

 

4

 

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

 

“Asset Disposition”
means any direct or indirect sale, lease (other than an operating lease entered
into in the ordinary course of business), transfer, issuance or other
disposition, or a series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan, of Capital Stock of a Subsidiary
(other than directors’ qualifying shares), property or other assets (each
referred to for the purposes of this definition as a “disposition”) by the
Company or any of its Restricted Subsidiaries, including any disposition by
means of a merger, consolidation or similar transaction.

 

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

 

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

 

(2)                                  the
disposition of cash, Cash Equivalents, Hedging Obligations and other financial
instruments and rights in respect of a Production Payment, in each case in the
ordinary course of business;

 

(3)                                  a
disposition of obsolete or worn out equipment or equipment that is no longer
useful in the conduct of the business of the Company and its Restricted
Subsidiaries and that is disposed of in each case in the ordinary course of
business;

 

(4)                                  transactions
permitted under Section 5.1;

 

(5)                                  an
issuance of Capital Stock by a Restricted Subsidiary to the Company or to a
Wholly-Owned Subsidiary;

 

(6)                                  for
purposes of Section 4.8 only, the making of a Permitted Investment or a
disposition of an asset that is permitted by Section 4.4;

 

(7)                                  an
Asset Swap effected in compliance with Section 4.8, other than Section
4.8(a)(2);

 

(8)                                  dispositions
of assets in a single transaction or series of related transactions with an
aggregate Fair Market Value in any calendar year of less than $40 million;

 

(9)                                  dispositions
consisting of the creation of Permitted Liens;

 

(10)                            dispositions
of receivables in connection with the compromise, settlement or collection thereof
in the ordinary course of business or in bankruptcy or similar proceedings and
exclusive of factoring or similar arrangements;

 

5

 

(11)                            the
abandonment, assignment, lease, sublease or farm-out of Oil and Gas Properties,
or the forfeiture or other disposition of such properties pursuant to standard
form operating agreements, in each case in the ordinary course of business in a
manner that is customary in the Oil and Gas Business;

 

(12)                            any
disposition of inventory, Hydrocarbons or other mineral products in the
ordinary course of business;

 

(13)                            the
licensing or sublicensing of intellectual property or other general intangibles
and licenses, leases or subleases of other property; and

 

(14)                            foreclosure
on assets.

 

“Asset Swap”
means the substantially concurrent purchase and sale of Property between the
Company or any of its Restricted Subsidiaries and another Person; provided, however,
that any cash received must be applied in accordance with Section 4.8.

 

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

 

“Average Life”
means, as of the date of determination, with respect to any Indebtedness or
Preferred Stock, the quotient obtained by dividing (1) the sum of the products
of the numbers of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount
of such payment by (2) the sum of all such payments.

 

“Bank Indebtedness”
means any and all amounts, whether outstanding on the Issue Date or Incurred
after the Issue Date, payable by the Company under or in respect of a Credit
Facility, and any related notes, collateral documents, letters of credit and
guarantees and any Interest Rate Agreement entered into in connection with such
credit agreements, including principal, premium, if any, interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company at the rate specified therein whether or
not a claim for post filing interest is allowed in such proceedings), fees, charges,
expenses, reimbursement obligations, guarantees and all other amounts payable
thereunder or in respect thereof.

 

6

 

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

 

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

 

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

 

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

 

“Capitalized Lease
Obligations” means an obligation that is required to be classified
and accounted for as a capitalized lease for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligation will be the capitalized amount of such obligation at the time any
determination thereof is to be made as determined in accordance with GAAP, and
the Stated Maturity thereof will be the date of the last payment of rent or any
other amount due under such lease prior to the first date such lease may be
terminated without penalty.

 

“Cash Equivalents” means:

 

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

 

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

 

(3)                                  certificates
of deposit, time deposits, eurodollar time deposits, overnight bank deposits or
bankers’ acceptances having maturities of not more than one year from the date
of acquisition thereof issued by any commercial bank party to a Credit Facility
or the long-term debt of which is rated at the time of acquisition thereof at
least “A” or the equivalent thereof by S&P, “A” or the equivalent thereof
by Moody’s or “B” or the equivalent thereof by Thompson Bank Watch Rating;

 

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

 

7

 

(5)                                  commercial
paper rated at the time of acquisition thereof at least “A-1” or the equivalent
thereof by S&P or “P-1” or the equivalent thereof by Moody’s or carrying an
equivalent rating by another nationally recognized rating agency if both of the
two named rating agencies cease publishing ratings of investments, and in any
case maturing within one year after the date of acquisition thereof;

 

(6)                                  interests
in any money market mutual or similar fund which has assets in excess of $500
million; and

 

(7)                                  any
Investment, in addition to those described in the preceding clauses (1)-(6),
defined as a Cash Equivalent Investment in the Existing Credit Facility as in
effect on the Issue Date and as itemized in Schedule I to this Indenture.

 

“Change of Control” means:

 

(1)                                  any
“person” or “group” of related persons (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such
person or group shall be deemed to have “beneficial ownership” of all shares
that any such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total voting power of the Voting Stock of
the Company (or its successor by merger, consolidation or purchase of all or
substantially all of its properties and assets) (for the purposes of this
clause, such person or group shall be deemed to beneficially own any Voting
Stock of the Company held by a parent entity, if such person or group “beneficially
owns” (as defined above), directly or indirectly, more than 50% of the voting
power of the Voting Stock of such entity);

 

(2)                                  during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of 662/3%
of the directors of the Company then still in office who were either directors
at the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority of
the Board of Directors then in office;

 

(3)                                  the
sale, conveyance, lease, assignment, transfer 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 and assets of the Company and its
Subsidiaries taken as a whole to any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act); or

 

(4)                                  the
adoption by the shareholders of the Company of a plan or proposal for the
liquidation or dissolution of the Company.

 

8

 

“Clearstream”
means Clearstream Banking, société anonyme,
or any successor securities clearance agency.

 

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

 

“Commodity Agreements”
means, with respect to any Person, any forward contract, commodity swap
agreement, commodity option agreement or other similar agreement or arrangement
designed to protect such Person against fluctuation in commodity prices.

 

“Common Stock”
means with respect to any Person, any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or nonvoting) of such Person’s common stock whether or not outstanding on the
Issue Date, and includes all series and classes of such common stock.

 

“Consolidated Coverage Ratio”
means, as of any date of determination, the ratio of (x) the aggregate
amount of Consolidated EBITDA for the period of the Company’s most recent four
consecutive fiscal quarters ended prior to the date of such determination for
which financial statements have been filed with the SEC to (y) its Consolidated
Interest Expense for such four fiscal quarters; provided, however, that:

 

(1)                                  if
the Company or any Restricted Subsidiary:

 

(a)                                  has
Incurred any Indebtedness since the beginning of such period that remains
outstanding on such date of determination or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such
period will be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period (except that in making such computation, the amount of Indebtedness
under any revolving credit facility outstanding on the date of such calculation
will be deemed to be (i)  the average
daily balance of such Indebtedness during such four fiscal quarters or such
shorter period for which such facility was outstanding or (ii) if such facility
was created after the end of such four fiscal quarters, the average daily
balance of such Indebtedness during the period from the date of creation of
such facility to the date of such calculation) and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the
first day of such period; or

 

(b)                                 has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of the period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case
other than Indebtedness Incurred under any revolving credit facility unless
such Indebtedness has been permanently repaid and the related commitment
terminated), Consolidated

 

9

 

EBITDA and
Consolidated Interest Expense for such period will be calculated after giving
effect on a pro forma basis to such discharge of such Indebtedness, including
with the proceeds of such new Indebtedness, as if such discharge had occurred
on the first day of such period;

 

(2)                                  if
since the beginning of such period the Company or any Restricted Subsidiary has
made any Asset Disposition or disposed of any company, division, operating
unit, segment, business, group of related assets or line of business or if the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is such an Asset Disposition:

 

(a)                                  the
Consolidated EBITDA for such period will be reduced by an amount equal to the
Consolidated EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Disposition for such period or increased by an amount
equal to the Consolidated EBITDA (if negative) directly attributable thereto
for such period; and

 

(b)                                 Consolidated
Interest Expense for such period will be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale);

 

(3)                                  if
since the beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) has made an Investment in any Restricted Subsidiary (or
any Person which becomes a Restricted Subsidiary or is merged with or into the
Company) or an acquisition of assets, including any acquisition of assets
occurring in connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of a company, division,
operating unit, segment, business, group of related assets or line of business,
Consolidated EBITDA and Consolidated Interest Expense for such period will be
calculated after giving pro forma effect thereto (including the Incurrence of
any Indebtedness) as if such Investment or acquisition occurred on the first
day of such period; and

 

(4)                                  if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) has Incurred any Indebtedness or
discharged any Indebtedness, made any Asset Disposition or any Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(2) or (3) above if made by the Company or a Restricted Subsidiary during such
period, Consolidated EBITDA and Consolidated Interest Expense for such period

 

10

 

will be calculated after giving pro forma effect
thereto as if such Asset Disposition or Investment or acquisition of assets
occurred on the first day of such period.

 

For purposes of
this definition, whenever pro forma effect is to be given to any calculation
under this definition, the pro forma calculations will be determined in good
faith by a responsible financial or accounting officer of the Company
(including pro forma expense and cost reductions calculated on a basis
consistent with Regulation S-X under the Securities Act).  If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest expense on such
Indebtedness will be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months).  If any Indebtedness that is being given pro
forma effect bears an interest rate at the option of the Company, the interest
rate shall be calculated by applying such optional rate chosen by the Company.

 

“Consolidated EBITDA” for any
period means, without duplication, the Consolidated Net Income of the Company
and its consolidated Restricted Subsidiaries for such period, plus the
following to the extent deducted in calculating such Consolidated Net Income:

 

(1)                                  Consolidated
Interest Expense;

 

(2)                                  Consolidated
Income Taxes;

 

(3)                                  consolidated
depletion and depreciation expense;

 

(4)                                  consolidated
exploration expense;

 

(5)                                  consolidated
amortization expense or impairment charges recorded in connection with the
application of Financial Accounting Standard No. 142 “Goodwill and Other
Intangible Assets;” and

 

(6)                                  other
non-cash charges reducing Consolidated Net Income (excluding any such non-cash
charge to the extent it represents an accrual of or reserve for cash charges in
any future period or amortization of a prepaid cash expense that was paid in a
prior period not included in the calculation);

 

and less, to the extent included in calculating such
Consolidated Net Income and in excess of any costs or expenses attributable
thereto and deducted in calculating such Consolidated Net Income, the sum of
(x) the amount of deferred revenues that are amortized during such period and
are attributable to reserves that are subject to volumetric Production
Payments, and (y) amounts recorded in accordance with GAAP as repayments of
principal and interest pursuant to dollar-denominated Production Payments.  Notwithstanding the preceding sentence,
clauses (2) through (5) relating to amounts of a Restricted Subsidiary will be
added to Consolidated Net Income to compute Consolidated EBITDA only to the
extent (and in the same proportion) that the net income (loss) of such
Restricted Subsidiary was included in calculating the Consolidated Net Income
and, to the extent the amounts set forth in clauses (2) through (5) are in
excess of those

 

11

 

necessary to offset a net loss of such Restricted
Subsidiary or if such Restricted Subsidiary has net income for such period
included in Consolidated Net Income, only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to
that Restricted Subsidiary or its stockholders.

 

“Consolidated Income
Taxes” means, for any period, taxes imposed upon the Company or
other payments required to be made by the Company by any governmental
authority, which taxes or other payments are calculated by reference to the
income or profits of the Company or the Company 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 Expense”
means, for any period, the total interest expense of the Company and its
consolidated Restricted Subsidiaries, whether paid or accrued, plus, to the
extent not included in such interest expense:

 

(1)                                  interest
expense attributable to Capitalized Lease Obligations;

 

(2)                                  amortization
of debt discount (provided that any amortization of bond premium will be
credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such
amortization of bond premium has otherwise reduced Consolidated Interest
Expense);

 

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

 

(4)                                  interest
actually paid by the Company or any such Restricted Subsidiary under any
Guarantee of Indebtedness or other obligation of any Person other than the
Company or any Restricted Subsidiary;

 

(5)                                  costs
associated with Hedging Obligations (including amortization of fees but
excluding obligations pursuant to Commodity Agreements); provided, however, that if Hedging Obligations
result in net benefits rather than costs, such benefits shall be credited to
reduce Consolidated Interest Expense unless, pursuant to GAAP, such net
benefits are otherwise reflected in Consolidated Net Income;

 

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

 

(7)                                  all
dividends paid or payable to a Person other than the Company or a Wholly-Owned
Subsidiary, in cash, Cash Equivalents or Indebtedness or accrued during such
period on any series of Disqualified Stock of the Company or on Preferred Stock
of its Restricted Subsidiaries.

 

12

 

provided, however, that there will be excluded therefrom any such
interest expense attributable to dollar-denominated Production Payments.

 

For purposes of
the preceding definition, total interest expense will be determined (i) after
giving effect to any net payments made or received by the Company and its
Restricted Subsidiaries with respect to Interest Rate Agreements and (ii)
exclusive of amounts classified as other comprehensive income in the balance
sheet of the Company.

 

“Consolidated Net Income” means,
for any period, the net income (loss) of the Company and its consolidated
Restricted Subsidiaries for such period determined in accordance with GAAP; provided, however, that there will not be included
in such Consolidated Net Income:

 

(1)                                  any
net income (loss) of any Person if such Person is not a Restricted Subsidiary,
except that:

 

(a)                                  subject
to the limitations contained in clauses (3), (4) and (5) below, the Company’s
equity in the net income of any such Person for such period will be included in
such Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary, to the limitations
contained in clause (2) below); and

 

(b)                                 the
Company’s equity in a net loss of any such Person (other than an Unrestricted
Subsidiary) for such period will be included in determining such Consolidated
Net Income to the extent such loss has been funded with cash from the Company
or a Restricted Subsidiary;

 

(2)                                  any
net income (but not loss) of any Restricted Subsidiary if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that:

 

(a)                                  subject
to the limitations contained in clauses (3), (4) and (5) below, the Company’s
equity in the net income of any such Restricted Subsidiary for such period will
be included in such Consolidated Net Income up to the aggregate amount of cash
that could have been distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary as a dividend (subject,
in the case of a dividend to another Restricted Subsidiary, to the limitation
contained in this clause); and

 

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

 

13

 

(3)                                  any
gain (loss) realized upon the sale or other disposition of any property, plant
or equipment of the Company or its consolidated Restricted Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) which is not sold or
otherwise disposed of in the ordinary course of business and any gain (loss)
realized upon the sale or other disposition of any Capital Stock of any Person;

 

(4)                                  any
extraordinary gain or loss;

 

(5)                                  the
cumulative effect of a change since December 31, 2004 in accounting
principles;

 

(6)                                  any
non-cash mark-to-market adjustments to assets or liabilities resulting in
unrealized gains or losses in respect of Hedging Obligations; and

 

(7)                                  any
impairments or write-downs of long-lived assets; provided, however, that any ceiling limitation
write-downs in accordance with GAAP shall be treated as capitalized costs, as
if such write-downs had not occurred.

 

In addition,
notwithstanding the preceding, for the purposes of Section 4.4
only, there shall be excluded from Consolidated Net Income any nonrecurring
charges relating to any premium or penalty paid, write off of deferred finance
costs or other charges in connection with redeeming or retiring any
Indebtedness prior to its Stated Maturity. 
Further, notwithstanding the preceding, the effects of SFAS 133 and SFAS
143 and any non-cash writedowns will be disregarded for purposes of calculating
Consolidated Net Income.

 

“Credit Facility”
means, with respect to the Company and any of its Restricted Subsidiaries, one
or more debt facilities (including the Existing Credit Facility) or commercial
paper facilities with banks or other institutional lenders providing for
revolving credit loans, term loans, money market lines, 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),
accounts payable overdraft financing or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time (and whether or not with the original
administrative agent and lenders or another administrative agent or agents or
other lenders and whether provided under the Existing Credit Facility or any
other credit or other agreement or indenture).

 

“Currency Agreement”
means in respect of a Person any foreign exchange contract, currency swap
agreement, futures contract, option contract or other similar agreement as to
which such Person is a party or a beneficiary.

 

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

 

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

 

14

 

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

 

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

 

“Designated Senior
Indebtedness,” with respect to a Person, means (1) its Bank
Indebtedness (to the extent such Bank Indebtedness constitutes Senior
Indebtedness) and (2) any other Senior Indebtedness of such Person which, at
the date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $50 million and is specifically designated in the
instrument evidencing or governing such Senior Indebtedness as “Designated
Senior Indebtedness” for purposes of this Indenture.

 

“Disqualified Stock” means, with
respect to any Person, any Capital Stock of such Person which 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
or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise;

 

(2)                                  is
convertible or exchangeable for Indebtedness or Disqualified Stock (excluding
Capital Stock which is convertible or exchangeable solely at the option of the
Company or a Restricted Subsidiary); or

 

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

 

in each case on or prior to the date that is 91 days
after the earlier of the date (a) of the Stated Maturity of the Securities or
(b) on which there are no Securities outstanding; provided, however, that only the portion of Capital Stock
which so matures or is mandatorily redeemable, is so convertible or
exchangeable or is so redeemable at the option of the holder thereof prior to
such date will be deemed to be Disqualified Stock; and provided, further that any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the right to require
the Company to repurchase such Capital Stock upon the occurrence of a change of
control or asset sale (each defined in a substantially similar manner to the
corresponding definitions in this Indenture) shall not constitute Disqualified
Stock if the terms of such Capital Stock (and all such securities into which it
is convertible or for which it is exchangeable) 
provide that the Company may not repurchase or redeem any such Capital
Stock (and all such securities into which it is convertible or for which it is
exchangeable) pursuant to such provision prior to compliance by the Company
with Section 4.8 and Section 4.14 and such repurchase or redemption complies with Section
4.4.

 

“Equity Offering”
means a public or private sale (including upon exercise of options, warrants or
other rights) for cash by the Company of its Capital Stock (other than
Disqualified

 

15

 

Stock), or
options, warrants or other rights with respect to its Capital Stock (other than
Disqualified Stock), other than public offerings with respect to the Company’s
Common Stock, or options, warrants or other rights, registered on Form S-4 or
S-8.

 

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

 

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

 

“Exchange Securities” means Securities
issued pursuant to this Indenture in connection with a Registered Exchange
Offer pursuant to a Registration Rights Agreement.

 

“Exchanging Dealer”
means a broker-dealer participating in a Registered Exchange Offer.

 

“Existing Credit
Facility” means the Credit Agreement dated as of December 16, 2004
between the Company, as the Borrower, certain commercial lending institutions,
as the Lenders, Bank of Montreal, acting through its Chicago, Illinois branch,
as the Administrative Agent for the Lenders, Bank of America, N.A., Toronto
Dominion (Texas) LLC and BNP Paribas, as Co-Syndication Agents, Wachovia Bank,
National Association, as Documentation Agent, and Citibank, N.A. and The Bank
of Nova Scotia, as Managing Agents, as amended.

 

“Fair Market Value” means, with respect to
any asset or Investment, the fair market value of such asset or Investment at
the time of the event requiring such determination, (a) as determined in
good faith by senior management of the Company, if the fair market value of
such asset or Investment is less than 3% of ACNTA at the time of the event
requiring such determination, or (b) as determined in good faith by the
Board of Directors of the Company, if the fair market value of such asset or
Investment is equal to or greater than 3% of ACNTA at the time of the event
requiring such determination.  Unless specifically
required by the terms of this Indenture, no valuation or assessment from any
investment banker, appraiser or other third party shall be required to be
obtained in connection with either determination contemplated by the first
sentence of this definition of Fair Market Value.

 

“Foreign Subsidiary”
means any Restricted Subsidiary that is not organized under the laws of the
United States of America or any state thereof or the District of Columbia and
has substantially all of its operations outside the United States.

 

“GAAP” means
generally accepted accounting principles in the United States of America as in
effect as of the date of this Indenture, including those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting
profession.  Unless otherwise expressly
provided herein, all ratios and computations based on GAAP contained in this
Indenture will be computed in conformity with GAAP.

 

16

 

“Global Securities”
means, individually and collectively, each of the Restricted Global Securities and
the Unrestricted Global Securities.

 

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

 

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

 

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

 

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

 

provided,
however, that the term “Guarantee”
will not include (i) endorsements for collection or deposit in the
ordinary course of business or (ii) a contractual commitment by one Person to
invest in another Person for so long as such Investment is reasonably expected
to constitute a Permitted Investment.  The
term “Guarantee” used as a verb has a corresponding meaning.

 

“Gulf of Mexico Divestiture”
means the divestiture by the Company on May 31, 2006 of a 50% interest in
its assets located in the Gulf of Mexico, pursuant to that certain Purchase and
Sale Agreement, dated as of April 20, 2006, between the Company, as seller, and
MitEnergy Upstream LLC, as buyer.

 

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

 

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

 

“Hydrocarbon Interests”
means all rights, titles and interests in and to oil and gas leases, oil, gas
and mineral leases, other Hydrocarbon leases, mineral interests, mineral
servitudes, overriding royalty interests, royalty interests, net profits
interests, Production Payments and other similar interests.

 

“Hydrocarbons”
means, collectively, crude oil, natural gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate and all other liquid or gaseous
hydrocarbons and related minerals and all products therefrom, in each case
whether in a natural or a processed state.

 

“IAI Global Security”
means a Global Security substantially in the form of Exhibit A hereto
bearing the Global Security Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a

 

17

 

denomination
equal to the outstanding principal amount of any Securities transferred to
Institutional Accredited Investors.

 

“Incur” means
issue, create, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Restricted
Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be
deemed to be Incurred by such Restricted Subsidiary at the time it becomes a
Restricted Subsidiary; and the terms “Incurred” and “Incurrence” have meanings
correlative to the foregoing.

 

“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 30 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;

 

(5)                                  Capitalized
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 or, with respect to any Subsidiary, any Preferred Stock (but
excluding, in each case, any accrued dividends);

 

(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 (including any Guarantees of production or payment by such
Person with respect to a Production Payment but excluding other

 

18

 

contractual obligations of such Person with respect to
such Production Payment); and

 

(9)                                  to
the extent not otherwise included in this definition, net obligations of such
Person under Hedging Obligations (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).

 

The amount of
Indebtedness of any Person at any date will be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.

 

Notwithstanding the
preceding, the following shall not constitute “Indebtedness”:

 

(1)                                  any
obligation in respect of any Production Payment (except as set forth in clause
(8) of the first paragraph of this definition of “Indebtedness”), royalty,
overriding royalty, net profits interest, master limited partnership interest
or other interest in oil and natural gas properties, reserves or the right to
receive all or a portion of the production or the proceeds from the sale of
production attributable to such properties;

 

(2)                                  any
obligation in respect of a farm-in agreement;

 

(3)                                  any
Indebtedness which has been defeased in accordance with GAAP or defeased
pursuant to the deposit of cash or U.S. Government Obligations (in an amount
sufficient to satisfy all such Indebtedness at Stated Maturity or redemption,
as applicable, and all payments of interest and premium, if any) in a trust or
account created or pledged for the sole benefit of the holders of such
Indebtedness, and subject to no other Liens, and the other applicable terms of the
instrument governing such Indebtedness;

 

(4)                                  oil
or gas balancing liabilities incurred in the ordinary course of business and
consistent with past practice;

 

(5)                                  any
obligations in respect of (i) completion bonds, performance bonds, bid bonds,
surety bonds and other similar bonds and (ii) bankers acceptances and letters
of credit, in each case Incurred by the Company or any Restricted Subsidiary in
the ordinary course of business, and any Guarantees or letters of credit
functioning as or supporting any of the foregoing obligations; and

 

(6)                                  any
obligation 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.

 

19

 

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

 

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

 

“Initial Purchasers” means, with respect to
the Initial Securities, Goldman, Sachs & Co., Banc of America Securities
LLC, Citigroup Global Markets Inc., Harris Nesbitt Corp., BNP Paribas
Securities Corp., Scotia Capital (USA) Inc., TD Securities (USA) LLC and
Wachovia Capital Markets, LLC, and with respect to each issuance of Additional
Securities, the Persons purchasing such Additional Securities from the Company.

 

“Institutional
Accredited Investor” means an institution that is an “accredited
investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act, who is not also a QIB.

 

“Interest Payment Date,”
when used with respect to any Security, means the date specified in such
Security as the date on which an installment of interest on such Security is
due and payable.

 

“Interest Rate Agreement”
means with respect to any Person any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement or other similar agreement or arrangement as to
which such Person is party or a beneficiary.

 

“Investment” means, with respect
to any Person, all investments by such Person in other Persons (including
Affiliates) in the form of any direct or indirect advance, loan (other than
advances or extensions of credit to customers in the ordinary course of
business) or other extensions of credit (including by way of Guarantee, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments by such Person, and all other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided, however,
that endorsements of negotiable instruments and documents in the ordinary
course of business will not be deemed to be an Investment.

 

For purposes of Section 4.4,

 

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

 

20

 

Subsidiary) of the Fair Market Value of the net assets
(as determined in accordance with the definition of such term in this Section 1.1,
the results of which determination shall be set forth in an Officers’
Certificate delivered to the Trustee) of such Subsidiary at the time that such
Subsidiary is so re-designated a Restricted Subsidiary;

 

(2)                                  any
property transferred to or from an Unrestricted Subsidiary will be valued at
its Fair Market Value at the time of such transfer, in each case as determined
in accordance with the definition of such term in this Section 1.1,
the results of which determination shall be set forth in an Officers’
Certificate delivered to the Trustee; and

 

(3)                                  if
the Company or any Restricted Subsidiary sells or otherwise disposes of any
Voting Stock of any Restricted Subsidiary such that, after giving effect to any
such sale or disposition, such entity is no longer a 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 (as determined in accordance
with the definition of such term in this Section 1.1, the results
of which determination shall be set forth in an Officers’ Certificate delivered
to the Trustee) of the Capital Stock of such Subsidiary not sold or disposed
of.

 

“Investment Grade Rating” means a rating equal to or higher
than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by
S&P.

 

“Issue Date”
means the date on which the Initial Securities are originally issued.

 

“Lien” means
any mortgage, pledge, security interest, encumbrance, lien or charge of any
kind (including any conditional sale or other title retention agreement or
lease in the nature thereof) provided,
however, “Lien” shall not include
rights created in a third Person in connection with the creation by the Company
or a Restricted Subsidiary of a Production Payment.

 

“Material Change” means an
increase or decrease (excluding changes that result solely from changes in
prices and changes resulting from the incurrence of previously estimated future
development costs) of more than 50% during a fiscal quarter in the discounted
future net revenue from proved crude oil and natural gas reserves of the
Company and its Restricted Subsidiaries, calculated in accordance with clause
(1)(a) of the definition of ACNTA; provided,
however, that the following will
be excluded from the calculation of Material Change:

 

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

 

(2)                                  any
disposition of properties existing at the beginning of such fiscal quarter that
have been disposed of in compliance with Section 4.8.

 

“Moody’s” means Moody’s Investors
Service, Inc. or any successor to the rating agency business thereof.

 

21

 

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

 

(1)                                  all
legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expenses Incurred, and all federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP (after taking into account any available tax credits or
deductions and any tax sharing agreements), as a consequence of such Asset
Disposition;

 

(2)                                  all
permanent repayments made on any Indebtedness which is secured by any assets
subject to such Asset Disposition, in accordance with the terms of any Lien
upon such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law be repaid out of the
proceeds from such Asset Disposition;

 

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

 

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

 

“Net Cash Proceeds,”
with respect to any issuance or sale of Capital Stock, means the cash proceeds
of such issuance or sale net of attorneys’ fees, accountants’ fees,
underwriters’ or placement agents’ fees, listing fees, discounts or commissions
and brokerage, consultant and other fees and charges actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale (after taking into account any available tax
credit or deductions and any tax sharing arrangements).

 

“Net Working Capital” means:

 

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

 

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

 

determined in
accordance with GAAP.

 

“Non-Recourse Debt” means
Indebtedness of a Person:

 

(1)                                  as
to which neither the Company nor any Restricted Subsidiary (a) provides any
Guarantee or credit support of any kind (including any undertaking, guarantee,

 

22

 

 indemnity,
agreement or instrument that would constitute Indebtedness) or (b) is directly
or indirectly liable (as a guarantor or otherwise); and

 

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

 

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

 

“Officers’ Certificate”
means a certificate signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company (for which in the
case of the annual Officers’ Certificate delivered pursuant to Section 4.19,
at least one of such Officers shall be the principal executive officer,
principal financial officer or principal accounting officer of the Company) and
that complies with Sections 12.4 and 12.5 of this Indenture and is delivered to
the Trustee.

 

“Oil and Gas Business” means:

 

(1)                                  the
acquisition, exploration, exploitation, development, operation or disposition
of interests in crude oil, natural gas or other Hydrocarbon properties;

 

(2)                                  the
gathering, marketing, treating, processing, storage, selling, transporting or
refining of any production from such interests or properties;

 

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

 

(4)                                  any
activity that is ancillary or necessary or desirable to facilitate the
activities described in clauses (1) through (3) of this definition, including
raising capital to finance operations.

 

“Oil and Gas Properties”
means Hydrocarbon Interests; Properties now or hereafter pooled or unitized
with Hydrocarbon Interests; all existing or future unitization, pooling
agreements and declarations of pooled units and the units created thereby
(including all units created under orders, regulations and rules of any
governmental authority having jurisdiction) which may affect all or any portion
of Hydrocarbon Interests; all operating agreements, joint venture agreements,
contracts and other agreements which relate to any Hydrocarbon Interests or the
production, sale, purchase, exchange or processing of Hydrocarbons from or
attributable to Hydrocarbon Interests; all Hydrocarbons in and under and which
may be produced and saved or attributable to Hydrocarbon Interests, the lands
covered thereby and all oil in tanks and all rents, issues, profits, proceeds,
products, revenues and other incomes from or attributable to

 

23

 

Hydrocarbon
Interests; all tenements, profits á prendre, hereditaments, appurtenances and
Properties in anywise appertaining, belonging, affixed or incidental to
Hydrocarbon Interests, Properties, rights, titles, interests and estates
described or referred to above, including any and all Property, real or
personal, now owned or hereafter acquired and situated upon, used, held for use
or useful in connection with the operating, working or development of any
Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment or other personal Property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, water wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.

 

“Opinion of Counsel”
means a written opinion from legal counsel who is acceptable to the Trustee,
that complies with Sections 12.4 and 12.5 of this Indenture and that is
delivered to the Trustee.  The counsel
may be an employee of or counsel to the Company or the Trustee.

 

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

 

“Permitted Business Investment” means
any Investment made in the ordinary course of, and of a nature that is or shall
have become customary in, the Oil and Gas Business as a means of exploiting,
exploring for, acquiring, developing, processing, gathering, marketing or
transporting crude oil, natural gas and other Hydrocarbons through any
agreement, transaction, interest or arrangement that permits one to share risks
or costs, comply with regulatory requirements regarding local ownership or
satisfy other objectives customarily achieved through the conduct of the Oil
and Gas Business jointly with third parties, including:

 

(1)                                  direct
or indirect ownership of crude oil, natural gas and other Hydrocarbon
properties or gathering, transportation, processing, storage or related
systems; and

 

(2)                                  the
entry into any one or more operating agreements, joint venture agreements,
partnership agreements, processing agreements, farm-in agreements, farm-out
agreements, contracts for the sale, transportation or exchange of crude oil,
natural gas and other Hydrocarbons, unitization agreements, pooling
arrangements, joint bidding agreements, service contracts, subscription
agreements, stock purchase agreements, area of mutual interest agreements,
production sharing agreements or other similar or customary agreements with any
one or more third parties, excluding, however, Investments in corporations and
publicly-traded limited partnerships.

 

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

 

24

 

(1)                                  a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary;

 

(2)                                  another
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
properties and assets to, the Company or a Restricted Subsidiary;

 

(3)                                  Permitted
Business Investments;

 

(4)                                  cash
and Cash Equivalents;

 

(5)                                  Capital
Stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of a
debtor or in settlement of any litigation or dispute;

 

(6)                                  Investments
made as a result of the receipt of non-cash consideration from an Asset
Disposition that was made pursuant to and in compliance with Section 4.8;

 

(7)                                  Investments
for consideration consisting of Capital Stock (other than Disqualified Stock)
of the Company;

 

(8)                                  Hedging
Obligations Incurred in compliance with Section 4.3; and

 

(9)                                  Investments
by the Company or any of its Restricted Subsidiaries, together with all other
Investments pursuant to this clause (9), in an aggregate outstanding amount not
to exceed 2% of ACNTA at any one time (with the Fair Market Value of such
Investment being measured at the time made and without giving effect to
subsequent changes in value).

 

“Permitted Junior Securities” means:

 

(1)                                  Capital
Stock of the Company or a Subsidiary Guarantor, or

 

(2)                                  debt
securities that are subordinated to all Senior Indebtedness and any debt
securities issued in exchange for Senior Indebtedness to substantially the same
extent as or to a greater extent than, the Securities or the Subsidiary
Guarantees, as the case may be, are subordinated to Senior Indebtedness
under this Indenture.

 

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

 

(1)                                  Liens
securing Indebtedness of such Person under a Credit Facility or any other
Senior Indebtedness of such Person;

 

(2)                                  Liens
securing Hedging Obligations so long as the related Indebtedness is permitted
under this Indenture;

 

25

 

(3)                                  Liens
for the purpose of securing the payment of all or a part of the purchase
price of, or purchase money obligations or other payments Incurred to finance
the acquisition, improvement or construction of, assets or property acquired or
constructed in the ordinary course of business, provided that:

 

(a)                                  the
aggregate principal amount of Indebtedness secured by such Liens is otherwise
permitted to be Incurred under this Indenture and does not exceed the cost of
the assets or property so acquired or constructed; and

 

(b)                                 such
Liens are created within 180 days of construction or acquisition of such assets
or property and do not encumber any other assets or property of the Company or
any Restricted Subsidiary other than such assets or property and assets affixed
or appurtenant thereto;

 

(4)                                  Liens
existing on the Issue Date;

 

(5)                                  Liens
in favor of the Company or any Subsidiary Guarantor;

 

(6)                                  Liens
on property or Capital Stock of a Person at the time such Person becomes a
Restricted Subsidiary (plus improvements, accessions, proceeds or dividends or
distributions in respect of any such property); provided,
however, that such Liens are not Incurred in connection with, or in
contemplation of, such other Person becoming a Restricted Subsidiary; and provided further, however, that any such Lien may not
extend to any other property owned by the Company or any Restricted Subsidiary;

 

(7)                                  Liens
on property at the time the Company or a Restricted Subsidiary acquired the
property (plus improvements, accessions, proceeds or dividends or distributions
in respect of any such property), including any acquisition by means of a
merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that such Liens are not Incurred in
connection with, or in contemplation of, such acquisition; and provided further, however, that such Liens may not
extend to any other property owned by the Company or any Restricted Subsidiary;

 

(8)                                  Liens
securing the Securities or any Subsidiary Guarantee;

 

(9)                                  Liens
securing Refinancing Indebtedness Incurred to refinance Indebtedness that was
previously so secured, provided that
any such Lien is limited to all or part of the same property (plus
improvements, accessions, proceeds or dividends or distributions in respect
thereof) that secured the Indebtedness being refinanced; or

 

(10)                            Liens
incurred in the ordinary course of business of the Company and its Restricted
Subsidiaries with respect to Indebtedness that does not exceed $10 million.

 

26

 

“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 Person, over shares of Capital Stock of any
other class of such Person.

 

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

 

“Production Payment”
means a production payment obligation (whether volumetric or U. S.
dollar-denominated) of the Company or any of its Subsidiaries which is payable
from a specified share of proceeds received from production from specified Oil
and Gas Properties, together with all undertakings and obligations in
connection therewith.

 

“Property” or
“property”
means any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible.

 

“QIB” means
any “qualified institutional buyer” as defined under Rule 144A.

 

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

 

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

 

“Refinancing
Indebtedness” means Indebtedness that is Incurred to refund,
refinance, replace, exchange, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, “refinance,” and the terms “refinances”
and “refinanced” shall have correlative meanings) any Indebtedness existing on
the Issue Date or Incurred in compliance with this Indenture, including
Indebtedness that refinances Refinancing Indebtedness; provided,
however, that:

 

(1)                                  (a) if
the Stated Maturity of the Indebtedness being refinanced is earlier than the
Stated Maturity of the Securities, the Refinancing Indebtedness 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 Securities, the Refinancing
Indebtedness has a Stated Maturity at least 91 days later than the Stated
Maturity of the Securities;

 

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

 

27

 

(3)                                  such
Refinancing Indebtedness is Incurred in an aggregate principal amount (or if
issued with original issue discount, an aggregate issue price) that is equal to
or less than the sum of the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced (plus, without duplication, any additional
Indebtedness Incurred to pay interest or premiums required by the instruments
governing such existing Indebtedness and fees and other transactional expenses
Incurred in connection therewith);

 

(4)                                  if
the Indebtedness being refinanced is subordinated in right of payment to the
Securities or a Subsidiary Guarantee, such Refinancing Indebtedness is
subordinated in right of payment to the Securities or such Subsidiary Guarantee
on terms at least as favorable to the Holders as those contained in the
documentation governing the Indebtedness being refinanced; and

 

(5)                                  such
Indebtedness is not incurred by a Restricted Subsidiary (other than a
Subsidiary Guarantor) if the Company or a Subsidiary Guarantor is the obligor
on the Indebtedness being refinanced; and provided,
however, that a Restricted
Subsidiary that is also a Subsidiary Guarantor may Guarantee Refinancing
Indebtedness Incurred by the Company, whether or not such Restricted Subsidiary
was an obligor or guarantor of the Indebtedness being refinanced; and provided  further,
however, that if such Refinancing
Indebtedness is subordinated to the Securities, such Guarantee shall be
subordinated to such Restricted Subsidiary’s Subsidiary Guarantee to at least
the same extent.

 

“Registered Exchange Offer” means an offer
by the Company, pursuant to a Registration Rights Agreement, to certain Holders
of Initial Securities or Additional Securities that have not been registered
under the Securities Act, as the case may be, to issue and deliver to such
Holders, in exchange for their Securities, a like aggregate principal amount of
Exchange Securities that have been registered under the Securities Act.

 

“Registration Rights
Agreement” means the Exchange and Registration Rights Agreement,
dated as of the Issue Date, between the Company and the Initial Purchasers, or
any similar registration rights agreement with respect to Additional
Securities.

 

“Regulation S” means Regulation S promulgated under
the Securities Act.

 

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

 

“Representative”
means any trustee, agent or representative (if any) of an issue of Senior
Indebtedness.

 

28

 

“Restricted Definitive
Security” means a Definitive Security bearing the Private Placement
Legend.

 

“Restricted Global
Security” means a Global Security bearing the Private Placement
Legend.

 

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

 

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

 

“Restricted Subsidiary”
means any Subsidiary of the Company other than an Unrestricted Subsidiary.

 

“Rule 144”
means Rule 144 promulgated under the Securities Act.

 

“Rule 144A”
means Rule 144A promulgated under the Securities Act.

 

“Rule 903”
means Rule 903 promulgated under the Securities Act.

 

“Rule 904”
means Rule 904 promulgated the Securities Act.

 

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

 

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

 

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

 

“Securities”
means securities issued under this Indenture. The Initial Securities, Exchange
Securities and the Additional Securities shall be treated as a single class for
all purposes under this Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase, and unless the context
otherwise requires, all references to the Securities shall include the Initial
Securities, Exchange Securities and any Additional Securities.

 

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

 

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

 

“Senior Indebtedness”
means, with respect to either the Company or a Subsidiary Guarantor, and
whether such Senior Indebtedness is outstanding on the Issue Date or thereafter
Incurred, its Bank Indebtedness and all amounts payable by it under or in
respect of all of its other Indebtedness, including premiums and accrued and
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to such

 

29

 

Person, at the rate
specified in the documentation with respect thereto, whether or not a claim for
post filing interest is allowed in such proceeding) and fees relating thereto; provided, however, that Senior Indebtedness will not
include any of the following (if it constitutes Indebtedness):

 

(1)                                  any
Indebtedness Incurred in violation of this Indenture;

 

(2)                                  any
obligation of such Person to any Subsidiary;

 

(3)                                  any
liability for federal, state, foreign, local or other taxes owed or owing by
such Person;

 

(4)                                  any
accounts payable or other liability to trade creditors of such Person arising
in the ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities);

 

(5)                                  any
Indebtedness, Guarantee or obligation of such Person that is expressly
subordinate or junior in right of payment to any other Indebtedness, Guarantee
or obligation of such Person, including any Senior Subordinated Indebtedness
and any Subordinated Obligations of such Person; or

 

(6)                                  any
Capital Stock of such Person.

 

“Senior Subordinated
Indebtedness” means with respect to the Company, the Securities, the
2011 Notes, the 2015 Notes and the 2017 Notes, and with respect to a Subsidiary
Guarantor, its Subsidiary Guarantee and its Guarantee, if any, with respect to
the 2011 Notes, the 2015 Notes or the 2017 Notes, and any other Indebtedness of
such Person that specifically provides that such Indebtedness is to rank
equally with the Securities or such Subsidiary Guarantee, as the case may be,
in right of payment and is not subordinated by its terms in right of payment to
any Indebtedness or other obligation of such Person which is not Senior
Indebtedness of such Person.

 

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

 

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

 

“Special Interest”
means the additional interest, if any, required by Section 2(c) of
the Registration Rights Agreement relating to the Initial Securities or any
similar provision of a Registration Rights Agreement with respect to Additional
Securities.

 

“Stated Maturity”
means, with respect to any security, the date specified in such security as the
fixed date on which the payment of principal of such security is due and
payable, including pursuant to any mandatory redemption provision, but shall
not include any contingent obligations to repay, redeem or repurchase any such
principal prior to the date originally scheduled for the payment thereof.

 

30

 

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

 

“Subsidiary”
of any Person means (a) any corporation, association or other business
entity (other than a partnership, joint venture, limited liability company or
similar entity) of which more than 50% of the total ordinary voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
(or persons performing similar functions) or (b) 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
partnership interests, as applicable, is, in the case of clauses (a) and
(b), at the time owned or controlled, directly or indirectly, by (1) such
Person, (2) such Person and one or more Subsidiaries of such Person or (3) one
or more Subsidiaries of such Person. Unless otherwise specified herein, each
reference to a “Subsidiary” is to a Subsidiary of the Company.

 

“Subsidiary Guarantee”
means, individually, any unconditional Guarantee, on a senior subordinated basis,
of payment of the Securities by a Subsidiary Guarantor pursuant to the terms of
this Indenture and any supplemental indenture thereto.

 

“Subsidiary Guarantor”
means any Restricted Subsidiary that has provided a Subsidiary Guarantee in
accordance with Section 4.11 and its successors and assigns.

 

“Treasury Rate” means the yield to maturity
at the time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) which has become publicly available at least two
Business Days prior to the date fixed for redemption (or, if such Statistical
Release is no longer published, any publicly available source of similar market
data)) most nearly equal to the then remaining average life to May 1,
2010; provided, however, that if the average life to May 1, 2010 of
the Notes is not equal to the constant maturity of a United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the average life to May 1,
2010 of the Notes is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.

 

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

 

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

 

“Trustee”
means the Person named as the “Trustee” in the first paragraph of this
Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions

 

31

 

of this Indenture, and thereafter “Trustee” shall mean or
include each Person who is then a Trustee hereunder.

 

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

 

“Unrestricted Global
Security” means a permanent Global Security substantially in the form of
Exhibit A attached hereto that bears the Global Security Legend and
that has the “Schedule of Exchanges of Interests in the Global Security”
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary, representing Securities that do not bear and are
not required to bear the Private Placement Legend.

 

“Unrestricted Subsidiary”
means:

 

(1)                                  any
Subsidiary of the Company that at the time of determination shall be designated
an Unrestricted Subsidiary by the Company in the manner provided below; and

 

(2)                                  any
Subsidiary of an Unrestricted Subsidiary.

 

The
Company may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary or a Person becoming a Subsidiary through
merger or consolidation or Investment therein) to be an Unrestricted Subsidiary
only if:

 

(1)                                  such
Subsidiary or any of its Subsidiaries does not, at the time of designation or
at any time thereafter, own any Capital Stock or Indebtedness of or have any
Investment in, or own or hold any Lien on any property of, any other Subsidiary
of the Company which is not a Subsidiary of the Subsidiary to be so designated
or otherwise an Unrestricted Subsidiary;

 

(2)                                  all
the Indebtedness of such Subsidiary and its Subsidiaries (excluding any
Indebtedness owing to the Company or any Restricted Subsidiary) shall, at the
date of designation, and will at all times thereafter, consist of Non-Recourse
Debt;

 

(3)                                  such
designation and the Investment of the Company in such Subsidiary complies with Section 4.4;

 

(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;

 

(5)                                  such
Subsidiary 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
Capital Stock of such Person; or

 

(b)                                 to maintain or preserve such
Person’s financial condition or to cause such Person to achieve any specified
levels of operating results; and

 

32

 

(6)                                  on
the date such Subsidiary is designated an Unrestricted Subsidiary,  such Subsidiary is not a party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary with terms substantially less favorable to the Company or such
Restricted Subsidiary, as applicable, than those that might have been obtained
from Persons who are not Affiliates of the Company.

 

Any
such designation by the Company shall be evidenced to the Trustee by filing
with the Trustee an Officers’ Certificate reflecting such designation and
certifying that such designation complies with the preceding conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture.

 

The
Company may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, provided that immediately after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and the Company could
Incur at least $1.00 of additional Indebtedness under Section 4.3(a) on
a pro forma basis taking into account such designation.

 

“U.S. Dollar-Equivalent”
means, with respect to any monetary amount in a currency other than the U.S.
dollar, at or as of any time for the 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 quoted by Reuters (or, if Reuters
ceases to provide such spot quotations, by any other reputable service as is
providing such spot quotations, as selected by the Company) at approximately
11:00 a.m. (New York City time) on the date not more than two Business
Days prior to such determination. Whenever the definitions in this Section 1.1
or the provisions of Article IV or Article VI refer to
an amount in U.S. dollars, that amount shall be deemed to refer to the U.S.
Dollar Equivalent of the amount denominated in any other currency or currency
unit, including composite currencies.

 

“U.S. Government
Obligations” means securities that are (a) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation of the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such U.S. Government
Obligations or a specific payment of principal of or interest on any such U.S.
Government Obligations held by such custodian for the account of the holder of
such depositary receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S.
Government Obligations evidenced by such depositary receipt.

 

33

 

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

 

“Voting Stock”
of a corporation means all classes of Capital Stock of such corporation then
outstanding and normally entitled to vote in the election of directors.

 

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

 

Section 1.2                                      Other
Definitions

 

	
  “Affiliate Transaction”

  	
   

  	
  4.9

  	
   

  
	
  “Asset
  Disposition Offer Amount”

  	
   

  	
  4.8(c)

  	
   

  
	
  “Asset Disposition
  Offer Period”

  	
   

  	
  4.8(c)

  	
   

  
	
  “Asset
  Disposition Offer”

  	
   

  	
  4.8(b)

  	
   

  
	
  “Asset
  Disposition Purchase Date”

  	
   

  	
  4.8(c)

  	
   

  
	
  “Authenticating
  Agent”

  	
   

  	
  2.2

  	
   

  
	
  “Blockage
  Notice”

  	
   

  	
  10.3(b)

  	
   

  
	
  “Borrowed
  Money Payment Default”

  	
   

  	
  6.1

  	
   

  
	
  “Change of
  Control Offer”

  	
   

  	
  4.14

  	
   

  
	
  “Change of
  Control Payment Date”

  	
   

  	
  4.14

  	
   

  
	
  “Change of
  Control Payment”

  	
   

  	
  4.14

  	
   

  
	
  “covenant
  defeasance option”

  	
   

  	
  8.1(a)

  	
   

  
	
  “Defaulted
  Interest”

  	
   

  	
  2.11

  	
   

  
	
  “Event of
  Default”

  	
   

  	
  6.1

  	
   

  
	
  “Excess
  Proceeds”

  	
   

  	
  4.8(b)

  	
   

  
	
  “Initial
  Securities”

  	
   

  	
  Preamble

  	
   

  
	
  “legal
  defeasance option”

  	
   

  	
  8.1(a)

  	
   

  
	
  “Legal
  Holiday”

  	
   

  	
  12.7

  	
   

  
	
  “Non-Payment
  Default”

  	
   

  	
  10.3(b)

  	
   

  
	
  “Pari Passu
  Notes”

  	
   

  	
  4.8(b)

  	
   

  
	
  “pay the
  Securities”

  	
   

  	
  10.3(a)

  	
   

  
	
  “Paying
  Agent”

  	
   

  	
  2.3

  	
   

  
	
  “Payment
  Blockage Period”

  	
   

  	
  10.3(b)

  	
   

  
	
  “Payment
  Default”

  	
   

  	
  10.3(a)

  	
   

  
	
  “Obligations”

  	
   

  	
  11.1

  	
   

  
	
  “Registrar”

  	
   

  	
  2.3

  	
   

  
	
  “Restricted
  Payment”

  	
   

  	
  4.4(a)

  	
   

  
	
  “Successor
  Company”

  	
   

  	
  5.1(a)

  	
   

  

 

Section 1.3                                      Incorporation
by Reference of Trust Indenture Act

 

Whether
or not qualified under the Trust Indenture Act, this Indenture is deemed to be
subject to the provisions of the Trust Indenture Act that are applicable to all
indentures qualified

 

34

 

thereunder, such provisions being incorporated by reference
in and made a part of this Indenture. The following Trust Indenture Act
terms have the following meanings:

 

“Commission” means the SEC;

 

“indenture securities” means the
Securities;

 

“indenture security holder” means a Holder;

 

“indenture to be qualified” means this
Indenture;

 

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

 

“obligor” on the indenture securities means
the Company and any other obligor on the indenture securities.

 

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

 

Section 1.4                                      Rules of
Construction

 

Unless
the context otherwise requires:

 

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

 

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

 

(3)                                  “or”
is not exclusive;

 

(4)                                  “including”
means including without limitation, whether or not so indicated;

 

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

 

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

 

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

 

(8)                                  “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.

 

35

 

ARTICLE II

THE SECURITIES

 

Section 2.1                                      Form and
Dating

 

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

 

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

 

(b)                                 Global Securities. Securities issued in
global form shall be substantially in the form of Exhibit A
attached hereto (including the Global Security Legend thereon and the “Schedule of
Exchanges of Interests in the Global Security” attached thereto). Securities
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Security Legend thereon and without the
“Schedule of Exchanges of Interests in the Global Security” attached
thereto). Each Global Security shall represent such aggregate principal amount
of the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate principal amount of outstanding
Securities from time to time endorsed thereon and that the aggregate principal
amount of outstanding Securities represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges, repurchases,
transfers of interests and redemptions. Any endorsement of a Global Security to
reflect the amount of any increase or decrease in the aggregate principal
amount of outstanding Securities represented thereby shall be made by the
Trustee, or the Securities Custodian at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section 2.6
hereof. Participants and Indirect Participants shall have no rights under this
Indenture or any Global Security with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as Securities Custodian.

 

Securities
offered and sold to QIBs in reliance on Rule 144A shall be issued
initially in the form of one or more 144A Global Securities, and
Securities offered and sold in reliance on Regulation S shall be issued
initially in the form of a Regulation S Global Security. Each such 144A
Global Security and Regulation S Global Security shall be deposited on behalf
of the purchasers of the Securities represented thereby with the Securities
Custodian and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. If beneficial interests in any such 144A Global Security
or Regulation S Global Security are transferred to an Institutional Accredited
Investor, then, for so long as the Applicable Procedures shall so permit, such
beneficial interests

 

36

 

shall be represented by an IAI Global Security having an
initial principal amount equal to the aggregate amount of such beneficial
interests, and such IAI Global Security shall be deposited on behalf of the
beneficial owners of the Securities represented thereby with the Securities
Custodian and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided.

 

(c)                                  Euroclear and Clearstream Procedures Applicable.
The procedures of Euroclear and Clearstream shall be applicable to transfers of
beneficial interests in the Global Securities that are held by Participants
through Euroclear or Clearstream.

 

Section 2.2                                      Execution
and Authentication

 

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

 

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

 

A
Security shall not be valid until an authorized signatory of the Trustee
manually authenticates the Security. The signature of the Trustee on a Security
shall be conclusive evidence that such Security has been duly and validly
authenticated and issued under this Indenture. The form of Trustee’s
certificate of authentication to be borne by the Securities shall be
substantially as set forth in Exhibit A hereto.

 

The
Trustee shall authenticate and deliver: (i) Initial Securities for
original issue in an aggregate principal amount of $450 million, (ii) if
and when issued, Additional Securities (which may be in the form of
Initial Securities or in the form of Exchange Securities) and (iii) Exchange
Securities for issue only in a Registered Exchange Offer pursuant to a
Registration Rights Agreement, and only in exchange for Initial Securities or Additional
Securities of an equal principal amount, in each case upon a written order of
the Company signed by one Officer of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and whether the Securities are to be
in the form of Initial Securities or Exchange Securities. The Company may issue
Additional Securities under this Indenture subsequent to the Issue Date,
subject to Section 4.3 of this Indenture; provided, however,
in no event may the Company issue any Additional Securities at a price
that would cause such Additional Securities to have “original issue discount”
within the meaning of Section 1273 of the Code.

 

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

 

37

 

Section 2.3                                      Registrar
and Paying Agent

 

The
Company shall at all times maintain in the continental United States an office
or agency where Securities may be presented for registration of transfer
or for exchange (the “Registrar”),
and it shall designate or maintain an office or agency in the City and State of
New York where Securities may be presented for payment (the “Paying Agent”). The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may have
one or more co-registrars and one or more additional paying agents. The term “Registrar”
includes any co-registrar, and the term “Paying Agent” includes any such
additional paying agent. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company shall notify the Trustee in
writing of the name and address of any Agent not named in this Indenture. If
the Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company shall enter into an
appropriate agency agreement with any Agent not a party to this Indenture, and
such agreement shall incorporate the TIA’s provisions of this Indenture that
relate to such Agent. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.

 

The
Company initially appoints the Trustee as Registrar and Securities Custodian at
its office indicated in Section 12.2. Initially, the Company
appoints the Trustee as Paying Agent, and the office or agency of the Company
in the City and State of New York where Securities may be presented for
payment is the offices of The Bank of New York at 101 Barclay Street, Lobby,
New York, New York 10286.

 

Section 2.4                                      Paying
Agent To Hold Money in Trust

 

(a)                                  By
at least 11:00 a.m. (New York City time) on the date on which any
principal, premium, if any, or interest on any Security is due and payable, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
principal, premium, if any, and interest when due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that such Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all money
held by such Paying Agent for the payment of principal, premium, if any, and
interest, if any, on the Securities and shall notify the Trustee of any default
by the Company in making any such payment. If the Company or a Subsidiary acts
as Paying Agent, it shall comply with Section 4.17. The Company at
any time may require a Paying Agent (other than the Trustee) to pay all
money held by it to the Trustee and the Trustee may at any time during the
continuance of any Event of Default under Section 6.1(1) or (2),
upon written request to a Paying agent, require such Paying Agent to forthwith
pay to the Trustee all sums so held in trust by such Paying Agent and, in each
case, to account for any funds disbursed by such Paying Agent. Upon complying
with this Section 2.4, the Paying Agent (if other than the Company
or a Subsidiary) shall have no further liability for the money delivered to the
Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect
to the Company, the Trustee shall serve as Paying Agent for the Securities or,
if it does not at such time maintain an office in the City and State of New
York where Securities may be presented or surrendered for payment, then it
shall cause such a Paying Agent to be appointed.

 

(b)                                 Anything
in this Section 2.4 or Section 4.17 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this

 

38

 

Indenture, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust by it, or any Paying Agent
hereunder, as required by this Section 2.4 or Section 4.17,
such sums to be held by the Trustee upon the trusts herein contained.

 

(c)                                  Anything
in this Section 2.4 or Section 4.17 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section 2.4
or Section 4.17 is subject to the provisions of Section 8.4 and Section 8.6.

 

Section 2.5                                      Holder
Lists

 

The
Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of Holders and
shall otherwise comply with TIA Section 312(a). If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Holders, and the Company shall otherwise comply with TIA Section 312(a).

 

Section 2.6                                      Transfer
and Exchange

 

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

 

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

 

(2)                                  there
has occurred and is continuing an Event of Default and DTC notifies the Trustee
and the Registrar of its decision to exchange the Global Securities for
Definitive Securities.

 

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

 

39

 

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

 

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

 

(2)                                  All Other Transfers and Exchanges of Beneficial
Interests in Global Securities. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section 2.6(b)(1) above,
the transferor of such beneficial interest must deliver to the Registrar (i) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another
Global Security in an amount equal to the beneficial interest to be transferred
or exchanged; and (ii) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant account
to be credited with such increase. Upon consummation of a Registered Exchange
Offer, the requirements of this Section 2.6(b)(2) shall be
deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letters of Transmittal by the transferors of such beneficial
interests.

 

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

 

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

 

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

 

40

 

(C)                                if
the transferee will take delivery in the form of a beneficial interest in
the IAI Global Security, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certification in item (3) thereof,
and the transferee must deliver a certificate in the form of Exhibit D
hereto, and, if such transfer is in respect of an aggregate principal amount of
Securities of less than $250,000, an Opinion of Counsel reasonably acceptable
to the Company and the Registrar that such transfer is in compliance with the
Securities Act and any applicable securities laws of any state of the United
States.

 

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

 

(A)                              such
exchange or transfer is effected pursuant to a Registered Exchange Offer in
accordance with the related Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter of
Transmittal or via the Depositary’s book-entry system to the effect required by
the Registration Rights Agreement and SEC interpretations;

 

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

 

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

 

(D)                               the
Registrar receives the following:

 

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

 

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

 

and,
in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and state “blue sky” laws and that the
restrictions on transfer contained herein and in the Private

 

41

 

Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.

 

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

 

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

 

(c)                                  Transfer or Exchange of Beneficial Interests for
Definitive Securities. Beneficial interests in a Global Security may be
exchanged or transferred for Definitive Securities only as provided in Section 2.6(a) hereof.

 

(d)                                 Transfer and Exchange of Definitive Securities for
Beneficial Interests. If issued, Definitive Securities may not
be exchanged or transferred for beneficial interests in a Global Security,
unless otherwise allowed by the Company in its discretion and, in such a case,
subject to such procedures as it, the Trustee and any Agent may establish
and to any Applicable Procedures.

 

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

 

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

 

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

 

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

 

42

 

(C)                                if
the transfer will be made to an Institutional Accredited Investor, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certification in item (3) thereof, and the
transferee must deliver a certificate in the form of Exhibit D
hereto, and, if such transfer is in respect of an aggregate principal amount of
Securities of less than $250,000, an Opinion of Counsel reasonably acceptable
to the Company and the Registrar that such transfer is in compliance with the
Securities Act and any applicable securities laws of any state of the United
States.

 

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

 

(A)                              such
exchange or transfer is effected pursuant to a Registered Exchange Offer in
accordance with the related Registration Rights Agreement and the Holder, in
the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal or via the Depositary’s
book-entry system to the effect required by the Registration Rights Agreement
and SEC interpretations;

 

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

 

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

 

(D)                               the
Registrar receives the following:

 

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

 

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

 

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

 

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

 

43

 

register such a transfer, the Registrar shall register
the Unrestricted Definitive Security pursuant to the instructions from the
Holder thereof.

 

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

 

(A)                              one
or more Unrestricted Global Securities in an aggregate principal amount equal
to the principal amount of the beneficial interests in the Restricted Global Securities
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal or via the Depositary’s book-entry system to the effect required by
the applicable Registration Rights Agreement and SEC interpretations, and
accepted for exchange in the Registered Exchange Offer; and

 

(B)                                Unrestricted
Definitive Securities in an aggregate principal amount equal to the principal
amount of any Restricted Definitive Securities tendered by Persons who make the
foregoing certifications and accepted for exchange in the Registered Exchange
Offer.

 

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

 

(g)                                 Legends. The following legends shall appear
on the face of all Global Securities and Definitive Securities issued under
this Indenture unless specifically stated otherwise in the applicable
provisions of this Indenture, until the expiration of the applicable holding
period with respect to the Securities set forth in Rule 144(k) under the
Securities Act (or, in the case of Securities issued under Regulation S, the
expiration of the Restricted Period).

 

(1)                                  Private Placement Legend.

 

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

 

“THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO THE
COMPANY, (2) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED

 

44

 

INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) IN
AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (5) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (6) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.”

 

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

 

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

 

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

 

UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE
FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY

 

45

 

AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (“DTC”) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.”

 

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

 

(i)                                     General Provisions Relating to Transfers and
Exchanges.

 

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

 

(2)                                  No
service charge shall be made to a holder of a beneficial interest in a Global
Security or to a Holder of a Definitive Security for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or other governmental taxes and fees
required by law or permitted by this Indenture and payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.9, 3.6, 3.7, 4.8 and 4.14
hereof).

 

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

 

46

 

 

(4)                                  None
of the Company, the Trustee or the Registrar shall be required (A) to
issue, to register the transfer of or to exchange any Securities during a
period of 15 days before the day of any selection of Securities for redemption
under Section 3.2 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any
Securities so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part or (C) to
register the transfer of or to exchange a Security between a record date and
the next succeeding Interest Payment Date.

 

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

 

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

 

Section 2.7                                      Replacement
Securities

 

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

 

Every
replacement Security is an additional obligation of the Company, evidencing the
same debt as the destroyed, lost or stolen security,  and will be entitled to all of the benefits
of this Indenture equally and proportionately with all other Securities duly
issued hereunder.

 

Section 2.8                                      Outstanding
Securities

 

The
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the beneficial interests in a Global Security effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 12.6
hereof, a Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.

 

47

 

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

 

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

 

Section 2.9                                      Temporary
Securities

 

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

 

Section 2.10                                Cancellation

 

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

 

Section 2.11                                Defaulted
Interest

 

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

 

48

 

deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as provided in this Section 2.11.

 

Section 2.12                                CUSIP
Numbers

 

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

 

ARTICLE III

REDEMPTION

 

Section 3.1                                      Notices
to Trustee

 

If
the Company elects to redeem Securities pursuant to Section 3.7
hereof, it shall notify the Trustee in writing of the Redemption Date and the
principal amount of Securities to be redeemed and whether it requests the
Trustee to give notice to such redemption.

 

The
Company shall give each notice to the Trustee provided for in this Section 3.1
at least five Business Days (unless the Trustee consents to a shorter period)
before the date of giving notice of a redemption pursuant to Section 3.3.
Such notice shall be accompanied by an Officers’ Certificate to the effect that
such redemption will comply with the conditions herein (including any
conditions in the Notes). If fewer than all the Securities are to be redeemed,
the record date relating to such redemption shall be selected by the Company
and set forth in the related notice given to the Trustee, which record date
shall be not less than 15 days after the date of such notice.

 

Section 3.2                                      Selection
of Securities To Be Redeemed

 

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

 

49

 

The
provisions of the preceding paragraph of this Section 3.2 shall not
apply with respect to any redemption affecting only a Global Security, whether
such Global Security 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 Security shall be in an authorized denomination.

 

Section 3.3                                      Notice
of Redemption

 

At
least 10 days but not more than 60 days before a date for redemption of
Securities, the Company shall mail, or cause to be mailed, a notice of
redemption by first-class mail to each Holder of Securities to be redeemed
at such Holder’s registered address.

 

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

 

(1)                                  the
Redemption Date;

 

(2)                                  the
Redemption Price (or, in the case of a redemption pursuant to Section 3.7(c),
the method or basis for determining such Redemption Price) and the amount of
accrued and unpaid interest per $1,000 principal amount of the Securities to
the Redemption Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

At
the Company’s request and in accordance with Section 3.1, the
Trustee shall give the notice of redemption in the Company’s name and at the
Company’s expense. In such event, the Company shall provide the Trustee with
the information required by this Section 3.3, and if the Company
elects to give the notice of redemption it shall give a copy to the Trustee at
the same time.

 

50

 

Section 3.4                                      Effect
of Notice of Redemption

 

Once
notice of redemption is mailed to Holders, Securities (or portions thereof)
called for redemption become irrevocably due and payable on the Redemption Date
and at the Redemption Price stated in the notice. A notice of redemption may not
be conditional. Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.

 

Section 3.5                                      Deposit
of Redemption Price

 

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

 

Section 3.6                                      Securities
Redeemed in Part

 

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

 

Section 3.7                                      Optional
Redemption

 

(a)                                  On
and after May 1, 2010, the Company may redeem all or, from time to
time, part of the Securities upon not less than 10 nor more than 60 days’
notice at the Redemption Prices (expressed as percentages of the principal
amount) set forth below plus accrued and unpaid interest on the Securities, if
any, to the applicable Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date), if redeemed during
the 12-month period beginning May 1 of the years indicated:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  103.938

  	
  %

  
	
  2011

  	
   

  	
  101.969

  	
  %

  
	
  2012

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 Prior
to May 1, 2009, the Company may on one or more occasions redeem up to
35% of the aggregate original principal amount of the Securities (including any
Additional Securities), with the Net Cash Proceeds of one or more Equity
Offerings at a Redemption Price of 107.875% of the principal amount of the
Securities, plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date);

 

51

 

provided that (i) at
least 65% of the aggregate original principal amount of the Securities
(including any Additional Securities) remains outstanding after each such
redemption and (ii) such redemption occurs within 120 days after the
closing of the related Equity Offering.

 

(c)                                  The
Company may, at its option, prior to May 1, 2010, redeem the Securities
(including any Additional Securities), as a whole at any time or in part from
time to time, at a Redemption Price equal to the sum of:

 

(1)                                  the
principal amount thereof, plus

 

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

 

(3)                                  the
Applicable Premium at the Redemption Date.

 

If the Company elects to redeem any Securities
pursuant to this Section 3.7(c), it shall deliver to the Trustee an
Officer’s Certificate setting forth the Redemption Price no later than the
Business Day next preceding the Redemption Date.

 

(d)                                 Except
pursuant to the preceding paragraph (b) or (c), the Securities will not be
redeemable at the Company’s option prior to May 1, 2010. Except as set
forth under Sections 4.8 and 4.14, the Company shall not be required to
make mandatory redemption or sinking fund payments with respect to the
Securities or to repurchase the Securities at the option the Holders.

 

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

 

ARTICLE IV

COVENANTS

 

Section 4.1                                      Payment
of Securities

 

The
Company covenants and agrees for the benefit of the Holders of the Securities
that it shall promptly pay the principal of, premium, if any, and interest on
the Securities on the dates and in the manner provided in the Securities and in
this Indenture. Principal, premium, if any, and interest on the Securities
shall be considered paid on the date due if by 11:00 a.m., New York City
time, on such date a Paying Agent holds in accordance with this Indenture money
sufficient to pay all principal, premium, if any, and interest then due and the
Paying Agent is not prohibited from paying money to Holders of the Securities
on that date pursuant to the terms of this Indenture.

 

The
Company will pay interest (which includes post-petition interest that may be
paid in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, at the rate then in effect on Securities; it will pay interest
(which includes post-petition interest that may be paid in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without

 

52

 

regard to any applicable grace periods), from time to time
on demand at the same rate as on overdue principal to the extent lawful.

 

All
references in this Indenture, the Securities or the Subsidiary Guarantees to
interest shall be deemed to include Special Interest, unless the context
indicates otherwise. The Company shall notify the Trustee in writing of the
amount of any Special Interest payable on any Securities in advance of the
relevant Interest Payment Date.

 

Notwithstanding
anything to the contrary contained in this Indenture, the Company may, to the
extent it is required to do so by law, deduct or withhold income or other similar
taxes imposed by the United States of America from principal, interest or
premium (if any) payments hereunder.

 

Section 4.2                                      SEC
Reports

 

Whether
or not required by the rules and regulations of the SEC, so long as any
Securities are outstanding, the Company will furnish to the Trustee, within the
time periods specified in the SEC’s rules and regulations for reports
required to be filed with it (including any filing extensions granted by the
SEC):

 

(1)                                  all
quarterly and annual reports 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 reports; 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.

 

All
such reports will be prepared in all material respects in accordance with all
of the rules and regulations applicable to such reports. Each annual
report on Form 10-K will include a report on the Company’s consolidated
financial statements by the Company’s certified independent accountants.

 

In
addition, whether or not required by the SEC, the Company will file a copy of
each of the reports referred to in clauses (1) and (2) above with the
SEC (unless the SEC will not accept such a filing) for public availability
within the time periods specified in the SEC’s rules and regulations
applicable to such reports (including any filing extensions granted by the SEC)
and  will post the reports on its website
within such time periods.

 

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

 

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

 

53

 

Section 4.3                                      Limitation
on Indebtedness

 

(a)                                  The
Company will not, and will not permit any of its Restricted Subsidiaries to,
Incur any Indebtedness (including Acquired Indebtedness); provided, however,
that the Company and any Subsidiary Guarantor may Incur Indebtedness if on
the date of such Incurrence:

 

(1)                                  the
Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is
at least 2.25 to 1.00; and

 

(2)                                  no
Default or Event of Default will have occurred or be continuing or would occur
as a consequence of Incurring the Indebtedness or transactions relating to such
Incurrence.

 

(b)                                 Notwithstanding
Section 4.3(a), any of the
following may be Incurred, to the extent constituting Indebtedness:

 

(1)                                  additional Indebtedness of the Company and its
Restricted Subsidiaries Incurred pursuant to any Credit Facility, so long as
the aggregate amount of all Indebtedness Incurred under this clause (1) that
is at any time outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company and
its Restricted Subsidiaries thereunder) does not exceed the greater of (x)
$1.25 billion and (y) $600 million plus 12.5% of ACNTA, in each
case, as of the date of such Incurrence;

 

(2)                                  Indebtedness
of the Company owing to and held by any Restricted Subsidiary or Indebtedness
of a Restricted Subsidiary owing to and held by the Company or any Restricted
Subsidiary; provided, however,

 

(A)                              if
the Company is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all obligations with
respect to the Securities; and

 

(B)                                (i) any
subsequent issuance or transfer of Capital Stock or any other event which
results in any such Indebtedness being beneficially held by a Person other than
the Company or a Restricted Subsidiary and (ii) any sale or other transfer
of any such Indebtedness to a Person other than the Company or a Restricted
Subsidiary,

 

shall be
deemed, in each case, to constitute an Incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be;

 

(3)                                  Indebtedness
represented by (a) the Securities issued on the Issue Date and any
Subsidiary Guarantees, (b) any other Indebtedness (other than the
Indebtedness described in Section 4.3(b)(1) and
Section 4.3(b)(2)) outstanding
on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect
of any Indebtedness described in this Section 4.3(b)(3) or
Section 4.3(b)(4) or
Incurred pursuant to Section 4.3(a);

 

(4)                                  Indebtedness
of a Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred (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

 

54

 

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 Section 4.3(a) after
giving effect to the Incurrence of such Indebtedness pursuant to this clause
(4);

 

(5)                                  any
Hedging Obligations; provided,
that such Hedging Obligations are related to business transactions of the
Company or its Restricted Subsidiaries entered into in the ordinary course of
business and are Incurred for bona fide hedging purposes (and not for
speculative purposes) of the Company or its Restricted Subsidiaries (as
determined in good faith by the Board of Directors or senior management of the
Company);

 

(6)                                  any
Indebtedness arising from any agreement of the Company or a Restricted
Subsidiary providing for indemnities, Guarantees, purchase price adjustments,
holdbacks, contingent payment obligations based on the performance of acquired
or disposed assets or similar obligations (but excluding Guarantees of
Indebtedness) Incurred by the Company or any Restricted Subsidiary in
connection with the acquisition or disposition of any business, assets or
Capital Stock of a Restricted Subsidiary;

 

(7)                                  the
Guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries
or by any Restricted Subsidiary of Indebtedness of the Company or another
Restricted Subsidiary, in each case, that was permitted to be Incurred by
another provision of this covenant; and

 

(8)                                  in
addition to the items referred to in clauses (1) through (7) above,
Indebtedness of the Company and its Restricted Subsidiaries (including
Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date
such Restricted Subsidiary was acquired by the Company) in an aggregate
outstanding principal amount which, when taken together with the principal
amount of all other Indebtedness Incurred pursuant to this clause (8) and
then outstanding, will not exceed $50 million at any time outstanding.

 

(c)                                  [Intentionally
omitted].

 

(d)                                 For
purposes of determining compliance with, and the outstanding principal amount
of any particular Indebtedness Incurred pursuant to and in compliance with,
this Section 4.3:

 

(1)                                  in
the event that Indebtedness meets the criteria of more than one of the types of
Indebtedness described in Section 4.3(a) and
Section 4.3(b), the Company, in
its sole discretion, will classify such item of Indebtedness on the date of
Incurrence, and thereafter may reclassify such item of Indebtedness, and
only be required to include the amount and type of such Indebtedness in one of
such clauses;

 

(2)                                  all
Indebtedness outstanding on the date of this Indenture under a Credit Facility
shall be deemed initially Incurred on the Issue Date under Section 4.3(b)(1) and
not Section 4.3(a) or Section 4.3(b)(3);

 

55

 

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

 

(4)                                  if
obligations in respect of letters of credit are Incurred pursuant to a Credit
Facility and are being treated as Incurred pursuant to Section 4.3(b)(1) and
the letters of credit relate to other Indebtedness, then such other
Indebtedness shall not be included;

 

(5)                                  the
principal amount of any Disqualified Stock of the Company or Preferred Stock of
a Restricted Subsidiary 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;

 

(6)                                  Indebtedness
permitted by this Section 4.3
need not be permitted solely by reference to one provision permitting such
Indebtedness but may be permitted in part by one such provision and
in part by one or more other provisions of this covenant permitting such
Indebtedness; and

 

(7)                                  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.

 

(e)                                  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 4.3. The
amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof in the case of any Indebtedness issued with original
issue discount and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.

 

(f)                                    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 as of such date (and, if such Indebtedness is not permitted to be
Incurred as of such date under this Section 4.3,
the Company shall be in Default of this covenant).

 

(g)                                 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,
however, 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-denominated restriction to be exceeded if
calculated at the relevant currency exchange rate in effect on the date of such
refinancing, such U.S. dollar-denominated restriction shall be deemed not to
have been exceeded so long as the principal amount of such refinancing
Indebtedness (including any additional Indebtedness Incurred to pay interest or
premiums required by the instruments governing such Indebtedness being
refinanced and fees and other transactional expenses Incurred

 

56

 

in connection therewith) does not exceed the principal
amount of such Indebtedness being refinanced. Notwithstanding any other
provision of this Section 4.3,
the maximum amount of Indebtedness that the Company may Incur pursuant to
this Section 4.3 shall not be
deemed to be exceeded solely as a result of fluctuations in the exchange rate
of currencies. The principal amount of any Indebtedness Incurred to refinance
other Indebtedness, if Incurred in a different currency from the Indebtedness
being refinanced, shall be calculated based on the currency exchange rate
applicable to the currencies in which such refinancing Indebtedness is
denominated that is in effect on the date of such refinancing.

 

Section 4.4                                      Limitation
on Restricted Payments

 

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

 

(1)                                  declare
or pay any dividend or make any distribution on or in respect of its Capital
Stock (including any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) except:

 

(A)                              dividends
or distributions payable in Capital Stock of the Company (other than
Disqualified Stock), including options, warrants or other rights to purchase
such Capital Stock of the Company; and

 

(B)                                dividends
or distributions payable to the Company or a Restricted Subsidiary (and if such
Restricted Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of
Capital Stock on a pro rata
basis);

 

(2)                                  purchase,
redeem, retire or otherwise acquire for value any Capital Stock of the Company
or any direct or indirect parent of the Company held by Persons other than the
Company or a Restricted Subsidiary of the Company;

 

(3)                                  purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations of the Company or a Subsidiary Guarantor (other than
the purchase, repurchase, redemption, defeasance or other acquisition or
retirement of any such Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of purchase, repurchase,
redemption, defeasance or other acquisition or retirement); or

 

(4)                                  make
any Restricted Investment in any Person; (any such dividend, distribution,
purchase, redemption, repurchase, defeasance, other acquisition, retirement or
Restricted Investment referred to in clauses (1) through (4) of this Section 4.4(a) is
referred to herein as a “Restricted Payment”),
if at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:

 

(A)                              a
Default has occurred and is continuing (or would result therefrom); or

 

57

 

(B)                                the
Company is not able to Incur an additional $1.00 of Indebtedness pursuant to Section 4.3(a) after
giving effect, on a pro forma basis, to such Restricted Payment; or

 

(C)                                the
aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made subsequent to the Issue Date (other than as set forth in
clauses (1), (2), (3), (7), (8) and (9) of Section 4.4(b))
would exceed the sum of:

 

(i)                                     50%
of Consolidated Net Income for the period (treated as one accounting period)
from April 1, 2001 to the end of the most recent fiscal quarter ending
prior to the date of such Restricted Payment for which internal financial
statements are in existence (or, in case such Consolidated Net Income is a
deficit, minus 100% of such deficit); plus

 

(ii)                                  100%
of the aggregate Net Cash Proceeds or the Fair Market Value of property other
than cash (including Capital Stock of Persons engaged in the Oil and Gas
Business or property used in the Oil and Gas Business), received by the Company
from the issue or sale of its Capital Stock (other than Disqualified Stock)
subsequent to the Issue Date (other than any Net Cash Proceeds or property
received from an issuance or sale of such Capital Stock to (x) a Subsidiary of
the Company, (y) an employee stock ownership plan or (z) a trust established by
the Company or any of its Subsidiaries for the benefit of employees) and 100%
of any cash contribution to its common equity capital subsequent to the Issue
Date; plus

 

(iii)                               the amount by which
Indebtedness of the Company or its Restricted Subsidiaries is reduced on the
Company’s balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of
the Company or its Restricted Subsidiaries convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company (less the amount
of any cash, or the Fair Market Value of any other property, distributed by the
Company upon such conversion or exchange); plus

 

(iv)                              to
the extent that any Restricted Investment (other than an Investment made
pursuant to Section 4.4(b)(9)) that was made after the Issue Date
is sold for cash or otherwise liquidated or repaid for cash, the lesser of:

 

a.                                       the
cash return of capital with respect to such Restricted Investment (less the
cost of disposition, if any); and

 

b.                                      the
initial amount of such Restricted Investment; plus,

 

(v)                                 to
the extent that any Unrestricted Subsidiary of the Company designated as such
after the Issue Date is redesignated as a Restricted Subsidiary after the Issue
Date, the lesser of:

 

58

 

a.                                       the
Fair Market Value of the Company’s Investment in such Subsidiary as of the date
of such redesignation; or

 

b.                                      such
Fair Market Value, as of the date on which such Subsidiary was originally
designated as an Unrestricted Subsidiary after the Issue Date;

 

provided, however,
that no amount will be included under clauses (iv) or (v) to the
extent it is already included in Consolidated Net Income.

 

(b)                                 The
foregoing provisions of Section 4.4(a) will not prohibit:

 

(1)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Capital Stock of the Company or its direct or indirect parent or
Subordinated Obligations of the Company or a Subsidiary Guarantor made by
exchange for, or out of the Net Cash Proceeds of the substantially concurrent
sale of, Capital Stock of the Company (other than Disqualified Stock and other
than Capital Stock issued or sold to (x) a Subsidiary of the Company, (y)  an employee stock ownership plan or (z) a
trust established by the Company or any of its Subsidiaries for the benefit of
employees); provided, however,
that the amount of any such Net Cash Proceeds that are utilized for any such
acquisition or retirement will be excluded from clause (C)(ii) of the
preceding paragraph;

 

(2)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Subordinated Obligations of the Company or a Subsidiary Guarantor made by
exchange for, or out of the proceeds of the substantially concurrent sale of,
Subordinated Obligations of the Company or a Subsidiary Guarantor that, in each
case, are permitted to be Incurred pursuant to Section 4.3
and that in each case constitutes Refinancing Indebtedness;

 

(3)                                  any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Disqualified Stock of the Company or a Restricted Subsidiary made by
exchange for or out of the proceeds of the substantially concurrent sale of
Disqualified Stock of the Company or such Restricted Subsidiary, as the case may be,
that, in each case, is permitted to be Incurred pursuant to Section 4.3 and that in each case
constitutes Refinancing Indebtedness;

 

(4)                                  dividends
paid within 60 days after the date of declaration if at such date of declaration
such dividend would have complied with this provision; provided, however,
that such dividends will be included in subsequent calculations of the amount
of Restricted Payments;

 

(5)                                  so
long as no Default or Event of Default has occurred and is continuing, the
repurchase, redemption or other acquisition, cancellation or retirement for
value of Capital Stock of the Company or any of its Restricted Subsidiaries,
held by any current or former officer, director or employee of the Company or
any Restricted Subsidiary pursuant to any equity subscription agreement, stock
option agreement, shareholders’ agreement or similar agreement; provided, however, that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Capital
Stock may not exceed $5 million in the aggregate in any calendar year
(with 50% of the unused amounts in any calendar year being carried over to
succeeding calendar years);

 

59

 

(6)                                  so
long as no Default or Event of Default has occurred and is continuing, the
declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Company issued in accordance with the terms of this
Indenture to the extent such dividends are included in the definition of “Consolidated
Interest Expense;”

 

(7)                                  repurchases
of Capital Stock deemed to occur upon the exercise of stock options, warrants
or other convertible securities if such Capital Stock represents a portion of
the exercise price thereof;

 

(8)                                  the
purchase by the Company of fractional shares arising out of stock dividends,
splits or combinations or business combinations; and

 

(9)                                  Restricted
Payments in an aggregate amount not to exceed $50 million since the Issue Date
(after giving effect to any subsequent reduction in the amount of any
Investment made pursuant to this clause (9) as a result of the repayment
or other disposition thereof for cash, the amount of such reduction not to
exceed the initial amount of such Investment).

 

(c)                                  The
amount of all Restricted Payments (other than cash) shall be the Fair Market
Value on the date of such Restricted Payment of the securities or other assets
proposed to be paid,  transferred or
issued by the Company or such Restricted Subsidiary, as the case may be,
pursuant to such Restricted Payment. The Fair Market Value of any non-cash
Restricted Payment shall be determined in the manner contemplated by the
definition of the term “Fair Market Value” in Section 1.1, and the
results of such determination will be evidenced by an Officers’ Certificate
delivered to the Trustee.

 

Section 4.5                                      Limitation
on Layering

 

The
Company will not, and will not permit any Subsidiary Guarantor to, Incur any
Indebtedness that is subordinate or junior in right of payment to any of its
Senior Indebtedness and senior in right of payment to the Securities or its
Subsidiary Guarantee, as the case may be. Unsecured Indebtedness of the
Company or a Subsidiary Guarantor shall not be deemed to be subordinate or
junior to its secured Indebtedness merely because it is unsecured.

 

Section 4.6                                      Limitation
on Liens

 

The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, Incur or suffer to exist any Lien (other than
Permitted Liens) securing Indebtedness upon any of its property or assets
(including Capital Stock of its Restricted Subsidiaries), whether owned on the
Issue Date or acquired after that date, unless contemporaneously with the
Incurrence of such Liens effective provision is made to secure the Securities
or any Subsidiary Guarantee of such Restricted Subsidiary, as applicable,
equally and ratably with (or prior to in the case of Liens with respect to its
Subordinated Obligations) the Indebtedness secured by such Lien for so long as
such Indebtedness is so secured.

 

60

 

Section 4.7                                      Limitation
on Restrictions on Distributions from Restricted Subsidiaries

 

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

 

(1)                                  pay
dividends or make any other distributions on its Capital Stock to, or pay any
Indebtedness or other obligations owed to, the Company or any Restricted
Subsidiary (it being understood that the priority of any Preferred Stock in
receiving dividends or liquidating distributions prior to dividends or
liquidating distributions being paid on Common Stock shall not be deemed a
restriction on the ability to make distributions on Capital Stock);

 

(2)                                  make
any loans or advances to the Company or any Restricted Subsidiary (it being
understood that the subordination of loans or advances made to the Company or
any Restricted Subsidiary to other Indebtedness Incurred by the Company or any
Restricted Subsidiary shall not be deemed a restriction on the ability to make
loans or advances); or

 

(3)                                  transfer
any of its property or assets to the Company or any Restricted Subsidiary.

 

(b)                                 The
provisions of Section 4.7(a) will not prohibit:

 

(1)                                  any
encumbrance or restriction pursuant to an agreement in effect at or entered
into on the Issue Date, including this Indenture and a Credit Facility in
effect on such date;

 

(2)                                  any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Capital Stock or Indebtedness Incurred by a
Restricted Subsidiary on or before the date on which such Restricted Subsidiary
became a Restricted Subsidiary (other than Capital Stock or Indebtedness
Incurred as consideration in, or 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 acquired by the Company or in contemplation of the transaction) and
outstanding on such date;

 

(3)                                  any
encumbrance or restriction pursuant to an agreement effecting a refunding,
replacement or refinancing of Indebtedness Incurred pursuant to an agreement
referred to in Section 4.7(b)(1), Section 4.7(b)(2), Section 4.7(b)(4) or
this Section 4.7(b)(3) or contained in any amendment to an
agreement referred to in Section 4.7(b)(1), Section 4.7(b)(2),
Section 4.7(b)(4) or this Section 4.7(b)(3);
provided, however, that the encumbrances and
restrictions contained in any such agreement are no less favorable, in the
aggregate, in any material respect to the Holders of the Securities than the
encumbrances and restrictions contained in such agreements referred to in Section 4.7(b)(1),
Section 4.7(b)(2) or Section 4.7(b)(4) on
the Issue Date or the date the applicable Restricted Subsidiary became a
Restricted Subsidiary, whichever is applicable;

 

(4)                                  in
the case of Section 4.7(a)(3), any encumbrance or restriction:

 

61

 

(A)                              that
restricts in a customary manner the subletting, assignment or transfer of any
property or asset that is subject to a lease, farm-in agreement or farm-out
agreement, license or similar contract, or the assignment or transfer of any
such lease, license or other contract;

 

(B)                                contained
in mortgages, pledges or other security agreements permitted under this
Indenture securing Indebtedness or other obligations of the Company or a
Restricted Subsidiary to the extent such encumbrances or restrictions restrict
the transfer of the property subject to such mortgages, pledges or other
security agreements;

 

(C)                                pursuant
to customary provisions restricting dispositions of real property interests set
forth in any reciprocal easement agreements of the Company or any Restricted
Subsidiary;

 

(D)                               with
respect to the disposition or distribution of property or assets in operating
agreements, joint venture agreements, development agreements, area of mutual
interest agreements and other agreements that are customary in the Oil and Gas
Business and entered into in the ordinary course of business;

 

(E)                                 pursuant
to any merger agreements, stock purchase agreements, asset sale agreements and
similar agreements limiting the transfer of any property assets pending
consummation of the subject transaction; or

 

(F)                                 pursuant
to typical cash management plans that provide for an orderly repatriation of
funds designed to optimize after-tax cash flow and agreed to by all shareholders
of a Foreign Subsidiary;

 

(5)                                  (i) purchase
money obligations for property acquired in the ordinary course of business and (ii) Capitalized
Lease Obligations permitted under this Indenture, in each case that impose
encumbrances or restrictions of the nature described in Section 4.7(a)(3) on
the property or assets so acquired;

 

(6)                                  any
restriction with respect to a Restricted Subsidiary (or any of its property or
assets) imposed pursuant to an agreement entered into for the direct or
indirect sale or disposition of all or substantially all of the Capital Stock
or properties and assets of such Restricted Subsidiary (or the property or
assets that are subject to such restriction) pending the closing of such sale
or disposition; and

 

(7)                                  any
restriction on cash or other deposits or net worth imposed by customers under
agreements entered into by the Company or any Restricted Subsidiary in the
ordinary course of business.

 

Section 4.8                                      Limitation
on Sales of Assets and Subsidiary Stock

 

(a)                                  The
Company will not, and will not permit any of its Restricted Subsidiaries to,
make any Asset Disposition unless:

 

62

 

(1)                                  the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at least equal to the Fair Market Value (such Fair Market Value
to be determined on the date of contractually agreeing to such Asset
Disposition and in accordance with the definition of such term in Section 1.1,
the results of which determination shall be set forth in an Officers’
Certificate delivered to the Trustee), of the shares or other assets subject to
such Asset Disposition;

 

(2)                                  at
least 75% of the consideration from such Asset Disposition and all other Asset
Dispositions since the Issue Date received by the Company or such Restricted
Subsidiary, as the case may be, is in the form of cash or Cash
Equivalents; and

 

(3)                                  an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company or such Restricted Subsidiary, as the case may be:

 

(A)                              first,
to the extent the Company or any Restricted Subsidiary, as the case may be,
elects (or is required by the terms of any Senior Indebtedness of the Company
or a Subsidiary Guarantor), to prepay, repay or purchase any such Senior
Indebtedness or Indebtedness of a Restricted Subsidiary that is not a
Subsidiary Guarantor (in each case other than Indebtedness owed to the Company
or an Affiliate of the Company) within 365 days (or, in the case of an Asset
Disposition that results in Net Available Cash subject to the benefits of
legislation similar to the American Jobs Creation Act of 2004, within 730 days)
from the later of the date of such Asset Disposition or the receipt of such Net
Available Cash; and

 

(B)                                second,
to the extent of the balance of such Net Available Cash after application in
accordance with clause (A), to the extent the Company or such Restricted
Subsidiary elects, to invest in Additional Assets within 365 days (or, in the
case of an Asset Disposition that results in Net Available Cash subject to the
benefits of legislation similar to the American Jobs Creation Act of 2004,
within 730 days) from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; provided,
however, that this requirement shall be deemed to be satisfied if an
agreement (including a lease, whether a capital lease or an operating lease)
committing to make the investment referred to in this clause (B) is
entered into within such 365 days (or 730 days, as the case may be) and
such Net Available Cash is subsequently applied in accordance with such
agreement within six months following such agreement;

 

provided
that pending the final application of any such Net Available Cash in accordance
with clause (A) or clause (B) above, the Company and its Restricted
Subsidiaries may temporarily reduce Indebtedness or otherwise invest such
Net Available Cash in any manner not prohibited by this Indenture. For purposes
of this Section 4.8, the Gulf of Mexico Divestiture shall be deemed to
have occurred since the Issue Date.

 

(b)                                 Any
Net Available Cash from Asset Dispositions that is not applied or invested (or
subject to an agreement committing to invest) as provided in the preceding
paragraph will be deemed to constitute “Excess
Proceeds.”  On the 366th day
after an Asset Disposition (or, in the case of an Asset Disposition that
results in Net Available Cash subject to the benefits of legislation similar to
the American Jobs Creation Act of 2004, on the 731st day thereafter), if the

 

63

 

aggregate amount of Excess Proceeds exceeds
$20 million, a “triggering event” shall be deemed to have occurred, which
will result in the obligation of the Company to make an offer (“Asset Disposition Offer”) to all Holders
of Securities, and to the extent required by the terms of its other Senior
Subordinated Indebtedness, to all holders of its other Senior Subordinated
Indebtedness outstanding with similar provisions requiring the Company to make
an offer to purchase such Senior Subordinated Indebtedness with the proceeds
from any Asset Disposition (“Pari Passu
Notes”), to purchase the maximum principal amount of Securities and
any such Pari Passu Notes to which the Asset Disposition 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 Securities and Pari Passu Notes
plus accrued and unpaid interest to the date of purchase (subject to the right
of Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the Asset Disposition Purchase
Date referred to below), in accordance with the procedures set forth in this
Indenture 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
amount of Securities and Pari Passu Notes so validly tendered and not properly
withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds,
the Company may use any remaining Excess Proceeds for general corporate
purposes, subject to other covenants contained in this Indenture. If the
aggregate principal amount of Securities surrendered by Holders thereof and
other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds
the amount of Excess Proceeds, then (a) the Trustee shall determine the
aggregate principal amount of Securities, on the one hand, and Pari Passu
Notes, on the other hand, to be purchased on a pro
rata basis based on the aggregate principal amount of tendered
Securities and Pari Passu Notes, respectively, and (b) the amount of the
Excess Proceeds allocable to the Securities shall be applied to purchase
Securities on a pro rata basis
based on the aggregate principal amount of tendered Securities. Upon completion
of such Asset Disposition Offer, the amount of Excess Proceeds shall be reset
at zero.

 

(c)                                  The
Asset Disposition Offer will remain open for a period of 20 Business Days
following its commencement, except to the extent that a longer period is
required by applicable law (the “Asset
Disposition Offer Period”). No later than five Business Days after
the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase  Date”), the Company will purchase the
principal amount of Securities and Pari Passu Notes required to be purchased
pursuant to this Section 4.8 (the “Asset
Disposition Offer Amount”) or, if less than the Asset Disposition
Offer Amount has been so validly tendered, all Securities and Pari Passu Notes
validly tendered in response to the Asset Disposition Offer.

 

(d)                                 [Intentionally
omitted.]

 

(e)                                  On
or before the Asset Disposition Purchase Date, the Company will, to the extent
lawful, accept for payment, on a pro rata
basis to the extent necessary, the Asset Disposition Offer Amount of Securities
and Pari Passu Notes or portions of Securities and Pari Passu Notes so validly
tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or
if less than the Asset Disposition Offer Amount has been validly tendered and
not properly withdrawn, all Securities and Pari Passu Notes so validly tendered
and not properly withdrawn, in each case in integral multiples of $1,000. The
Company will deliver to the Trustee an Officers’ Certificate stating that the
Securities were accepted for payment by the

 

64

 

Company in accordance with the terms of this Section 4.8
and, in addition, the Company will deliver all certificates and notes required,
if any, by the agreements governing the Pari Passu Notes. The Company or the
Paying Agent, as the case may be, will promptly (but in any case not later
than five Business Days after termination of the Asset Disposition Offer
Period) mail or deliver to each tendering Holder of Securities or holder or
lender of Pari Passu Notes, as the case may be, an amount equal to the
purchase price of the Securities or Pari Passu Notes so validly tendered and
not properly withdrawn by such holder or lender, as the case may be, and
accepted by the Company for purchase, and the Company will promptly issue new
Securities, and the Trustee, upon delivery of an Officers’ Certificate from the
Company, will authenticate and mail or deliver such new Securities to such
Holder, in a principal amount equal to any unpurchased portion of the
Securities surrendered. In addition, the Company will take any and all other
actions required by the agreements governing the Pari Passu Notes. Any Security
not so accepted will be promptly mailed or delivered by the Company to the
Holder thereof. The Company will publicly announce the results of the Asset
Disposition Offer on the Asset Disposition Purchase Date.

 

(f)                                    For
the purposes of this Section 4.8, the following will be deemed to
be cash:

 

(1)                                  the
assumption by the transferee of Indebtedness (other than Subordinated
Obligations or Disqualified Stock) of the Company or a Subsidiary Guarantor or
Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor and
the release of the Company or such Subsidiary Guarantor or other Restricted
Subsidiary from all liability on such Indebtedness in connection with such
Asset Disposition (in which case the Company will, without further action, be
deemed to have applied such deemed cash to Indebtedness in accordance with Section 4.8(a)(3)(A);
and

 

(2)                                  securities,
notes or other obligations received by the Company or any Restricted Subsidiary
of the Company from the transferee that are converted by the Company or such
Restricted Subsidiary into cash within 180 days.

 

(g)                                 [Intentionally
omitted.]

 

(h)                                 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 Securities pursuant to this Section 4.8. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this Section 4.8, the Company will comply with
the applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section 4.8 by virtue of any
conflict.

 

Section 4.9                                      Limitation
on Affiliate Transactions

 

(a)                                  The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or conduct any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company (an “Affiliate Transaction”) unless:

 

65

 

(1)                                  the
terms of such Affiliate Transaction are no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those that could be
obtained in a comparable transaction at the time of such transaction in arm’s-length
dealings with a Person who is not such an Affiliate or, if no comparable
transaction with a Person that is not an Affiliate is available, on terms that
are fair from a financial point of view to the Company or such Restricted
Subsidiary;

 

(2)                                  in
the event such Affiliate Transaction involves an aggregate consideration in
excess of $25 million, an Officers’ Certificate shall have been delivered to
the Trustee certifying that such Affiliate Transaction satisfies the criteria
in clause (1) of this Section 4.9 and that the terms of such transaction
have been approved by a majority of the members of the Board of Directors of
the Company; and

 

(3)                                  in
the event such Affiliate Transaction involves an aggregate consideration in
excess of $50 million, the Officers’ Certificate referred to in clause (2) of
this Section 4.9 shall also include a certification that the terms
of such transaction shall have been approved by a majority of the members of
the Board of Directors of the Company having no personal stake in such
transaction (other than through ownership of Capital Stock of the Company), if
any, or if there are no such members, then the Company shall have received a
written opinion from an independent investment banking, accounting or appraisal
firm of nationally recognized standing that the terms of such Affiliate
Transaction are not materially less favorable to the Company or the applicable
Restricted Subsidiary than those that might reasonably have been obtained in a
comparable transaction at such time on an arm’s-length basis from a Person that
is not an Affiliate or that such terms are fair from a financial point of view
to the Company or the applicable Restricted Subsidiary.

 

(b)                                 Section 4.9(a) will
not apply to:

 

(1)                                  any
Restricted Payment or any Permitted Investment permitted to be made pursuant to
Section 4.4;

 

(2)                                  any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment agreements and other
compensation arrangements, options to purchase Capital Stock of the Company,
restricted stock plans, long-term incentive plans, stock appreciation rights
plans,  participation plans or similar
employee benefits plans and/or indemnity provided on behalf of directors,
officers and employees either in the ordinary course of business or as approved
by the Board of Directors of the Company;

 

(3)                                  loans
or advances to employees, officers or directors in the ordinary course of
business of the Company or any of its Restricted Subsidiaries, in each case
only as permitted by Section 402 of the Sarbanes Oxley Act of 2002, but in
any event not to exceed $5 million in the aggregate outstanding at any one time
with respect to all loans or advances made since the Issue Date;

 

(4)                                  any
transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries;

 

66

 

(5)                                  any
transaction effected pursuant to the terms of an agreement that was entered
into, alone or as part of a series of agreements, pursuant to or in
accordance with this Section 4.9; and

 

(6)                                  the
payment of reasonable and customary fees and compensation to, and indemnity
provided on behalf of, officers and directors of the Company or any Restricted
Subsidiary.

 

Section 4.10                                Limitation
on Sale of Capital Stock of Restricted Subsidiaries

 

(a)                                  The
Company will not, and will not permit any Restricted Subsidiary to, transfer,
convey, sell, lease or otherwise dispose of any Voting Stock of any Restricted
Subsidiary or issue any Voting Stock of a Restricted Subsidiary (other than, if
necessary, shares of its Voting Stock constituting directors’ qualifying
shares) to any Person except:

 

(1)                                  to
the Company or a Wholly-Owned Subsidiary; or

 

(2)                                  in
compliance with Section 4.8 and immediately after giving effect to
such issuance or sale, such Restricted Subsidiary would continue to be a
Restricted Subsidiary.

 

(b)                                 Notwithstanding
the preceding paragraph, the Company may sell all the Voting Stock of a
Restricted Subsidiary as long as the Company complies with Section 4.8.

 

Section 4.11                                Future
Subsidiary Guarantees

 

The
Company will not permit any Restricted Subsidiary (other than a Foreign
Subsidiary or a Restricted Subsidiary that is already a Subsidiary Guarantor)
to Guarantee the payment of any Indebtedness of the Company or any other
Subsidiary Guarantor, unless such Restricted Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Subsidiary Guarantee of such Restricted Subsidiary pursuant to this Indenture,
substantially in the form attached hereto as Exhibit F.

 

Section 4.12                                Maintenance
of Properties; Insurance

 

The
Company shall cause all material Properties owned by the Company or any
Restricted Subsidiary and used or held for use in the conduct of its business
or the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order (ordinary wear and tear excepted); provided, however, that nothing in this Section 4.12
shall prevent the Company from discontinuing the maintenance of any of such
Properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Restricted Subsidiary and
not disadvantageous in any material respect to the Holders. Notwithstanding the
foregoing, nothing contained in this Section 4.12 shall limit or
impair in any way the right of the Company and its Restricted Subsidiaries to
sell, divest and otherwise to engage in transactions that are otherwise
permitted by this Indenture.

 

The
Company shall at all times keep all of its and its Restricted Subsidiaries’
Properties which are of an insurable nature insured with insurers, believed by
the Company to be

 

67

 

responsible, against loss or damage to the extent that
Property of similar character is usually so insured by corporations similarly
situated and owning like Properties.

 

The
Company may adopt such other plan or method of protection, in lieu of or
supplemental to insurance with insurers, whether by the establishment of an
insurance fund or reserve to be held and applied to make good losses from
casualties, or otherwise, conforming to the systems of self-insurance
maintained by corporations similarly situated and owning like Properties, as may be
determined by the Company.

 

Section 4.13                                Payments
for Consent

 

The
Company will not, and will not permit any of the Restricted Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fees or otherwise, to any Holder (or beneficial owner) of any
Securities for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of this Indenture or the Securities unless such
consideration is offered to be paid or is paid to all Holders  (or beneficial owners) of the Securities that
consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or amendment.

 

Section 4.14                                Change
of Control

 

If
a Change of Control occurs, then such Change of Control shall constitute a “triggering
event” which shall result in the obligation of the Company to offer to
repurchase from each Holder all or any part of such Holder’s Securities
(in principal amounts equal to $1,000 or an integral multiple thereof), at a
purchase price in cash equal to 101% of the principal amount of the Securities
plus accrued and unpaid interest, if any, to the date of purchase (subject to
the right of Holders of record on the relevant record date to receive interest
due on an Interest Payment Date that is on or prior to the Change of Control
Payment date referred to below).

 

Within
30 days following any Change of Control, the Company will mail a notice (the “Change of Control Offer”) to each Holder,
with a copy to the Trustee, stating: (1) that a Change of Control has
occurred and that such Holder has the right to require the Company to purchase
such Holder’s Securities, at a purchase price in cash equal to 101% of the
principal amount of the Securities plus accrued and unpaid interest, if any, to
the date of purchase (subject to the right of Holders of record on the relevant
record date to receive interest due on an Interest Payment Date that is on or
prior to the Change of Control Payment Date referred to below) (the “Change of Control Payment”); (2) the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the “Change
of Control Payment Date”); and (3) the procedures determined by
the Company, consistent with this Indenture, that a Holder must follow in order
to have its Securities repurchased.

 

On
or before the Change of Control Payment Date, the Company will, to the extent
lawful:  (1) accept for payment all
Securities (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 Securities (or portions
thereof) so tendered; and (3) deliver or cause to be delivered to the Trustee
the Securities (or portions thereof) so accepted

 

68

 

together with an Officers’ Certificate stating the aggregate
principal amount of Securities (or portions thereof) being purchased by the
Company.

 

The
Paying Agent will promptly mail to each Holder of Securities so tendered the
Change of Control Payment for such Securities (or, if the Securities are in
global form, make such payment through the facilities of the Depositary), and
the Trustee will promptly authenticate and mail (or cause to be transferred by
book-entry) to each Holder a new Security equal in principal amount to, and
evidencing the same Indebtedness as any unpurchased portion of the Securities
surrendered, if any, provided
that each such Security will be in a principal amount of $1,000 or an integral
multiple of $1,000.

 

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

 

Prior
to mailing a Change of Control Offer, and as a condition to such mailing, (i) all
Senior Indebtedness of the Company or any Subsidiary Guarantor must be repaid
in full, or the Company must offer to repay all such Senior Indebtedness and
make payment to the holders that accept such offer and obtain waivers of any
event of default from the remaining holders of such Senior Indebtedness or (ii) the
requisite holders of each issue of  such
Senior Indebtedness must consent to such Change of Control Offer being made.
The Company covenants to effect such repayment or obtain such consent prior to
the Change of Control Payment Date, it being a Default of this Section 4.14
if the Company fails to comply with this Section.

 

The
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this Section 4.14
applicable to a Change of Control Offer made by the Company and purchases all
Securities validly tendered and not withdrawn under such Change of Control
Offer.

 

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 Securities pursuant to this Section 4.14. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this Section 4.14, the Company will comply with
the applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section 4.14 by virtue of the
conflict.

 

Section 4.15                                Maintenance
of Office or Agency for Registration of Transfer, Exchange and Payment of
Securities

 

So
long as any of the Securities shall remain outstanding, the Company will, in
accordance with Section 2.3 hereof, maintain an office or agency
(which may be an office or “drop” facility of the Trustee or an affiliate
of the Trustee, or the Registrar) in the continental United States, where the
Securities may be surrendered for exchange or registration of transfer as
in this Indenture provided, and where notices and demands to or upon the
Company in respect to the Securities may be served, and the Company will,
in accordance with Section 2.3 hereof, maintain in the City and
State of New York an office or agency where the Securities may be
presented or surrendered for payment. The Company may also from time to
time designate one

 

69

 

or more other offices or agencies where Securities may be
presented or surrendered for any and all such purposes and may from time
to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the City and State of New
York where Securities may be presented for payment. The Company will give
to Trustee prompt written notice of the location of any such office or agency
and of any change of location thereof.

 

Section 4.16                                Appointment
to Fill a Vacancy in the Office of Trustee

 

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

 

Section 4.17                                Provision
as to Paying Agent

 

If
the Company shall act as its own Paying Agent, whether directly or through any
Subsidiary, it will, by 11:00 a.m., New York City time, on each due date
of the principal of, premium, if any, or interest on the Securities, set aside,
segregate and hold in trust for the benefit of the Persons entitled thereto, a
sum sufficient to pay such principal or premium or interest so becoming due and
will notify the Trustee of any failure to take such action.

 

Section 4.18                                Maintenance
of Corporate Existence

 

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

 

Section 4.19                                Compliance
Certificate

 

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

 

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

 

70

 

 

Section 4.20                                Taxes

 

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

 

Section 4.21                                Stay, Extension and Usury Laws

 

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

 

Section 4.22                                Further Instruments and Acts

 

Upon
request of the Trustee, the Company will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.

 

Section 4.23                                Effectiveness of Covenants

 

The
covenants described under Section 4.3,
Section 4.4, Section 4.7,
Section 4.8, Section 4.9, Section 4.10,  Section 4.11
and clause (c) under Section 5.1 will no longer be in effect
from and after the time that the Company delivers to the Trustee an Officer’s
Certificate certifying that the Securities have an Investment Grade Rating from
either S&P or Moody’s, provided that
no Default or Event of Default (other than with respect to any such Section or
clause) has occurred and is continuing under this Indenture at the time of such
notification.

 

ARTICLE V

SUCCESSOR COMPANY

 

Section 5.1                                      Merger and Consolidation

 

The
Company will not consolidate with or merge with or into, or sell, convey,
assign, transfer or otherwise dispose of all or substantially all its
properties and assets to, any Person, unless:

 

(a)                                  the resulting, surviving or transferee
Person (the “Successor Company”)
will be a corporation, partnership, trust or limited liability company
organized and existing under the laws of the United States of America, any
State of the United States or the District of Columbia and the Successor
Company (if not the Company) will expressly assume, by supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of

 

71

 

the Company under the Securities and this Indenture
and will expressly assume all of the obligations of the Company under any
Registration Rights Agreement then in effect;

 

(b)                                 immediately after giving effect to such
transaction (and treating any Indebtedness that becomes an obligation of the
Successor Company or any Subsidiary of the Successor Company as a result of
such transaction as having been Incurred by the Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of Default
shall have occurred and be continuing;

 

(c)                                  immediately after giving effect to such
transaction, on a pro forma basis (on the assumption that the transaction
occurred on the first day of the period of four full fiscal quarters ending
immediately prior to the consummation of such transaction, with the appropriate
adjustments with respect to such transaction being included in such pro forma
calculation) the Successor Company would be able to Incur at least an
additional $1.00 of Indebtedness pursuant to Section 4.3(a); and

 

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

 

For
purposes of this Section 5.1, the sale, conveyance, assignment,
transfer, or other disposition of all or substantially all of the properties
and assets of one or more Subsidiaries of the Company, which properties and
assets, if held by the Company instead of such Subsidiaries, would constitute
all or substantially all of the properties and assets of the Company on a
consolidated basis, shall be deemed to be the transfer of all or substantially
all of the properties and assets of the Company. In addition, the Company shall
not, directly or indirectly, lease all or substantially all of the properties
and assets of it and its Restricted Subsidiaries taken as a whole, in one or
more related transactions, to any other Person.

 

The
Successor Company will succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture.

 

Notwithstanding
the preceding clause (c) of this Section 5.1, any Restricted
Subsidiary, or any Person with no Indebtedness outstanding, may consolidate
with or merge with or into the Company.

 

ARTICLE VI

DEFAULTS AND REMEDIES

 

Section 6.1                                      Events of Default

 

Each
of the following is an “Event of Default”:

 

(1)                                  default in any payment of interest on any
Security when due, continued for 30 days, whether or not such payment is
prohibited by the provisions described under Article X;

 

72

 

(2)                                  default in the payment of principal of or
premium, if any, on any Security when due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise, whether or
not such payment is prohibited by the provisions described under Article X;

 

(3)                                  failure by the Company to comply with its
obligations under Section 5.1;

 

(4)                                  failure by the Company to comply for 30
days after notice with any of its obligations under Article IV
above (other than a failure to purchase Securities which will constitute an
Event of Default under clause (2) of this Section 6.1);

 

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

 

(6)                                  default under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Restricted Subsidiaries (or the payment of which is Guaranteed by the
Company or any of its Restricted Subsidiaries), other than the Securities or
any Indebtedness owed to the Company or a Restricted Subsidiary, whether such
Indebtedness or Guarantee now exists, or is created after the Issue Date, which
default:

 

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

 

(B)                                results in the acceleration of such
Indebtedness prior to its 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 Borrowed Money Payment
Default or the maturity of which has been so accelerated, aggregates
$25 million or more; provided, however, that if any such Borrowed Money Payment 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 Borrowed Money Payment Default
beyond the applicable grace period or the occurrence of such acceleration, as
the case may be, such Event of Default and any consequential acceleration
of the Securities shall be automatically rescinded, so long as such rescission
does not conflict with any judgment or decree of a competent court;

 

(7)                                  (A)                              the Company or a Significant Subsidiary or a group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law:

 

(i)                                     commences a voluntary case or proceeding;

 

(ii)                                  consents to the entry of a judgment,
decree or order for relief against it in an involuntary case or proceeding;

 

73

 

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

 

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

 

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

 

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

 

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

 

(i)                                     is for relief against the Company or any
Significant Subsidiary or a group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary in an involuntary case;

 

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

 

(iii)                               orders the winding up or liquidation of the Company or
any Significant Subsidiary or a group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries) would constitute a Significant
Subsidiary;

 

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

 

(8)                                  any Subsidiary Guarantee for any reason
ceases to be, or is asserted by the Company or any Subsidiary Guarantor, as applicable,
not to be, in full force and effect, enforceable in accordance with its terms,
except pursuant to the release of any such Subsidiary Guarantee in accordance
with this Indenture; or

 

(9)                                  failure by the Company or any Significant
Subsidiary or group of Restricted Subsidiaries that, taken together (as of the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary to pay
final judgments aggregating in excess of $25 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.

 

However, a Default under
clauses (4) and (5) of this Section 6.1 will not
constitute an Event of Default until the Trustee or the Holders of at least 25%
in principal amount of the outstanding

 

74

 

Securities notify the
Company of the Default and the Company does not cure such Default within the
time specified in clauses (4) and (5) of this Section 6.1
after receipt of such notice. Such notice must specify the Default, demand that
it be remedied and state that such notice is a “Notice of Default.”

 

Section 6.2                                      Acceleration of Maturity; Rescission and
Annulment

 

If
an Event of Default (other than an Event of Default described in clause (7) of
Section 6.1) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the outstanding
Securities by notice to the Company and the Trustee, may, and the Trustee at
the request of such Holders shall, declare the principal of, premium, if any,
and accrued and unpaid interest, if any, on all the Securities to be due and payable.
Upon such a declaration, such principal, premium and accrued and unpaid
interest will be due and payable immediately. If an Event of Default described
in clause (7) of Section 6.1 above occurs and is continuing,
the principal of, premium, if any, and accrued and unpaid interest on all the
Securities will become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. The
Holders of a majority in principal amount of the outstanding Securities by
notice to the Trustee may, on behalf of the Holders of all the Securities,
rescind any such acceleration with respect to the Securities and its
consequences if (1) rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (2) all existing Events of
Default, other than the nonpayment of the principal of, premium, if any, and
interest on the Securities that have become due solely by such declaration of
acceleration, have been cured or waived.

 

Section 6.3                                      Other Remedies

 

If
an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal of, premium, if any, or
interest on the Securities or to enforce the performance of any provision of
the Securities or this Indenture and may take any necessary action
requested of it as Trustee to settle, compromise, adjust or otherwise conclude
any proceeding to which it is a party.

 

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

 

Section 6.4                                      Waiver of Past Defaults

 

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

 

75

 

waiver shall extend to any subsequent or other Default or
Event of Default or impair any consequent right.

 

Section 6.5                                      Control by Majority

 

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

 

Section 6.6                                      Limitation on Suits

 

Except
as provided in Section 6.7, a Holder may not pursue any remedy
with respect to this Indenture, the Securities or any Subsidiary Guarantee
unless:

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.7                                      Rights of Holders to Receive Payment

 

Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of, premium, if any, and (subject to Section 2.11)
interest on the Securities held by such Holder, on or after the respective due
dates expressed in the Securities, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.

 

76

 

Section 6.8                                      Collection Suit by Trustee

 

If
an Event of Default specified in Section 6.1(1) or
Section 6.1(2) occurs and
is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount then due
and owing (together with interest on overdue principal and premium, if any, and
on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.7.

 

Section 6.9                                      Trustee May File Proofs of Claim

 

The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim under Section 7.7 for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and its
counsel) and the Holders allowed in any judicial proceedings relative to the
Company, its Subsidiaries or their respective creditors or properties and,
unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.

 

Section 6.10                                Priorities

 

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

 

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

 

Second: subject to the
provisions of Article X and Section 11.9, to Holders
for amounts due and unpaid on the Securities for principal and interest and
premium, if any, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Securities for principal and interest and
premium, if any, respectively; and

 

Third: to the Company.

 

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

 

Section 6.11                                Undertaking for Costs

 

In
any suit for the enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken or omitted by it as Trustee,
a court in its discretion may

 

77

 

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

 

ARTICLE VII

TRUSTEE

 

Section 7.1                                      Duties of Trustee

 

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

 

(b)                                 Except during the continuance of an Event
of Default: (i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and (ii) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

78

 

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

 

Section 7.2                                      Rights of Trustee.

 

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

 

(b)                                 Before the Trustee acts or refrains from
acting, it may require an Officers’ Certificate or an Opinion of Counsel or
both, all of which shall conform to the provisions of Section 12.05.
The Trustee shall be fully protected and shall not be liable for any action it
takes or omits to take in good faith in reliance on the Officers’ Certificate
or Opinion of Counsel.

 

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

 

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

 

(e)                                  The Trustee may consult with
counsel, and the advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Securities shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.

 

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

 

(g)                                 The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and if the Trustee shall determine in good
faith to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney, upon reasonable notice to the Company and during business hours,
and shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation.

 

(h)                                 The rights, privileges, immunities and
protections afforded to the Trustee pursuant to this Indenture (including,
without limitation, the right to be indemnified) shall also be afforded

 

79

 

to the Trustee in each of its capacities hereunder, including
Paying Agent, Registrar, Securities Custodian or transfer agent.

 

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

 

Section 7.3                                      Individual Rights of Trustee

 

The
Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.

 

Section 7.4                                      Trustee’s Disclaimer

 

The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company’s use of the proceeds from the Securities, it shall
not be responsible for the use or application of any money received by any
Paying Agent (other than itself as Paying Agent), and it shall not be
responsible for any statement of the Company in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee’s certificate of authentication.

 

Section 7.5                                      Notice of Defaults

 

If
a Default occurs and is continuing and is known to the Trustee, the Trustee
shall mail to each Holder notice of the Default within 90 days after it occurs.
Except in the case of a Default in payment of principal of, premium, if any, or
interest on, any Security (including payments pursuant to the optional
redemption or required repurchase provisions of such Security), the Trustee may withhold
the notice if and so long as its board of directors, the executive committee of
its board of directors or a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders.

 

Section 7.6                                      Reports by Trustee to Holders

 

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

 

(b)                                 A copy of each report at the time of its
mailing to Holders shall be filed by the Company with the SEC and each stock
exchange (if any) on which the Securities are listed. The

 

80

 

Company agrees to notify promptly the Trustee whenever
the Securities become listed on any stock exchange and of any delisting
thereof.

 

Section 7.7                                      Compensation and Indemnity

 

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

 

(b)                                 To secure the Company’s payment
obligations in this Section 7.7,
the Trustee shall have a lien prior to the Securities on all money or other
property held or collected by the Trustee other than money or other property
held in trust to pay principal of, premium, if any, and interest on particular
Securities. The Trustee’s right to receive payment of any amounts due under
this Section 7.7 shall not be
subordinate to any other liability or indebtedness of the Company.

 

(c)                                  The Company’s payment obligations
pursuant to this Section 7.7
shall survive the discharge of this Indenture and the resignation or removal of
the Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(7) with
respect to the Company, the expenses are intended to constitute expenses of
administration under any Bankruptcy Law.

 

81

 

Section 7.8                                      Replacement of Trustee

 

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

 

(b)                                 The Trustee may resign at any time
upon at least 20 days’ prior written notice to the Company. The Holders of a
majority in outstanding principal amount of the Securities may remove the
Trustee by so notifying the Trustee and the Company and may appoint a
successor Trustee. The Company shall remove the Trustee if: (i) the
Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent; (iii) a Custodian
or other public officer takes charge of the Trustee or its property; or (iv) the
Trustee otherwise becomes incapable of acting.

 

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

 

(d)                                 A successor Trustee shall deliver a
written acceptance of its appointment to the retiring Trustee and to the
Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. The successor Trustee shall
mail a notice of its succession to the Holders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.7.

 

(e)                                  If a successor Trustee does not take
office within 30 days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company or the Holders of 10% in outstanding principal
amount of the Securities may petition any court of competent jurisdiction
for the appointment of a successor Trustee.

 

(f)                                    If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

 

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

 

Section 7.9                                      Successor Trustee by Merger

 

(a)                                  If the Trustee consolidates with, merges
or converts into, or transfers all or substantially all its corporate trust
business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation or banking association without
any further act shall be the successor Trustee, but only if it is otherwise
eligible hereunder. As soon as practicable, the successor Trustee shall mail a
notice of its succession to the Company and the Holders.

 

82

 

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

 

Section 7.10                                Eligibility; Disqualification

 

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

 

Section 7.11                                Preferential Collection of Claims Against
Company

 

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

 

ARTICLE VIII

DISCHARGE OF INDENTURE; DEFEASANCE

 

Section 8.1                                      Discharge of Liability on Securities;
Defeasance

 

(a)                                  Subject to Section 8.1(c),
when (i)(x) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.7) for
cancellation or (y) all outstanding Securities not theretofore delivered for
cancellation have become due and payable, whether at their Stated Maturity or
upon redemption, or will become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name and
at the expense of the Company and the Company irrevocably deposits or causes to
be deposited with the Trustee as trust funds in trust solely for the benefit of
the Holders money in U.S. dollars, U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest to the date
of their Stated Maturity or redemption, (ii) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or shall
occur as a result of such deposit and such deposit will not result in a

 

83

 

breach or violation of, or constitute a default under,
any other instrument to which the Company or any Subsidiary Guarantor is a
party or by which the Company or any Subsidiary Guarantor is bound; (iii) the
Company has paid or caused to be paid (or has deposited or caused to be
deposited with the Trustee trust funds pursuant to clause (i) above with
respect to the payment of) all sums payable by it under this Indenture and the
Securities; and (iv) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward the
payment of such Securities at maturity or the Redemption Date, as the case may be,
then the Trustee shall acknowledge satisfaction and discharge of this Indenture
on demand of the Company (accompanied by an Officers’ Certificate and an Opinion
of Counsel stating that all conditions precedent specified herein relating to
the satisfaction and discharge of this Indenture have been complied with) and
at the cost and expense of the Company.

 

(b)                                 Subject to Section 8.1(c) and
Section 8.2, the Company at any time may terminate (i) all
its obligations under the Securities and this Indenture (“legal defeasance option”), and after
giving effect to such legal defeasance, any omission to comply with such
obligations shall no longer constitute a Default or Event of Default or (ii) its
obligations under, Section 4.2, Section 4.3, Section 4.4, Section 4.5, Section 4.6, Section 4.7, Section 4.8, Section 4.9, Section 4.10, Section 4.11, Section 4.12, Section 4.14, Section 4.20
and clause (c) of Section 5.1
and the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
with such covenants shall no longer constitute a Default or an Event of Default
under Section 6.1(3) (solely
as it relates to clause (c) of Section 5.1)
and Section 6.1(4) and the
operation of Sections 6.1(6), 6.1(7) (with respect only to
Significant Subsidiaries), 6.1(8) and 6.1(9) and the
events specified in such Sections shall no longer constitute an Event of
Default (clause (ii) being referred to as the “covenant defeasance option”), but except as specified above,
the remainder of this Indenture and the Securities shall be unaffected thereby.
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option or its covenant defeasance option, each Subsidiary
Guarantor shall be released from its obligations with respect to its Subsidiary
Guarantee, and any security for the Securities (other than the trust referred
to in Section 8.2(1)) shall be released.

 

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

 

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

 

(c)                                  Notwithstanding the provisions of Section 8.1(a) and Section 8.1(b), the obligations of the
Company in Section 2.2, Section 2.3, Section 2.4,
Section 2.5, Section 2.6,

 

84

 

Section 2.7, Section 2.8, Section 2.9, Section 2.10,
Section 4.1, Section 4.13, Section 4.15, Section 4.16,
Section 4.17, Section 4.18, Section 4.19, Section 4.21,
Section 4.22, Section 7.7, Section 7.8 and
in this Article VIII shall
survive until the Securities have been paid in full. Thereafter, the
obligations of the Company in Section 7.7, Section 8.4
and Section 8.5 shall survive.

 

Section 8.2                                      Conditions to Defeasance

 

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

 

(1)                                  the Company irrevocably deposits in trust
with the Trustee for the benefit of the Holders money in U.S. dollars or U.S.
Government Obligations or a combination thereof for the payment of principal,
premium, if any, and interest on the Securities to their Stated Maturity or
redemption, as the case may be;

 

(2)                                  the Company delivers to the Trustee a
certificate from a nationally recognized firm of independent accountants
expressing their opinion that the payments of principal, premium, if any, and
interest when due and without reinvestment on the deposited U.S. Government
Obligations plus any deposited money without investment will provide cash at
such times and in such amounts as will be sufficient to pay principal, premium,
if any, and interest when due on all the Securities to maturity;

 

(3)                                  no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or, with respect to
Events of Default specified in Section 6.1(7), on the 91st day
after such date of deposit;

 

(4)                                  such legal defeasance or covenant defeasance
shall not result in a breach or violation of, or constitute a default under,
this Indenture or any other material agreement or instrument to which the
Company or any Subsidiary Guarantor is a party or by which the Company or any
Subsidiary Guarantor is bound;

 

(5)                                  in the case of the legal defeasance
option, the Company shall have delivered to the Trustee an Opinion of Counsel
(subject to customary exceptions, qualifications and exclusions) in the United
States stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the
Issue Date there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and 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 deposit and legal defeasance
had not occurred;

 

(6)                                  in the case of the covenant defeasance
option, the Company shall have delivered to the Trustee an Opinion of Counsel
(subject to customary exceptions, qualifications and exclusions) in the United
States to the effect that the Holders will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and covenant
defeasance and

 

85

 

will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such deposit and covenant defeasance had not occurred; and

 

(7)                                  the Company shall have delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
all conditions precedent to legal defeasance or covenant defeasance, as the
case may be, have been complied with.

 

Section 8.3                                      Application of Trust Money

 

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

 

Section 8.4                                      Repayment to Company

 

Subject
to any applicable abandoned property law, the Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal of, premium, if any, or interest on the Securities that remains
unclaimed for two years (or any such money then held by the Company or any
Subsidiary shall be discharged from any trust hereunder), and thereupon they
shall be released from all liability with respect to such money and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once,
in The New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which will not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company. Nothing contained in this Section 8.4
shall be deemed to affect any obligation of the Trustee or any Paying Agent to
search for lost Holders pursuant to Rule 17Ad-17 under the Exchange Act.

 

Section 8.5                                      Indemnity for U.S. Government Obligations

 

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

 

Section 8.6                                      Reinstatement

 

If
the Trustee or Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with this Article VIII
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the obligations of the Company and any Subsidiary Guarantors
under this Indenture, the Securities and the Subsidiary Guarantees shall be
revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII;
provided, however,
that, if the Company or any

 

86

 

Subsidiary Guarantor has made any payment with respect to
any Securities because of the reinstatement of its obligations, then it shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.

 

ARTICLE IX

AMENDMENTS

 

Section 9.1                                      Without Consent of Holders

 

The
Company and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Holder:

 

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

 

(2)                                  to provide for the assumption by a
successor corporation, partnership, trust or limited liability company of the
obligations of the Company under this Indenture and the Securities;

 

(3)                                  to provide for uncertificated Securities
in addition to or in place of certificated Securities (provided,
however, that the uncertificated Securities are issued in registered
form for purposes of Section 163(f) of the Code or in a manner
such that the uncertificated Securities are described in Section 163(f)(2)(B) of
the Code);

 

(4)                                  to add or release Subsidiary Guarantors
in compliance with the applicable provisions of the Indenture;

 

(5)                                  to secure the Securities or any
Subsidiary Guarantee;

 

(6)                                  to add to the covenants of the Company
for the benefit of the Holders or to surrender any right or power herein
conferred upon the Company;

 

(7)                                  to make any change that does not adversely
affect the legal rights of any Holder;  provided, however, that any change to conform this
Indenture to any offering circular or prospectus relating to the offering of
any Securities shall not be deemed to adversely affect the legal rights of any
Holder;

 

(8)                                  to comply with any requirement of the SEC
in connection with qualifying this Indenture under the Trust Indenture Act;

 

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

 

87

 

(10)                            to provide for the issuance of Additional
Securities in accordance with this Indenture; or

 

(11)                            make any change in the subordination
provisions of this Indenture that would limit or terminate the benefits
available to any holder of Senior Indebtedness of the Company (or any
Representative thereof) under such subordination provisions.

 

No
amendment may be made to the subordination provisions of this Indenture
that adversely affects the rights of any holder of Senior Indebtedness of the
Company then outstanding unless the holders of such Senior Indebtedness (or any
Representative thereof authorized to give a consent) consent to such a change.

 

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

 

Section 9.2                                      With Consent of Holders

 

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

 

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

 

(2)                                  reduce the stated rate of or extend the
stated time for payment of interest on any Security;

 

(3)                                  reduce the principal of or extend the
Stated Maturity of any Security;

 

(4)                                  reduce the premium payable upon the
redemption or repurchase of any Security or change the time at which any
Security may be redeemed or repurchased in accordance with this Indenture
or change any similar provision (other than in respect of any of the provisions
of Section 4.8), whether through an amendment or waiver of
provisions in the covenants, definitions or otherwise;

 

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

 

(6)                                  impair the right of any Holder to receive
payment of premium, if any, principal of and interest on such Holder’s
Securities on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder’s Securities;

 

88

 

(7)                                  modify any Subsidiary Guarantee in any
manner adverse to the Holders of the Securities or release any Subsidiary
Guarantee except in accordance with the terms of this Indenture;

 

(8)                                  make any change in Section 6.4 or 6.7 or the second sentence of this Section 9.2;
or

 

(9)                                  make any change to the subordination
provisions of this Indenture that adversely affects the rights of any Holder of
Securities.

 

It
shall not be necessary for the consent of the Holders under this Section 9.2  to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent approves the
substance thereof.

 

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

 

Section 9.3                                      Compliance with Trust Indenture Act

 

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

 

Section 9.4                                      Revocation and Effect of Consents and
Waivers

 

A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder’s Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such
Holder’s Security or portion of the Security if the Trustee receives the
written notice of revocation before the date the amendment or waiver becomes
effective. After an amendment or waiver becomes effective, it shall bind every
Holder.

 

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

 

Section 9.5                                      Notation on or Exchange of Securities

 

If
an amendment changes the terms of a Security, the Trustee may require the
Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Company

 

89

 

or the Trustee so determines, the Company in exchange for
the Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms, but the failure to make the appropriate notation or
to issue a new Security shall not affect the validity of such amendment.

 

Section 9.6                                      Trustee To Sign Amendments

 

The
Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee. If
it does, the Trustee may but need not sign it. In signing such amendment
the Trustee shall be entitled to receive, and (subject to Section 7.1)
shall be fully protected in relying upon, an Officers’ Certificate and an
Opinion of Counsel stating (i) that such amendment is authorized or
permitted by this Indenture, (ii) that all conditions precedent to the
effectiveness of such amendment have been met and (iii) that no Default or
Event of Default will occur as a result of the execution of such amendment.

 

ARTICLE X

SUBORDINATION OF SECURITIES

 

Section 10.1                                Securities Subordinate to Senior
Indebtedness

 

The
Company covenants and agrees, and each Holder of a Security, by accepting a
Security, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article X, the payment of the
principal of (and premium, if any) and interest on each and all of the
Securities is hereby expressly made subordinate in right of payment to the
prior payment in full of all existing and future Senior Indebtedness of the
Company.

 

Section 10.2                                Liquidation, Dissolution and Bankruptcy
of Company

 

Upon
any distribution to creditors of the Company in a liquidation or dissolution of
the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property, an assignment for
the benefit of creditors or any marshalling of the Company’s assets and
liabilities:

 

(1)                                  holders of Senior Indebtedness of the
Company shall be entitled to receive payment in full in cash (or U.S.
dollar-denominated Cash Equivalents) in respect of such Senior Indebtedness
(including interest accruing after, or which would accrue but for, the
commencement of any such proceeding at the rate specified in the applicable
Senior Indebtedness, whether or not a claim for such interest would be allowed)
before the Holders of the Securities shall be entitled to receive any payment
of any kind or character with respect to the Securities; and

 

(2)                                  until the Senior Indebtedness of the
Company is paid in full in cash (or U.S. dollar-denominated Cash Equivalents),
any payment or distribution to which the Holders of Securities would be
entitled but for this Article X (except in Permitted Junior
Securities or from

 

90

 

the trusts provided for in Section 8.1 and
Section 8.2) shall be made to the holders of the Senior
Indebtedness of the Company as their interests may appear.

 

Section 10.3                                Suspension of Payment When Designated
Senior Indebtedness in Default

 

(a)                                  The Company may not pay principal
of, premium if any, or interest on, or other payment obligations in respect of,
the Securities (except in Permitted Junior Securities or from the trusts
provided for in Section 8.1 and Section 8.2) or make
any deposit pursuant to the provisions described under Article VIII and may not
otherwise purchase, redeem or retire any Securities (collectively, “pay the Securities”) if: (1) any of
its Designated Senior Indebtedness is not paid when due beyond applicable grace
periods (a “Payment Default”) or (2) any
other default on its Designated Senior Indebtedness occurs and the maturity of
such Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, the default has been cured or waived and any such acceleration has
been rescinded or such Senior Indebtedness has been paid in full in cash (or
U.S. dollar-denominated Cash Equivalents).

 

However,
the Company may pay the Securities if the Company and the Trustee receive
written notice approving such payment from the Representative of the Senior
Indebtedness with respect to which either of the events set forth in clause (1) or
(2) of the immediately preceding sentence has occurred and is continuing.

 

(b)                                 The Company shall not pay the Securities
for a Payment Blockage Period (as defined below) during the continuance of any
default (a “Non-Payment Default”),
other than a Payment Default described in Section 10.3(a), on any
of its Designated Senior Indebtedness that permits the holders of such
Designated Senior Indebtedness to accelerate its maturity immediately without
either further notice (except such notice as may be required to effect
such acceleration) or the expiration of any application grace periods. A “Payment Blockage Period” commences on the
receipt by the Trustee (with a copy to the Company) of written notice (a “Blockage Notice”) of a default of the kind
described in the immediately preceding sentence from the Representative of the
holders of such Designated Senior Indebtedness specifying an election to effect
a Payment Blockage Period and ends on the earliest of (a) 179 days
thereafter, (b) the date on which such Non-Payment Default is cured,
waived in writing or otherwise ceases to exist, (c) the date on which such
Designated Senior Indebtedness is repaid in full in cash or Cash Equivalents or
(d) the date on which such Payment Blockage Period will have been
terminated by written notice to the Trustee and the Company from the Person or
Persons who gave such Blockage Notice.

 

The
Company may resume payments on the Securities after the end of the Payment
Blockage Period (including any missed payments), unless the holders of such
Designated Senior Indebtedness or the Representative of such holders has
accelerated the maturity of such Designated Senior Indebtedness. Not more than
one Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period. In no event, however, may the total
number of days during which any Payment Blockage Period or Periods is in effect
exceed 179 days in the aggregate during any 360 consecutive day period. For
purposes of this paragraph, no default or event of default that existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness initiating such Payment

 

91

 

Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured
or waived for a period of not less than 90 consecutive days.

 

(c)                                  If payment of the Securities is
accelerated because of an Event of Default, the Company or the Trustee will
promptly notify the holders of the Designated Senior Indebtedness of the
Company or the Representative of such holders of the acceleration.

 

(d)                                 In the event that, notwithstanding the
foregoing, the Company makes any payment or distribution to the Trustee or the
Holder of any Security prohibited by the foregoing provisions of this Section 10.3,
then and in such event (and subject to the next sentence with respect to the
Trustee) such payment or distribution will be paid over and delivered forthwith
to the Company. In the event that the Company makes any payment in respect of
the Securities to the Trustee and the Trustee receives written notice of a
Payment Default or a Non-Payment Default from one or more of the holders of
Designated Senior Indebtedness of the Company (or their Representative) prior
to making any payment to Holders in respect of the Securities and prior to
11:00 a.m., New York City time, on the date which is two Business Days
prior to the date upon which by the terms hereof any money may become
payable for any purpose, such payments will be paid over by the Trustee and
delivered forthwith to the Company.

 

Section 10.4                                Subrogation to Rights of Holders of
Senior Indebtedness

 

After
all Senior Indebtedness of the Company is irrevocably paid in full in cash (or
U.S. dollar-denominated Cash Equivalents) and until the Securities are paid in
full, Holders of Securities shall be subrogated (equally and ratably with all
other Indebtedness pari
passu with the Securities) to the rights of holders of Senior
Indebtedness of the Company to receive distributions applicable to such Senior
Indebtedness. A distribution made under this Article X to holders
of Senior Indebtedness of the Company that otherwise would have been made to
Holders of the Securities is not, as between the Company and the Holders of
Securities, a payment by the Company on the Senior Indebtedness of the Company.

 

Section 10.5                                Provisions Solely to Define Relative
Rights

 

This
Article X defines the relative rights of Holders of Securities and
holders of Senior Indebtedness. Nothing in this Indenture shall:

 

(1)                                  impair, as between the Company and
Holders of Securities, the obligation of the Company, which is absolute and
unconditional, to pay principal of, premium, if any, and interest on the
Securities in accordance with their respective terms;

 

(2)                                  affect the relative rights of Holders of
Securities and other creditors of the Company other than their rights in
relation to holders of Senior Indebtedness; or

 

(3)                                  prevent the Trustee or any Holder of
Securities from exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders of Senior Indebtedness to receive
distributions and payments otherwise payable to Holders of Securities.

 

92

 

If
the Company fails because of this Article X to pay principal of,
premium, if any, or interest on a Securities on the due date, the failure is
still a Default or Event of Default.

 

Section 10.6                                Trustee to Effectuate Subordination

 

Each
Holder of a Security by his acceptance thereof authorizes and directs the
Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article X
and appoints the Trustee its attorney-in-fact for any and all such purposes.

 

Section 10.7                                No Waiver of Subordination Provisions

 

(a)                                  No right of any present or future holder
of any Senior Indebtedness of the Company to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act,
in good faith, by any such holder, or by any noncompliance by the Company with
the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.

 

(b)                                 Without in any way limiting the
generality of the foregoing paragraph, the holders of Senior Indebtedness of
the Company may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article X or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness of the Company, do any one or more of the following:  (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior
Indebtedness of the Company, or otherwise amend or supplement in any manner
Senior Indebtedness of the Company or any instrument evidencing the same or any
agreement under which Senior Indebtedness of the Company is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness of the Company; (iii) release any
Person liable in any manner for the collection of Senior Indebtedness of the
Company; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.

 

Section 10.8                                Notice to Trustee

 

(a)                                  The Company shall give prompt written
notice to the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Securities. Notwithstanding
the provisions of this Article X or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee
in respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness of
the Company (or from any Representative therefor) with respect to a Payment
Default, or one or more of the holders of Designated Senior Indebtedness (or
from any Representative therefor), with respect to a Non-Payment Default; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.1, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee

 

93

 

shall not have received the notice provided for in
this Section at least three Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of, premium, if any, or
interest on any Securities), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date.

 

(b)                                 Subject to Section 7.1, the
Trustee shall be entitled to rely on the delivery to it of a written notice by
a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a Representative thereof) to establish that such notice has been
given by a holder of Senior Indebtedness of the Company (or a Representative
thereof). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Company to participate in any payment or
distribution pursuant to this Article X, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness of the Company held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article.

 

Section 10.9                                Reliance on Judicial Order or Certificate
of Liquidating Agent

 

Upon
any payment or distribution of assets of the Company referred to in this
Article, the Trustee, subject to Section 7.1, and the Holders of
the Securities shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article X.

 

Section 10.10                          Trustee Not Fiduciary for Holders of
Senior Indebtedness

 

The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Company and shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Indebtedness of the Company shall be
entitled by virtue of this Article X or otherwise.

 

Section 10.11                          Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee’s Rights

 

The
Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article X with respect to any Senior Indebtedness of
the Company which may at any time be held by it, to the same extent as any
other holder of Senior Indebtedness of the Company, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.

 

94

 

 

Nothing
in this Article X shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7.

 

ARTICLE XI

SUBSIDIARY GUARANTEE

 

Section 11.1                                Subsidiary
Guarantee

 

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

 

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

 

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

 

The
obligations of the Subsidiary Guarantors hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (except to the
extent provided in Section 11.2 and Section 11.4),
including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense, setoff, counterclaim, recoupment or

 

95

 

termination whatsoever or by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise.

 

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

 

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

 

The
Subsidiary Guarantors, jointly and severally, agree that, as between the
Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article VI for the purposes of each
Subsidiary Guarantee notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such Obligations as
provided in Article VI, such Obligations (whether or not due and
payable) shall forthwith become due and payable by the Subsidiary Guarantors
for the purposes of this Section 11.1.

 

The
Subsidiary Guarantors, jointly and severally, also agree to pay any and all
costs and expenses (including reasonable attorneys’ fees) incurred by the
Trustee or any Holder in enforcing any rights under this Section 11.1.

 

Section 11.2                                Limitation
on Liability

 

Each
Subsidiary Guarantor, and by its acceptance of Securities, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal
or state law to the extent applicable to any Subsidiary Guarantee. To
effectuate the foregoing intention, the Trustee, the Holders and the Subsidiary
Guarantors hereby irrevocably agree that the obligations of such Subsidiary
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Subsidiary Guarantor that are relevant under such laws, and after giving effect
to any collections from, rights to receive contribution from or payments made
by or on behalf of any other Subsidiary Guarantor in respect of the obligations
of such other Subsidiary Guarantor under this Article XI, result in
the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance.

 

96

 

Section 11.3                                Execution
and Delivery of Notation of Subsidiary Guarantee

 

To
evidence its Subsidiary Guarantee set forth in Section 11.1, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit E hereto will be
endorsed by manual or facsimile signature of an Officer of such Subsidiary
Guarantor on each Security authenticated and delivered by the Trustee.

 

Each
Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 11.1
will remain in full force and effect notwithstanding any failure to endorse on
each Security a notation of such Subsidiary Guarantee. If an Officer whose
signature is on the Subsidiary Guarantee no longer holds that office at the
time the Trustee authenticates the Security on which a Subsidiary Guarantee is
endorsed, the Subsidiary Guarantee will be valid nevertheless.

 

The
delivery of any Security by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Subsidiary Guarantee set forth
in Section 11.1 on behalf of each Subsidiary Guarantor.

 

Section 11.4                                Successors
and Assigns; Releases

 

(a)                                  This
Article XI shall be binding upon the Subsidiary Guarantors and
their successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.

 

(b)                                 So
long as no Event of Default has occurred and is continuing, the Subsidiary
Guarantee of a Subsidiary Guarantor will be released:

 

(1)                                  (A) in
connection with any sale or other disposition (other than by lease) of all or
substantially all of the properties and assets of that Subsidiary Guarantor
(including by way of merger or consolidation, whether or not such Subsidiary
Guarantor is the surviving Person) or (B) in connection with any sale or
other disposition of all of the Capital Stock of a Subsidiary Guarantor, in
each case to a Person that is not (either before or after giving effect to such
transaction) a Restricted Subsidiary or the Company and in each case provided
that (I) the Company otherwise complies with the terms of this Indenture
(including, without limitation, Section 4.8) with respect to such
transaction and (II) upon completion of such transaction all obligations of
such Subsidiary Guarantor with respect to Guarantees of other Indebtedness of
the Company or any other Subsidiary Guarantor terminate;

 

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

 

(3)                                  upon
the release or discharge of all Guarantees by such Subsidiary Guarantor of
Indebtedness of the Company (other than the Securities) or any other Subsidiary

 

97

 

Guarantor, except a release or discharge by or as a
result of the payment of such Indebtedness by such Subsidiary Guarantor
pursuant to its Guarantee; or

 

(4)                                  if
the Company satisfies and discharges this Indenture or exercises either its
legal defeasance option or its covenant defeasance option pursuant to Section 8.1.

 

Upon delivery by the Company to the Trustee of an Officers’
Certificate to the effect of any of clause (1), (2), (3) or (4) of
this Section 11.4(b), the Trustee shall execute any documents
reasonably required in order to evidence the release of any Subsidiary Guarantor
from its obligations under its Subsidiary Guarantee.

 

Section 11.5                                No
Waiver

 

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

 

Section 11.6                                Right
of Contribution

 

Each
Subsidiary Guarantor hereby agrees that to the extent that a Subsidiary
Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Subsidiary Guarantor shall be entitled to seek and receive
contribution from and against any other Subsidiary Guarantor hereunder who has
not paid its proportionate share of such payment. Each Subsidiary Guarantor’s
right of contribution shall be subject to the terms and conditions of this Article XI. The provisions of this Section 11.6
shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the Trustee and the Holders and each Subsidiary Guarantor shall
remain liable to the Trustee and the Holders for the full amount guaranteed by
such Subsidiary Guarantor hereunder.

 

Section 11.7                                No
Subrogation

 

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

 

98

 

over to the Trustee in the exact form received by such
Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to the
Trustee, if required), to be applied against the Obligations.

 

Section 11.8                                Modification

 

No
modification, amendment or waiver of any provision of this Article XI,
nor the consent to any departure by the Subsidiary Guarantors therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand
on the Subsidiary Guarantors in any case shall entitle the Subsidiary Guarantors
to any other or further notice or demand in the same, similar or other
circumstances.

 

Section 11.9                                Subordination

 

Any
Subsidiary Guarantee shall be subordinated to Senior Indebtedness of the
Subsidiary Guarantor to the same extent the Securities are subordinated to
Senior Indebtedness of the Company pursuant to Article X as if the
Subsidiary Guarantor were named in such Article in lieu of the Company.

 

ARTICLE XII

MISCELLANEOUS

 

Section 12.1                                Trust
Indenture Act Controls

 

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

 

Section 12.2                                Notices

 

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

 

if
to the Company or any Subsidiary Guarantor:

 

Pogo Producing Company

5 Greenway Plaza, Suite 2700

Houston, Texas 
77046-2504

Attention: 
Chief Financial Officer

Fax:  (713)
297-4954; or

 

99

 

if
to the Trustee:

 

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

600 Pearl Street, Suite 420

Dallas, Texas 
75201

Attention: 
Corporate Trust Department

Fax:  (214)
880-8241.

 

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

 

Any notice or
communication to a Holder shall be delivered to the Holder at the Holder’s
address as it appears on the registration books of the Registrar by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar.

 

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

 

Failure
to deliver a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is delivered in the manner provided above, it is duly given,
whether or not the addressee receives it.

 

Section 12.3                                Communication
by Holders with other Holders

 

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

 

Section 12.4                                Certificate
and Opinion as to Conditions Precedent

 

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

 

Section 12.5                                Statements
Required in Certificate or Opinion

 

Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include: (i) a statement that the
individual making such

 

100

 

certificate or opinion has read such covenant or condition; (ii) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (iii) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (iv) a statement as to whether or not, in the
opinion of such individual, such covenant or condition has been complied with.

 

Section 12.6                                When
Securities Disregarded

 

In
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee actually knows are so owned shall
be so disregarded. Also, subject to the foregoing, only Securities outstanding
at the time shall be considered in any such determination. Securities so owned
that have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee’s right to
so act with respect to such Securities and that the pledgee is not the Company
or any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company.

 

Section 12.7                                Legal
Holidays

 

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

 

Section 12.8                                Governing
Law

 

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

 

Section 12.9                                No
Personal Liability of Directors, Officers, Employees and Shareholders

 

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

 

101

 

Section 12.10                          Successors

 

All
agreements of the Company and any Subsidiary Guarantors in this Indenture and
the Securities and any Subsidiary Guarantees shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.

 

Section 12.11                          Multiple
Originals; Counterparts

 

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

 

Section 12.12                          Severability

 

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

 

Section 12.13                          Consent
to Jurisdiction

 

Each
of the Company and any Subsidiary Guarantor irrevocably submits to the
non-exclusive jurisdiction of any competent New York state or U.S. federal
court located in the City and State of New York over any suit, action or
proceeding arising out of or relating to this Indenture or any Subsidiary
Guarantee or Security. Each of the Company and any Subsidiary Guarantor irrevocably
waives, to the fullest extent permitted by law, any objection which it may have
to the laying of the venue of any such suit, action or proceeding brought in
such a court and any claim that any such suit, action or proceeding brought in
such a court has been brought in any inconvenient forum.

 

Section 12.14                          Table of
Contents; Headings

 

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

 

Section 12.15                          No
Adverse Interpretation of Other Agreements

 

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

 

[Signatures on following
page]

 

102

 

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

 

	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ James P. Ulm, II

  	
   

  
	
   

  	
   

  	
  James P. Ulm, II

  	
   

  
	
   

  	
   

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  	
  and Chief Financial
  Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK

  	
   

  
	
   

  	
   

  	
  TRUST COMPANY, N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tamara K. Ellis

  	
   

  
	
   

  	
   

  	
  Tamara K. Ellis

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  

 

 

Signature Page to Pogo Producing Company
Indenture, dated as of June 6, 2006

 

 

EXHIBIT A

[FACE OF SECURITY]

 

POGO PRODUCING COMPANY

 

7.875% SENIOR
SUBORDINATED NOTE DUE 2013

 

CUSIP NO.               

 

	
  No.       

  	
   

  	
  Principal Amount
  $                      

  

 

Pogo
Producing Company, a Delaware corporation, promises to pay to                                     ,
or registered assigns, the principal sum of                                  
dollars [or such other amount as may be indicated on the Schedule of
Exchanges of Interests in the Global Security attached hereto]* on May 1,
2013.

 

Interest Payment
Dates:  May 1 and November 1
commencing November 1, 2006.

 

Record Dates:  April 15 and October 15.

 

Dated:

 

	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

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

as Trustee, certifies that this is one of the

Securities referred to in the Indenture.

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

 

* Delete for Definitive Security

 

A-1

 

[BACK OF SECURITY]

 

POGO PRODUCING COMPANY

 

7.875% SENIOR
SUBORDINATED NOTE DUE 2013

 

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

 

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

 

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

 

1.                                       Interest. Pogo
Producing Company, a Delaware corporation (the “Company”), promises to pay
interest on the principal amount of this Security at 7.875% per annum from June 6,
2006 until maturity [and shall pay the Special Interest, if any, payable
pursuant to Section 2(c) of the Registration Rights Agreement.]*  The Company will pay interest [including
Special Interest, if any,]* semi-annually in arrears on May 1 and November 1
of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each, an “Interest Payment Date”). Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be November 1,
2006. The Company will pay interest (which includes post-petition interest that
may be paid in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, at the rate then in effect; it will pay interest
(which includes post-petition interest that may be paid in any proceeding
under any Bankruptcy Law) on overdue installments of interest [including
Special Interest, if any,]* (without regard to any applicable grace periods)
from time to time on demand at the same rate as on overdue principal 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 Securities (except Defaulted Interest) to
the Persons who are registered Holders of Securities at the close of business
on the April 15 or October 15 next preceding the Interest Payment
Date, even if such Securities are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.11
of the Indenture with respect to Defaulted Interest. The Securities will be
payable as to principal, premium, if any, and interest at the office or agency
maintained or designated by the Company for such purpose within the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest, and premium, if any, on all Global
Securities and all other Securities the Holders of which will

 

* Delete for Exchange
Security

 

A-2

 

have provided wire
transfer instructions to the Company or the Paying Agent prior to the relevant
record date. Such payment will be in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts. The principal of the Securities shall be payable only upon
surrender of any Security at the specified offices of any Paying Agent.

 

3.                                       Paying Agent and
Registrar. Initially, The Bank of New York Trust Company, N.A. (“Trustee”),
will act as Paying Agent and Registrar. The Company may appoint and change
any Paying Agent or Registrar without notice to any Holder. The Company or any
of its Subsidiaries may act as Paying Agent or Registrar.

 

4.                                       Indenture. The
Company issued the Securities under an Indenture, dated as of June 6, 2006
(the “Indenture”), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act. The Securities are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. To the extent any provision of this Security
conflicts with the express provisions of the Indenture, the provisions of the Indenture
shall govern and be controlling to the extent permitted by law. The Securities
are unsecured obligations of the Company. The Company initially issued $450,000,000
aggregate principal amount of Securities. The Company may issue Additional
Securities under the Indenture, subject to Section 4.3 of the
Indenture.

 

5.                                       Optional Redemption.

 

(a)          On and
after May 1, 2010, the Company may redeem all or, from time to time, part of
the Securities upon not less than 10 nor more than 60 days’ notice at the Redemption
Prices (expressed as percentages of the principal amount) set forth below plus
accrued and unpaid interest on the Securities, if any, to the applicable
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on an Interest Payment Date that is on or
prior to the Redemption Date), if redeemed during the 12-month period beginning
May 1 of the years indicated:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  103.938

  	
  %

  
	
  2011

  	
   

  	
  101.969

  	
  %

  
	
  2012

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 Prior
to May 1, 2009, the Company may on one or more occasions redeem up to
35% of the aggregate original principal amount of the Securities (including any
Additional Securities), with the Net Cash Proceeds of one or more Equity
Offerings at a Redemption Price of 107.875% of the principal amount of the
Securities, plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date); provided that (i) at
least 65% of the aggregate original principal amount of the Securities
(including any Additional Securities) remains outstanding after each such
redemption and (ii) such redemption occurs within 120 days after the
closing of the related Equity Offering.

 

A-3

 

(c)                                  The
Company may, at its option, prior to May 1, 2010, redeem the Securities,
as a whole at any time or in part from time to time, at a Redemption Price
equal to the sum of:

 

(1)                                  accrued and unpaid interest, if
any, to the Redemption Date (subject to the right of Holders of record on the
relevant record date to receive interest due on an Interest Payment Date that
is on or prior to the Redemption Date), plus

 

(2)                                  the Applicable Premium at the
Redemption Date.

 

6.                                       Subordination. The Securities are subordinated to Senior
Indebtedness of the Company. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid.
In addition, a Subsidiary Guarantee, if any, is subordinated to Senior
Indebtedness of the relevant Subsidiary Guarantor. The Company agrees, and each
Holder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose.

 

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

 

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

 

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

 

9.                                       Amendment, Supplement and
Waiver. Subject to certain exceptions, the Indenture and the
Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in outstanding principal amount of the
Securities, and any existing Default or Event of Default or compliance with any
provision of the Indenture or the Securities may be waived with the
written consent of the Holders of a majority in outstanding principal amount of
the Securities. Without the consent of any Holder of a Security, the Indenture
or the Securities may be amended or supplemented (i) to cure any
ambiguity, omission, defect or inconsistency,

 

A-4

 

(ii) to provide for
the assumption by successor entities of the Company’s obligations under the
Indenture and the Securities, (iii) to provide for uncertificated
Securities in addition to or in place of certificated Securities, (iv) to
add or release Guarantees with respect to the Securities, (v) to secure
the Securities or any Subsidiary Guarantee, (vi) to add to the covenants
of the Company for the benefit of the Holders or to surrender any right or
power conferred upon the Company, (vii) to make any change that does not
adversely affect the rights of any Holder, (viii) to comply with any
requirement of the SEC in connection with qualifying the Indenture under the
Trust Indenture Act, (ix) to provide for the issuance of the Exchange
Securities, (x) to provide for the issuance of Additional Securities or (xi) to
make any change in the subordination provisions of the Indenture that would
limit or terminate the benefits available to any holder of Senior Indebtedness
of the Company under such subordination provisions, in each case in accordance
with and as more fully provided in the Indenture.

 

10.                                 Defaults. If an
Event of Default shall occur and be continuing, the Securities may be
declared (or shall become without any declaration, as the case may be) due
and payable in the manner and with the effect provided in the Indenture.

 

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

 

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

 

13.                                 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).

 

14.                                 [Compliance
with Registration Rights Agreement. By accepting a Security, each
Holder acknowledges and agrees to the provisions of the Exchange and
Registration Rights Agreement, dated as of June 6, 2006, among the Company
and the other parties named on the signature pages thereof, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]*

 

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

 

16.                               Governing
Law. The law of the State of New York will govern and be used to construe
and enforce the Indenture and the Securities.

 

* Delete for Exchange
Security

 

A-5

 

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:

 

Pogo Producing Company

P.O. Box 2504

Houston, Texas  77252-2504

 

* Delete for Exchange Security

 

A-6

 

ASSIGNMENT FORM

 

To
assign this Security, fill in the form below:

 

	
  (I) or (we) assign and transfer this Security to:

  	
   

  	
   

  
	
   

  	
  (Insert assignee’s legal name)

  	
   

  
				

 

 

	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D.
  no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  

 

and irrevocably appoint                                                                                                                                                                              
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the face

  
	
   

  	
   

  	
  of this Security)

  
	
   

  
	
   

  
	
  Signature Guarantee:*

  	
   

  	
   

  
							

 

 

*                 Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

 

A-7

 

Option of Holder to
Elect Purchase

 

If
you want to elect to have this Security purchased by the Company pursuant to Section 4.8
or Section 4.14 of the Indenture, check the appropriate box below:

 

	
  o
  Section 4.8

  	
   

  	
  o
  Section 4.14

  

 

If
you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.8 or Section 4.14 of the
Indenture, state the amount you elect to have purchased:

 

$                              

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the face

  
	
   

  	
   

  	
  of this Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:*

  	
   

  	
   

  
									

 

*                 Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

 

A-8

 

[TO BE ATTACHED TO
GLOBAL SECURITIES]

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY

 

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

 

	
  Date of Exchange

  	
   

  	
  Amount of Decrease in

  Principal Amount of this

  Global Security

  	
   

  	
  Amount of Increase in

  Principal Amount of this

  Global Security

  	
   

  	
  Principal Amount of this

  Global Security

  Following such Decrease

  or Increase

  	
   

  	
  Signature of Authorized

  Officer of Trustee or

  Securities Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-9

 

EXHIBIT B

 

FORM OF CERTIFICATE OF
TRANSFER

 

Pogo Producing Company

P. O. Box 2504

Houston, Texas  77252-2504

 

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

600 Pearl Street, Suite 420

Dallas, Texas 
75201

 

Attention:  Corporate Trust
Department

 

Re: 
Pogo Producing Company 7.875% Senior Subordinated Notes due 2013

 

(CUSIP
[730448 AU1](1) [U72645 AD3](2)

 

Reference is hereby made
to the Indenture, dated as of June 6, 2006 (the “Indenture”),
between Pogo Producing Company (the “Company”) and
The Bank of New York Trust Company, N.A., as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.

 

                                      
(the “Transferor”) owns and proposes to
transfer the Security[ies] or interest in such Security[ies] specified in Annex A hereto, in the principal amount of $                      
in such Security[ies]
or interests (the “Transfer”),
to                                                        
(the “Transferee”). In connection with the
Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1. o  Check if Transferee will
take delivery of a beneficial interest in the 144A Global Security or a Restricted
Definitive Security pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Security is being transferred to a Person that the
Transferor reasonably believes is purchasing the beneficial interest or
Definitive Security for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and such
Person and each such account is a “qualified institutional buyer” within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A,
and such Transfer is in compliance with any applicable securities laws of any
state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Security will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Security
and/or the Restricted Definitive Security and in the Indenture.

 

(1)               For Securities sold
in reliance on Rule 144A.

(2)               For Securities sold
in reliance on Regulation S.

 

B-1

 

2. o  Check if Transferee will
take delivery of a beneficial interest in the Regulation S Global Security or a
Restricted Definitive Security pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a Person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling
efforts have been made in contravention of the requirements of Rule 903 or
Rule 904 of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is
being made prior to the expiration of the Restricted Period, the transfer is
not being made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Security will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Security and/or the Restricted Definitive Security and in the Indenture and the
Securities Act.

 

3. o  Check if Transferee is an
Institutional Accredited Investor that will take delivery of a beneficial
interest in the IAI Global Security or a Restricted Definitive Security.
The Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Securities and
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act and any applicable securities laws of any state of the United
States, and is supported by a certificate executed by the Transferee in the form of
Exhibit D to the Indenture and, if such transfer is in respect of a
principal amount of Securities of less than $250,000, an Opinion of Counsel
provided by the Transferor or Transferee.

 

4. o  Check if Transferee will
take delivery of a beneficial interest in an Unrestricted Global Security or of
an Unrestricted Definitive Security.

 

(a)  o  Check if Transfer is
pursuant to Rule 144. (i) The Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act and
in compliance with the transfer restrictions contained in the Indenture and any
applicable securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Security will no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Securities, on Restricted
Definitive Securities and in the Indenture.

 

(b)  o  Check if Transfer is
Pursuant to Regulation S. (i) The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance

 

B-2

 

with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Security will no longer be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Securities, on
Restricted Definitive Securities and in the Indenture.

 

(c)  o  Check if Transfer is
Pursuant to Other Exemption. (i) The Transfer is being effected
pursuant to and in compliance with an exemption from the registration requirements
of the Securities Act other than Rule 144, Rule 903 or Rule 904
and in compliance with the transfer restrictions contained in the Indenture and
any applicable securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Security will not
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Securities or Restricted Definitive
Securities and in the Indenture.

 

This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.

 

 

	
   

  	
   

  
	
   

  	
  [Insert
  Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					

 

B-3

 

EXHIBIT C

 

FORM OF CERTIFICATE OF
EXCHANGE

 

Pogo Producing Company

P. O. Box 2504
Houston, Texas  77252-2504

 

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

600 Pearl Street, Suite 420

Dallas, Texas 
75201

 

Attention:  Corporate Trust
Department

 

Re: 
Pogo Producing Company 7.875% Senior Subordinated Notes due 2013

 

(CUSIP [730448 AU1](1)  [U72645 AD3](2)

 

Reference is hereby made
to the Indenture, dated as of June 6, 2006 (the “Indenture”),
between Pogo Producing Company (the “Company”) and
The Bank of New York Trust Company, N.A., as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.

 

                                                    
(the “Owner”) owns and proposes to exchange
the Security[s]
or interest in such Security[s] specified herein, in the principal amount of $                        
in such Security[s]
or interests (the “Exchange”). In
connection with the Exchange, the Owner hereby certifies that:

 

1.                                       Exchange of Restricted Definitive Securities or
Beneficial Interests in a Restricted Global Security for Unrestricted
Definitive Securities or Beneficial Interests in an Unrestricted Global
Security

 

(a)  o                Check if Exchange is from beneficial interest in a Restricted Global
Security to beneficial interest in an Unrestricted Global Security. In
connection with the Exchange of the Owner’s beneficial interest in a Restricted
Global Security for a beneficial interest in an Unrestricted Global Security in
an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Securities and pursuant to and in accordance with the
Securities Act of 1933, as amended (the “Securities Act”),
(iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the beneficial interest in an Unrestricted
Global Security is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

 

(1)               For Securities sold
in reliance on Rule 144A.

(2)               For Securities sold
in reliance on Regulation S.

 

C-1

 

(b)  o               Check if Exchange is from Restricted Definitive Security to
Unrestricted Definitive Security. In connection with the Owner’s
Exchange of a Restricted Definitive Security for an Unrestricted Definitive
Security, the Owner hereby certifies (i) the Unrestricted Definitive
Security is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Securities and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Security is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

 

This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.

 

	
   

  	
   

  
	
   

  	
  [Insert
  Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					

 

C-2

 

EXHIBIT D

 

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

                              ,
          

 

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

as Trustee and
Registrar

600 Pearl Street, Suite 420

Dallas, Texas 
75201

Attention:  Corporate Trust Department

 

Ladies
and Gentlemen:

 

We
are delivering this letter in connection with our purchase of 7.875% Senior
Subordinated Notes due 2013 (the “Notes”)
of Pogo Producing Company (the “Company”). We hereby confirm that:

 

(i)                                     we are an “accredited investor”
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended (the “Securities Act”), or an entity in
which all of the equity owners are accredited investors within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (an “Institutional
Accredited Investor”);

 

(ii)                                  any purchase of Notes by us will
be for our own account or, if we are buying for one or more institutional
accounts for which we are acting as fiduciary or agent and we are not a bank
(as defined in Section 3(a)(2) of the Securities Act) or a savings
and loan association or other institution (as defined in Section 3(a)(5)(A) of
the Securities Act), each such account is an Institutional Accredited Investor;

 

(iii)                               we have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of purchasing Notes and we, and any accounts for which we
are acting, are able to bear the economic risks of its or their investment;

 

(iv)                              we are not acquiring Notes with
a view to any distribution thereof in a transaction that would violate the
Securities Act or the securities laws of any State of the United States or any
other applicable jurisdiction; provided,
however, that the disposition of
our property and the property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and

 

(v)                                 we acknowledge that we have had
access to such financial and other information, and have been afforded the
opportunity to ask such questions of representatives of the Company and receive
answers thereto, as we deem necessary in connection with our decision to purchase
Notes.

 

We
understand that the Notes were offered in a transaction not involving any
public offering within the meaning of the Securities Act and that the Notes
have not been registered

 

D-1

 

under the Securities Act, and we agree, on our own behalf
and on behalf of each account for which we acquire any Notes, that such Notes may be
offered, resold, pledged or otherwise transferred only (i) in the United
States to a person whom we reasonably believe to be a qualified institutional
buyer (as defined in Rule 144A under the Securities Act) in a transaction
meeting the requirements of Rule 144A under the Securities Act, (ii) in
a transaction meeting the requirements of Rule 144 under the Securities
Act, (iii) outside the United States in a transaction meeting the
requirements of Rule 903 or 904 under the Securities Act, (iv) to the
Company, (v) to another Institutional accredited Investor, or (vi) pursuant
to an effective registration statement, and, in each case, in accordance with
any applicable securities laws of any State of the United States, and we will,
and each subsequent holder of the Notes is required to, notify any subsequent
purchaser from us or it of the resale restrictions set forth in clauses (i) –
(vi) above. We acknowledge that the Notes will bear legends substantially
to the foregoing effect. We understand that the registrar will not be required
to accept for registration of transfer any Notes, except upon presentation of
evidence satisfactory to the Company that the foregoing restrictions on
transfer have been complied with.

 

We
acknowledge that you and the Company will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases
to be accurate and complete.

 

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

 

 

	
   

  	
   

  
	
   

  	
  [Name
  of Purchaser]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  

 

D-2

 

EXHIBIT E

 

FORM OF NOTATION OF
SUBSIDIARY GUARANTEE

 

For
value received, the undersigned Subsidiary Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally, with each
other Subsidiary Guarantor, unconditionally guaranteed, to the extent set forth
in, and subject to the provisions of, the Indenture dated as of June 6,
2006 (the “Indenture”) between Pogo Producing
Company (the “Company”), and The Bank of New
York Trust Company, N.A., as trustee (the “Trustee”), (a) the
full and punctual payment of the principal of, premium, if any, and interest
[including Special Interest,]* on the Securities (as defined in the Indenture)
when due, whether at Stated Maturity, or upon optional redemption, required
repurchase pursuant to Section 4.8 or Section 4.14 of
the Indenture, acceleration or otherwise, and all other monetary obligations
owing by the Company under the Indenture (including obligations owing to the
Trustee) and the Securities, all as more fully provided in Article XI
of the Indenture. The obligations of the undersigned Subsidiary Guarantor to
the Holders of Securities and to the Trustee pursuant to the Subsidiary
Guarantee and the Indenture are expressly set forth in Article XI
of the Indenture and reference is hereby made to the Indenture for the precise
terms of the Subsidiary Guarantee. Each Holder of a Security, by accepting the
same, (a) agrees to and shall be bound by such provisions and (b) appoints
the Trustee attorney-in-fact of such Holder for such purpose; provided, however, that each Subsidiary Guarantee shall be
subject to release in accordance with the provisions of the Indenture.

 

	
   

  	
   

  
	
   

  	
  [NAME OF GUARANTOR(S)]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

*  Delete for Exchange Security

 

E-1

 

EXHIBIT F

 

FORM OF SUPPLEMENTAL
INDENTURE

TO BE DELIVERED BY FUTURE SUBSIDIARY GUARANTORS

 

THIS
SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”),
is dated as of                                 ,
20    , among [Name of Future Subsidiary Guarantor(s)] (the
“New  Subsidiary
Guarantor”), a subsidiary of Pogo Producing Company, a Delaware
corporation (the “Company”), the other Subsidiary
Guarantors (as defined in the Indenture referred to herein), the Company and
The Bank of New York Trust Company, N.A., as trustee under the Indenture
referred to herein (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS,
the Company has heretofore executed and delivered to the Trustee an indenture
(the “Indenture”), dated as of June 6,
2006, providing for the issuance of its 7.875% Senior Subordinated Notes due
2013 (the “Securities”);

 

WHEREAS,
Section 4.11 of the Indenture provides that in certain
circumstances the Company will require a Restricted Subsidiary to execute and
deliver a supplemental indenture to the Indenture providing for a Subsidiary
Guarantee of such Restricted Subsidiary, and such circumstances have arisen in
relation to the New Subsidiary Guarantor; and

 

WHEREAS,
pursuant to Article XI of the Indenture, the Company and the
Trustee are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture without the consent of any Holder.

 

NOW
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Subsidiary
Guarantors, the Company and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Securities as follows:

 

1.                                       CAPITALIZED TERMS. Capitalized
terms used herein without definition shall have the meanings assigned to them
in the Indenture.

 

2.                                       AGREEMENT TO GUARANTEE. The New
Subsidiary Guarantor hereby agrees, jointly and severally, with all other
Subsidiary Guarantors, to unconditionally Guarantee to each Holder and to the
Trustee the Obligations, to the extent set forth in the Indenture and subject
to the provisions in the Indenture. The obligations of the Subsidiary
Guarantors to the Holders of Securities and to the Trustee pursuant to the
Subsidiary Guarantees and the Indenture are expressly set forth in Article XI
of the Indenture and reference is hereby made to the Indenture for the precise
terms of the Subsidiary Guarantees.

 

3.                                       SUBORDINATION. Each Subsidiary
Guarantee shall be subordinated to Senior Indebtedness of the Subsidiary
Guarantor to the same extent the Securities are subordinated to Senior
Indebtedness of the Company pursuant to Article X of the Indenture
as if the Subsidiary Guarantor were named in such Article in lieu of the
Company. Each Subsidiary Guarantor

 

F-1

 

agrees to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect.

 

4.                                       EXECUTION AND DELIVERY. Each
Subsidiary Guarantor agrees that the Subsidiary Guarantees shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
notation of such Subsidiary Guarantee.

 

5.                                       NEW YORK LAW TO GOVERN. THE LAW
OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE AND ENFORCE THIS
SUPPLEMENTAL INDENTURE.

 

6.                                       COUNTERPARTS. The parties may sign
any number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.

 

7.                                       EFFECT OF HEADINGS. The Section headings
herein are for convenience only and shall not affect the construction hereof.

 

8.                                       THE TRUSTEE. The Trustee shall
not be responsible in any manner whatsoever for or in respect of the validity
or sufficiency of this Supplemental Indenture or for or in respect of the
recitals contained herein, all of which recitals are made solely by the
Subsidiary Guarantors and the Company. This Supplemental Indenture is executed
and accepted by the Trustee subject to all the terms set forth in the Indenture
with the same force and effect as if those terms were repeated at length herein
and made applicable to the Trustee with respect hereto.

 

F-2

 

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

 

	
  Dated: 

  	
   

  	
  , 20

  	
   

  	
   

  

 

 

	
   

  	
  [NEW SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [OTHER SUBSIDIARY GUARANTORS]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

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

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

F-3

 

SCHEDULE I

 

CASH
EQUIVALENT INVESTMENTS

 

The
Existing Credit Facility defines Cash Equivalent Investments to mean, at any
time:

 

(a)                                  securities maturing not more
than one year after such time, issued or guaranteed by the United States
Government or any Government Sponsored Enterprise;

 

(b)                                 commercial paper, maturing not
more than nine moths from the date of issue, which is issued (i) a
corporation (other than an Affiliate or a Subsidiary of the Company) organized
under the laws of any state of the United States or of the District of Columbia
and having an Investment Grade Rating or (ii) any lender (or its holding
company) party to the Existing Credit Facility (“Lender”);

 

(c)                                  any certificate of deposit,
banker’s acceptance or other bank obligations, maturing not more than one year
after such time, which is issued by either (i) a commercial banking
institution that is a member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than $100,000,000 or (ii) any
Lender;

 

(d)                                 any repurchase agreement entered
into with any Lender (or other commercial banking institution of the state
referred to in clause (c)(i) above that (i) is secured by a fully
perfected security interest in any obligation of the type described in any of
clauses (a) through (c) above, and (ii) has a market value at
the time such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such Lender (or other commercial banking institution)
thereunder;

 

(e)                                  any loan participation in a loan
which is to a borrower with a long-term unsecured debt rating of investment
grade or higher from any nationally recognized rating agency and is made by (i) a
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$100,000,000 or (ii) any Lender;

 

(f)                                    any evidence of indebtedness,
maturing not more than one year after such time, issued or guaranteed by any
agency or instrumentality of the United States Government, which has a rating
of “A-” or better from S&P or a rating of “A3” or better from Moody’s;

 

(g)                                 any interest bearing account at,
or certificate of deposit maturing not more than one year after such time
issued by, a U.S. savings and loan association which has a rating of “A-” or
better from S&P or a rating of “A3” or
better from Moody’s on its long-term unsecured debt and which has combined
capital and surplus and undivided profits of not less than $100,000,000;

 

(h)                                 any interest bearing account at,
or certificate of deposit maturing not more than one year after such time,
payable in U.S. dollars and issued by, (i) a foreign banking institution

 

I-1

 

or foreign branch of a U.S. banking institution, which
banking institution has a rating of “A-” or better from S&P or a rating of “A3”
or better from Moody’s on its long-term unsecured debt and combined capital and
surplus and undivided profits of not less than $100,000,000, or (ii) any
foreign subsidiary of a U.S. banking institution, which U.S. banking
institution has a rating of “A-” or better from S&P or a rating of “A3” or
better from Moody’s and which subsidiary has combined capital and surplus and
undivided profits of not less than $100,000,000 or (iii) any Lender;

 

(i)                                     any evidence of Indebtedness
(including variable rate demand notes), maturing not more than one year after
such time, issued by any State of the United States, by any county or
municipality organized or incorporated under the laws of any State of the United
States or by any agency or subdivision of any of the foregoing, in each case
rated “A-” or better by S&P or rated “A3” or better by Moody’s;

 

(j)                                     any auction rate or preferred
securities issued by domestic or foreign corporations, municipalities or closed-end
management investment companies that are designed as short term money market
instruments and are rated “A-” or better by S&P or “A3” or better by Moody’s,
provided that such Investment
will not result in any violation of Federal Reserve System Board Regulation U
and further provided that the
Company’s ownership interest will not exceed (and will not be convertible into
shares which exceed) 5% of the issuer’s outstanding shares entitled to vote
unless such ownership interest is acquired pursuant to a merger agreement
between the Company and such issuer;

 

(k)                                  any mutual funds or similar
investment vehicles investing primarily in Investments of the types set forth
in the foregoing clauses (a) through (j), provided
that ratings requirements shall be applicable to the mutual fund rather than
the underlying Investments, as follows: such mutual funds shall, in each case,
have a rating of “A-” or better from S&P or a rating of “A3” from Moody’s
or a rating satisfactory to the Administrative Agent under the Existing Credit
Facility from another recognized rating agency satisfactory to the
Administrative Agent, provided, however,
that (i) any Investment which when made complies with the requirements of
any of the foregoing clauses (f), (g) or (h) may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; and (ii) no Investment otherwise permitted by
clause (i) or (j) shall be permitted to be made directly or indirectly
through a mutual fund if, immediately or after giving effect thereto, any
Default shall have occurred and be continuing; and

 

(l)                                     any Investments outside the
United States by the Company or any of its Restricted Subsidiaries which are
the functional foreign equivalents in all material respects to the Investments
described in the foregoing clauses (a) through (g), (i) and (k); provided, however, that at no time may the
aggregate amount of any individual Investment permitted under this clause (l)
constitute more than 10% of the total principal amount of any applicable mutual
fund or other similar investment vehicle in which the Investment has been made.

 

I-2

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