Document:

EXHIBIT
      10.2

     

    
      

      

    

     

    FORSTER
      DRILLING CORPORATION

     

    [THE
      GUARANTORS NAMED HEREIN,

    as
      Subsidiary Guarantors]

     

    US$1,215,000

     

    Subordinated
      Notes Due January 15, 2013

     

    
      
        

      

       

    

    Indenture

     

    Dated
      as of January 3, 2008

     

    
      

    

     

    
      
 

    Bank
      Of the Ozarks

    as
      Trustee

     

    
      

    

     

    
      

      

    

    

      Subordinated
        Note Indenture

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Certain
      Sections of this Indenture relating to

    Sections
      310 through 318 of the

    Trust
      Indenture Act of 1939: 

     

    
      	
              Trust
                Indenture

            	 	 
	
              Act
                Section

            	 	
              Indenture
                Section

            
	 	 	 
	
              Section
                310(a)(1)

            	 	
                             7.10

            
	
                              
                (a)(2)

            	 	
                             7.10

            
	
                              
                (a)(3)

            	 	
                             Not
                Applicable

            
	
                              
                (a)(4)

            	 	
                             Not
                Applicable

            
	
                              
                (a)(5)

            	 	
                             7.10

            
	
                              
                (b)

            	 	
                             7.10

            
	
                              
                (c)

            	 	
                             Not
                Applicable

            
	
              Section
                311(a)

            	 	
                             7.11

            
	
                              
                (b)

            	 	
                             7.11

            
	
                              
                (c)

            	 	
                             Not
                Applicable

            
	
              Section
                312(a)

            	 	
                             2.05

            
	
                              
                (b)

            	 	
                             13.03

            
	
                              
                (c)

            	 	
                             13.03

            
	
              Section
                313(a)

            	 	
                             7.06

            
	
                              
                (b)(1)

            	 	
                             11.03

            
	
                              
                (b)(2)

            	 	
                             7.06,
                11.03

            
	
                              
                (c)

            	 	
                             7.06,
                13.02

            
	
                              
                (d)

            	 	
                             7.06

            
	
              Section
                314(a)(1)

            	 	
                             4.05

            
	
                              
                (a)(2)

            	 	
                             4.06

            
	
                              
                (a)(3)

            	 	
                             Not
                Applicable

            
	
                              
                (a)(4)

            	 	
                             13.05

            
	
                              
                (b)

            	 	
                             11.02

            
	
                              
                (c)(1)

            	 	
                             13.04(a)

            
	
                              
                (c)(2)

            	 	
                             13.04(b)

            
	
                              
                (c)(3)

            	 	
                             Not
                Applicable

            
	
                              
                (d)

            	 	
                             11.03

            
	
                              
                (e)

            	 	
                             13.05

            
	
              Section
                315(a)

            	 	
                             7.01,
                7.02(a)

            
	
                              
                (b)

            	 	
                             7.05

            
	
                              
                (c)

            	 	
                             7.01

            
	
                              
                (d)

            	 	
                             7.01

            
	
                              
                (e)

            	 	
                             6.11

            
	
              Section
                316(a)(1)

            	 	
                             6.05

            
	
                              
                (a)(2)

            	 	
                             6.04

            
	
                              
                (b)

            	 	
                             6.07

            
	
                              
                (c)

            	 	
                             2.13

            
	
              Section
                317(a)(1)

            	 	
                             6.08

            
	
                              
                (a)(2)

            	 	
                             6.09

            
	
                              
                (b)

            	 	
                             2.04

            
	
              Section
                318(a) 

            	 	
                             13.01

            

    

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF
      CONTENTS

    

    
      	 	 	
              Page

            
	 	 	 
	
              ARTICLE
                1

            
	 
	
              DEFINITIONS
                AND INCORPORATION BY REFERENCE

            
	 
	
              SECTION
                1.01

            	
              Definitions

            	
              1

            
	
              SECTION
                1.02

            	
              Other
                Definitions

            	
              16

            
	
              SECTION
                1.03

            	
              Incorporation
                by Reference of Trust Indenture Act

            	
              16

            
	
              SECTION
                1.04

            	
              Rules
                of Construction

            	
              17

            
	 	 	 
	
              ARTICLE
                2

            
	 
	
              THE
                SUBORDINATED NOTES

            
	 
	
              SECTION
                2.01

            	
              Terms;
                Form and Dating

            	
              17

            
	
              SECTION
                2.02

            	
              Execution
                and Authentication

            	
              20

            
	
              SECTION
                2.03

            	
              Registrar
                and Paying Agent

            	
              20

            
	
              SECTION
                2.04

            	
              Paying
                Agent to Hold Money in Trust

            	
              21

            
	
              SECTION
                2.05

            	
              Holder
                Lists

            	
              21

            
	
              SECTION
                2.06

            	
              Transfer
                and Exchange

            	
              22

            
	
              SECTION
                2.07

            	
              Replacement
                Subordinated Notes

            	
              27

            
	
              SECTION
                2.08

            	
              Outstanding
                Subordinated Notes

            	
              27

            
	
              SECTION
                2.09

            	
              Treasury
                Subordinated Notes

            	
              28

            
	
              SECTION
                2.10

            	
              Temporary
                Subordinated Notes

            	
              28

            
	
              SECTION
                2.11

            	
              Cancellation

            	
              28

            
	
              SECTION
                2.12

            	
              Defaulted
                Interest

            	
              28

            
	
              SECTION
                2.13

            	
              Record
                Date

            	
              29

            
	
              SECTION
                2.14

            	
              Ranking;
                Security; Intercreditor Agreement

            	
              29

            
	
              SECTION
                2.15

            	
              CUSIP
                Number

            	
              35

            
	 
	
              ARTICLE
                3

            
	 
	
              REDEMPTION
                AND CERTAIN REPURCHASES

            
	 
	
              SECTION
                3.01

            	
              Notices
                to Trustee

            	
              36

            
	
              SECTION
                3.02

            	
              Selection
                of Subordinated Notes for Redemption or Offers to Purchase

            	
              36

            
	
              SECTION
                3.03

            	
              Notice
                of Redemption

            	
              36

            
	
              SECTION
                3.04

            	
              Effect
                of Notice of Redemption

            	
              37

            
	
              SECTION
                3.05

            	
              Deposit
                of Redemption Price

            	
              37

            
	
              SECTION
                3.06

            	
              Subordinated
                Notes Redeemed in Part

            	
              38

            
	
              SECTION
                3.07

            	
              Optional
                Redemption

            	
              38

            
	
              SECTION
                3.08

            	
              Mandatory
                Redemption

            	
              38

            
	
              SECTION
                3.09

            	
              Offer
                to Purchase with Excess revenue

            	
              38

            
	
              SECTION
                3.10

            	
              Redemption
                at the Option of Holders Upon A Change of Control

            	
              41

            
	
              SECTION
                3.11

            	
              Compliance
                with the Exchange Act

            	
              43

            

    

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        (i)

        
          

        

      

      
        
        

      

    

    

    
      	
              ARTICLE
                4

            
	 
	
              COVENANTS

            
	 
	
              SECTION
                4.01

            	
              Payment
                of Subordinated Notes

            	
              43

            
	
              SECTION
                4.02

            	
              Use
                of Proceeds

            	
              44

            
	
              SECTION
                4.03

            	
              Further
                Assurances

            	
              44

            
	
              SECTION
                4.04

            	
              Maintenance
                of Office or Agency

            	
              44

            
	
              SECTION
                4.05

            	
              Reports

            	
              45

            
	
              SECTION
                4.06

            	
              Compliance
                Certificate

            	
              46

            
	
              SECTION
                4.07

            	
              Taxes

            	
              46

            
	
              SECTION
                4.08

            	
              Stay,
                Extension and Usury Laws

            	
              46

            
	
              SECTION
                4.09

            	
              Additional
                Collateral

            	
              46

            
	
              SECTION
                4.10

            	
              Restricted
                Payments

            	
              47

            
	
              SECTION
                4.11

            	
              Dividend
                and Other Payment Restrictions Affecting Restricted
                Subsidiaries

            	
              48

            
	
              SECTION
                4.12

            	
              Asset
                Sales

            	
              49

            
	
              SECTION
                4.13

            	
              Transactions
                with Affiliates

            	
              49

            
	
              SECTION
                4.14

            	
              Liens

            	
              50

            
	
              SECTION
                4.15

            	
              Corporate
                Existence

            	
              50

            
	
              SECTION
                4.16

            	
              Business
                Activities

            	
              51

            
	 
	
              ARTICLE
                5

            
	 
	
              SUCCESSORS

            
	 
	
              SECTION
                5.01

            	
              Merger,
                Consolidation or Sale of Assets

            	
              51

            
	
              SECTION
                5.02

            	
              Successor
                Corporation Substituted

            	
              51

            
	 
	
              ARTICLE
                6

            
	 
	
              DEFAULTS
                AND REMEDIES

            
	 
	
              SECTION
                6.01

            	
              Events
                of Default

            	
              54

            
	
              SECTION
                6.02

            	
              Acceleration

            	
              54

            
	
              SECTION
                6.03

            	
              Other
                Remedies

            	
               

            
	
              SECTION
                6.04

            	
              Waiver
                of Past Defaults

            	
               

            
	
              SECTION
                6.05

            	
              Control
                by Majority

            	
               

            
	
              SECTION
                6.06

            	
              Limitation
                on Suits

            	
               

            
	
              SECTION
                6.07

            	
              Rights
                of Holders of Subordinated Notes to Receive Payment

            	
               

            
	
              SECTION
                6.08

            	
              Collection
                Suit by Trustee

            	
               

            
	
              SECTION
                6.09

            	
              Trustee
                May File Proofs of Claim

            	
               

            
	
              SECTION
                6.10

            	
              Priorities

            	
               

            
	
              SECTION
                6.11

            	
              Undertaking
                of Costs

            	
               

            
	 
	
              ARTICLE
                7

            
	 
	
              TRUSTEE

            
	 
	
              SECTION
                7.01

            	
              Duties
                of Trustee

            	
              55

            
	
              SECTION
                7.02

            	
              Rights
                of Trustee

            	
              56

            
	
              SECTION
                7.03

            	
              Individual
                Rights of Trustee

            	
              57

            
	
              SECTION
                7.04

            	
              Trustee’s
                Disclaimer

            	
              57

            

    

    

      Subordinate
        Note Indenture

      
        
          
            
            

          

          
            (ii)

            
              

            

          

          
            
            

          

        

      

    

    

    
      	
              SECTION
                7.05

            	
              Notice
                of Defaults

            	
              57

            
	
              SECTION
                7.06

            	
              Reports
                by Trustee to Holders of the Subordinated Notes

            	
              57

            
	
              SECTION
                7.07

            	
              Compensation
                and Indemnity

            	
              58

            
	
              SECTION
                7.08

            	
              Replacement
                of Trustee

            	
              58

            
	
              SECTION
                7.09

            	
              Successor
                Trustee by Merger, Etc

            	
              59

            
	
              SECTION
                7.10

            	
              Eligibility;
                Disqualification

            	
              59

            
	
              SECTION
                7.11

            	
              Preferential
                Collection of Claims Against Company

            	
              60

            
	 
	
              ARTICLE
                8

            
	 
	
              LEGAL
                DEFEASANCE AND COVENANT DEFEASANCE

            
	 
	
              SECTION
                8.01

            	
              Option
                to Effect Legal Defeasance or Covenant Defeasance

            	
              60

            
	
              SECTION
                8.02

            	
              Legal
                Defeasance and Discharge

            	
              61

            
	
              SECTION
                8.03

            	
              Covenant
                Defeasance

            	
              62

            
	
              SECTION
                8.04

            	
              Conditions
                to Legal or Covenant Defeasance

            	
              62

            
	
              SECTION
                8.05

            	
              Deposited
                Money and Government Securities to be Held in Trust; Other Miscellaneous
                Provisions

            	
              62

            
	
              SECTION
                8.06

            	
              Repayment
                to Company

            	
              62

            
	
              SECTION
                8.07

            	
              Reinstatement

            	
              63

            
	 
	
              ARTICLE
                9

            
	 
	
              AMENDMENT,
                SUPPLEMENT AND WAIVER

            
	 
	
              SECTION
                9.01

            	
              Without
                Consent of Holders of Subordinated Notes

            	
              65

            
	
              SECTION
                9.02

            	
              With
                Consent of Holders of Subordinated Notes

            	
              65

            
	
              SECTION
                9.03

            	
              Compliance
                with Trust Indenture Act

            	
              66

            
	
              SECTION
                9.04

            	
              Revocation
                and Effect of Consents

            	
              66

            
	
              SECTION
                9.05

            	
              Notation
                on or Exchange of Subordinated Notes

            	
              68

            
	
              SECTION
                9.06

            	
              Trustee
                to Sign Amendments, Etc

            	
              68

            
	 
	
              ARTICLE
                10

            
	 
	
              GUARANTEES

            
	 
	
              SECTION
                10.01

            	
              Guarantees

            	
              69

            
	
              SECTION
                10.02

            	
              Limitation
                of Liability

            	
              70

            
	
              SECTION
                10.03

            	
              Successors
                and Assigns

            	
              71

            
	
              SECTION
                10.04

            	
              No
                Waiver

            	
              71

            
	
              SECTION
                10.05

            	
              Modification

            	
              72

            
	
              SECTION
                10.06

            	
              Release

            	
              72

            
	
              SECTION
                10.07

            	
              Contribution

            	
               

            
	 
	
              ARTICLE
                11

            
	 
	
              COLLATERAL
                AND SECURITY

            
	 
	
              SECTION
                11.01

            	
              Collateral
                Documents

            	
              72

            
	
              SECTION
                11.02

            	
              Recording
                of Opinions

            	
              74

            
	
              SECTION
                11.03

            	
              Release
                of Collateral

            	
              75

            
	
              SECTION
                11.04

            	
              Certificates
                of the Company

            	
              75

            
	
              SECTION
                11.05

            	
              Certificates
                of the Trustee

            	
              75

            

    

    

      Subordinate
        Note Indenture

       

      
        
          
            
            

          

          
            (iii)

            
              

            

          

          
            
            

          

        

      

    

    

    
      	
              SECTION
                11.06

            	
              Authorization
                of Actions to be Taken by the Trustee and the Collateral
                Agent under the Subordinated Note Collateral
                Documents

            	75
	
              SECTION
                11.07

            	
              Authorization
                of Receipt of Funds by the Collateral Agent under
                the Subordinated Note Collateral Documents

            	76
	
              SECTION
                11.08

            	
              Termination
                of Security Interest

            	
               

            
	
              SECTION
                11.09

            	
              Conflicts
                between Indenture and Subordinated Note Collateral
                Documents

            	
               

            
	 
	
              ARTICLE
                12

            
	 
	
              SATISFACTION
                AND DISCHARGE

            
	 
	
              SECTION
                12.01

            	
              Satisfaction
                and Discharge

            	
              76

            
	
              SECTION
                12.02

            	
              Deposited
                Cash and U.S. Government Securities to be Held in Trust; Other
                Miscellaneous Provisions

            	
              77

            
	
              SECTION
                12.03

            	
              Repayment
                to Company

            	
              78

            
	 
	
              ARTICLE
                13

            
	 
	
              MISCELLANEOUS

            
	 
	
              SECTION
                13.01

            	
              Trust
                Indenture Act Controls

            	
              81

            
	
              SECTION
                13.02

            	
              Notices

            	
              82

            
	
              SECTION
                13.03

            	
              Communication
                by Holders of Subordinated Notes with Other Holders of Subordinated
                Notes

            	
              82

            
	
              SECTION
                13.04

            	
              Certificate
                and Opinion as to Conditions Precedent

            	
               

            
	
              SECTION
                13.05

            	
              Statements
                Required in Certificate or Opinion

            	
               

            
	
              SECTION
                13.06

            	
              Rules
                by Trustee and Agents

            	
               

            
	
              SECTION
                13.07

            	
              No
                Personal Liability of Directors, Officers, Employees and
                Stockholders

            	
               

            
	
              SECTION
                13.08

            	
              Governing
                Law

            	
               

            
	
              SECTION
                13.09

            	
              No
                Adverse Interpretation of Other Agreements

            	
               

            
	
              SECTION
                13.10

            	
              Successors

            	
               

            
	
              SECTION
                13.11

            	
              Severability

            	
               

            
	
              SECTION
                13.12

            	
              Counterpart
                Originals

            	
               

            
	
              SECTION
                13.13

            	
              Table
                of Contents, Headings, Etc.

            	
               

            
	
              SECTION
                13.14

            	
              Agent
                for Service; Submission to Jurisdiction; Waiver Of
                Immunities

            	
               

            
	
              SECTION
                13.15

            	
              Arbitration

            	
               

            

    

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        (iv)

        
          

        

      

      
        
        

      

    

    

    
      	
              Exhibits:

            	 	 
	 	 	 
	 	
              Exhibit
                A:

            	
              Form
                of Subordinated Note

            
	 	
              Exhibit
                B:

            	
              Schedule
                of Exchanges of Interests in the Global Note

            
	 	
              Exhibit
                C:

            	
              Form
                of Intercreditor Agreement

            
	 	
              Exhibit
                D:

            	
              Form
                of Officer’s Compliance Certificate

            
	 	
              Exhibit
                E:

            	
              Oil
                Rig Related Assets

            
	 	
              Exhibit
                F:

            	
              Use
                of Proceeds Certificate

            
	 	
              Exhibit
                G:

            	
              Form
                of Investor Letter

            

    

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        (v)

        
          

        

      

      
        
        

      

    

    INDENTURE
      dated as of January 3, 2008 by and among FORSTER DRILLING CORPORATION, a
      corporation organized under the laws of the State of Nevada (the “Company”),
      its
      three (3) wholly-owned subsidiaries, Forster Drilling, Inc., a Texas corporation
      (“FDI”), Forster Tool & Supply, Inc., a Nevada corporation (“FTSI”), and
      Forster Exploration & Production, Inc., a Nevada corporation (“FEP”)
      (collectively, FDI, FTSI and FEP are referred to herein as the “Forster
      Subsidiaries”
or
      the
“Subsidiary
      Guarantors”)
      and
      Bank of the Ozarks(the “Trustee”).

     

    The
      Company and the Trustee agree as follows for the benefit of each other and
      for
      the equal and ratable benefit of the Holders of the US$1,215,000 aggregate
      principal amount of the Subordinated Notes due January 15, 2013 (the
“Subordinated
      Notes”)
      issued
      by the Company pursuant to this Indenture:

     

    ARTICLE
      1

     

    DEFINITIONS
      AND INCORPORATION

    BY
      REFERENCE

     

    
      	
              SECTION
                1.01

            	
              Definitions.

            

    

     

    “Additional
      Obligations”
mean
      the Obligations. 

     

    “Affiliate”
of
      any
      specified Person means any other Person directly or indirectly controlling
      or
      controlled by or under direct or indirect common control with such specified
      Person. For purposes of this definition, “control” (including, with correlative
      meanings, the terms “controlling,” “controlled by” and “under common control
      with”), as used with respect to any Person, shall mean the possession, directly
      or indirectly, of the power to direct or cause the direction of the management
      or policies of such Person, whether through the ownership of voting securities,
      by agreement or otherwise, provided,
      however,
      that
      beneficial ownership of 10% or more of the voting securities of a Person shall
      be deemed to be control.

     

    “Agent”
means
      any Registrar, Paying Agent, co-registrar or Collateral Agent.

     

    “Annual
      Debt Service”
means,
      with respect to all or any particular amount of the outstanding Subordinated
      Notes, the Debt Service for any particular 12 month period required to be paid
      or set aside during such 12 month period, less
      the
      amount of such payment which is provided from the proceeds of the sale of the
      Notes or from sources other than Pledged Revenues.

     

    “Annual
      Expansion Debt Service”
means,
      with respect to any Expansion Debt, the proposed Debt Service for any particular
      12 month period required to be paid or set aside during such 12 month period,
      less the amount of such payment which is provided from the proceeds of the
      sale
      of the Notes or Expansion Debt or from sources other than Revenues.

     

    “Applicable
      Procedures”
means
      the applicable procedures in effect from time to time of DTC, Euroclear or
      Clearstream. 

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Authorized
      Denominations”
means
      $5,000 and minimum increments of $5,000 in excess thereof.

     

    “Bankruptcy
      Law”
means
      title 11, U.S. Code or any similar law of the United States, any state or other
      jurisdiction thereof, or any other country, state or jurisdiction thereof for
      the relief of debtors.

     

    “Beneficial
      Owner”
means
      a
      beneficial owner as defined in Rules 13d-3 and 13d-5 under the Exchange Act
      (or
      any successor rules), including the provision of such Rules that a Person shall
      be deemed to have beneficial ownership of all securities that such Person has
      a
      right to acquire within 60 days; provided,
      that a
      Person will not be deemed a beneficial owner of, or to own beneficially, any
      securities if such beneficial ownership (i) arises solely as a result of a
      revocable proxy delivered in response to a proxy or consent solicitation made
      pursuant to, and in accordance with, the Exchange Act and (ii) is not also
      then
      reportable on Schedule 13D or Schedule 13G (or any successor schedule)
      under the Exchange Act.

     

    “Board
      of Directors”
means,
      unless otherwise specified, the Board of Directors of the Company or any
      authorized committee thereof.

     

    “Board
      Resolution”
means
      a
      resolution of the Board of Directors.

     

    “Business
      Day”
means
      any day other than a Legal Holiday.

     

    “Capital
      Stock”
means
      (i) in the case of a corporation, corporate stock, (ii) in the case of an
      association or business entity, any and all shares, interests, participations,
      rights or other equivalents (however designated) of corporate stock and (iii)
      in
      the case of a partnership, partnership interests (whether general or limited)
      and any other interest or participation that confers on a Person the right
      to
      receive a share of the profits and losses of, or distributions of assets of,
      such partnership.

     

    “Certificated
      Notes”
means
      certificated Subordinated Notes in fully registered form without interest
      coupons, in substantially the form of Exhibit
      A
      attached
      hereto.

     

    “Change
      of Control”
means
      the occurrence of any of the following:

     

    (i) a
      merger
      or consolidation in which the Company is not the surviving entity, except for
      a
      transaction the principal purpose of which is to change the state in which
      the
      Company is incorporated; 

     

    (ii) the
      sale,
      transfer or other disposition of all or substantially all of the assets of
      the
      Company;

     

    (iii) approval
      by the Company’s stockholders of any plan or proposal for the complete
      liquidation or dissolution of the Company;

     

    (iv) reserved.

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (v) any
      reverse merger in which the Company is the surviving entity but in which
      securities possessing more than fifty percent (50%) of the total combined voting
      power of the Company’s outstanding securities are transferred to a person or
      persons different from those who held such securities immediately prior to
      such
      merger; or

     

    (vi) the
      acquisition by any person or related group of persons (other than the Company,
      existing equityholders or a person that directly or indirectly controls, is
      controlled by, or is under common control with, the Company) of beneficial
      ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
      securities possessing more than fifty percent (50%) of the total combined voting
      power of the Company’s outstanding securities. 

     

    “Collateral” as
      used
      in this Indenture shall have the same meaning as set forth for such term in
      the
      Subordinated Note Security Agreement. 

     

    “Collateral
      Agent”
means
      the Trustee or any other Person from time to time acting as the Collateral
      Agent
      for the Subordinated Notes under the Subordinated Note Collateral
      Documents.

     

    “Commission”
means
      the United States Securities and Exchange Commission or any successor
      governmental agency.

     

    “Common
      Stock”
of
      any
      Person means Capital Stock of such Person that does not rank prior, as to the
      payment of dividends or as to the distribution of assets upon any voluntary
      or
      involuntary liquidation, dissolution or winding up of such Person, to shares
      of
      Capital Stock of any other class of such Person.

     

    “Corporate
      Trust Office of the Trustee”
shall
      be at the address of the Trustee specified in Section
      14.02
      hereof
      or such other address as to which the Trustee may give notice to the
      Company.

     

    “Custodian”
means,
      with respect to the Subordinated Notes issuable or issued in whole or in part
      in
      global form, the Person specified in Section
      2.03(c)
      as
      Custodian with respect to the Subordinated Notes, and any and all successors
      thereto appointed as custodian hereunder and having become such pursuant to
      the
      applicable provisions of this Indenture.

     

    “Debt
      Service”
means,
      with respect to all or any particular amount of the Subordinated Notes, the
      total as of any particular date of computation and for any particular period
      of
      the scheduled amount of interest and amortization of principal payable on such
      Subordinated Notes, excluding amounts scheduled during such period which relate
      to principal which has been retired before the beginning of such period. When
      calculating Debt Service, any obligation with a balloon maturity shall be
      treated as though the aggregate debt service thereon was equally amortizing
      over
      the term thereof and any obligation subject to a floating interest rate shall
      be
      calculated at the maximum interest rate permissible thereon.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

    “Depository”
means,
      with respect to the Subordinated Notes issued in the form of one or more Global
      Notes, DTC or another Person designated as depository by the Company, which
      must
      be a clearing agency registered under the Exchange Act.

     

    “DTC”
means
      The Depository Trust Company, its nominees and their respective successors
      and
      assigns, or such other depository institution hereinafter appointed by the
      Company pursuant to the terms of the Indenture.

     

    “Eligible
      Institution”
means
      a
      commercial banking institution that has combined capital and surplus of not
      less
      than US$500 million or its equivalent in foreign currency, whose debt is rated
      “A” (or higher) according to Standard & Poor’s or Moody’s at the time as of
      which any deposit or Investment therein is made.

     

    “Equity
      Interests”
means
      Capital Stock and all warrants, options or other rights to acquire Capital
      Stock
      or that are measured by the value of Capital Stock (but excluding any debt
      security that is convertible into or exchangeable for Capital
      Stock).

     

    “Euroclear”
means
      Euroclear Bank S.A./N.V., as operator of the Euroclear system and its
      successors. 

     

    “Excess
      Revenue”
means
      an amount computed as set forth in Section 5.02 of this Indenture.

     

    “Excess
      Revenue Account”
means
      an account of the Company maintained with the Trustee.

     

    “Exchange
      Act”
means
      the United States Securities Exchange Act of 1934, as amended (or any successor
      act), and the rules and regulations thereunder.

     

    “Expansion
      Assets”
means
      any additional oil and natural gas drilling rigs and equipment, drilling
      prospects, real property, mineral interests or other assets procured by the
      Company or its Affiliates on and after the date of this Indenture.

     

    “Expansion
      Debt”
means
      any Additional Obligations incurred by the Company or its Affiliates or
      Subsidiaries for the acquisition of Expansion Assets, or for working capital
      purposes. Expansion Debt shall only be incurred in accordance with the
      provisions of this Indenture. 

     

    “Fair
      Market Value”
means
      with respect to any asset or property, the sale value that would be obtained
      in
      an arm’s length transaction between an informed and willing seller under no
      compulsion to sell and an informed and willing buyer under no compulsion to
      buy.

     

    “Fiscal
      Year”
means
      the 12-month period used, at any time, by the Company for accounting purposes
      with respect to the Company, which may be the calendar year.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “GAAP”
means
      generally accepted accounting principles in the United States 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 may be approved by a significant segment of the accounting
      profession of the United States, which are in effect on the Issue Date,
      consistently applied.

     

    “Global
      Note”
means
      a
      Subordinated Note evidencing all or a part of the Subordinated Notes issued
      in
      accordance with Section
      2.02
      and
      substantially in the form of Exhibit
      A
      (with
Exhibit B)
      attached hereto.

     

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

     

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

     

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

     

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

     

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

     

    “Guarantor”
means,
      collectively and individually, the Subsidiary Guarantors.

     

    “Holder”
means
      a
      Person in whose name a Subordinated Note is registered.

     

    “Indebtedness”
means,
      with respect to any Person on any date of determination,

     

    (i) any
      indebtedness of such Person, whether or not contingent, in respect of borrowed
      money or evidenced by bonds, notes, debentures or similar instruments or letters
      of credit (or reimbursement agreements in respect thereof) or representing
      the
      balance deferred and unpaid of the purchase price of any property (including
      pursuant to capital leases not incurred in the ordinary course of business),
      except any such balance outstanding as of the Issue Date and balances that
      constitutes an accrued expense or trade payable, if and to the extent any of
      the
      foregoing (other than letters of credit) would appear as a liability upon a
      balance sheet of such Person prepared in accordance with GAAP,

     

    Subordinate
      Note Indenture

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (ii) all
      capital lease obligations of such Person, except as incurred in the ordinary
      course of business,

     

    (iii) all
      indebtedness of others secured by a Lien on any asset of such Person (whether
      or
      not such indebtedness is assumed by such Persons), 

     

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

     

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

     

    (vi) all
      obligations to purchase, redeem, retire, defease or otherwise acquire for value
      any stock or any warrants, rights or options to acquire such stock valued,
      in
      the case of stock, at the greatest amount payable in respect thereof on a
      liquidation (whether voluntary or involuntary) plus accrued and unpaid
      dividends, and

     

    (vii) to
      the
      extent not otherwise included, the Guarantee of items that would be included
      within this definition and any amendment, supplement, modification, deferral,
      renewal, extension or refunding of any of the above.

     

    Notwithstanding
      the foregoing, in no event will performance bonds or similar security for
      performance be deemed Indebtedness so long as such performance bonds or similar
      security for performance would not appear as a liability on a balance sheet
      of
      such Person prepared in accordance with GAAP, and provided,
      that
      the
      amount of any Indebtedness in respect of any Guarantee shall be the maximum
      principal amount of the Indebtedness so guaranteed.

     

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

     

    “Intercreditor
      Agreement”
means
      the Intercreditor Agreement in substantially the form of Exhibit C
      hereto.

     

    “Interest
      Payment Date”
means
      (a) January
      15, April 15, July 15 and October 15, commencing April 15, 2008,
      or if
      any such day is not a Business Day, on the next succeeding Business Day; and
      (b)
      for the Subordinated Notes subject to redemption in whole or in par on any
      date,
      the date of such redemption.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Interest
      Rate”
means
      the annual interest rate applicable at any time and from time to time with
      respect to the Subordinated Note Obligations, as provided in the Subordinated
      Notes.

     

    “Investments”
means,
      with respect to any Person, all direct or indirect investments by such Person
      in
      other Persons (including Affiliates) in the forms of loans, Guaranties, advances
      or capital contributions (excluding commission, travel and similar advances
      to
      officers and employees made in the ordinary course of business), purchases
      or
      other acquisitions for consideration of Indebtedness, Equity Interests or other
      securities of any other Person and all other items that are or would be
      classified as investments on a balance sheet prepared in accordance with GAAP.
      If the Company or any Subsidiary of the Company sells or otherwise disposes
      of
      any Capital Stock of any direct or indirect Subsidiary of the Company, such
      that
      after giving effect to any such sale or disposition, such Person is no longer
      a
      Subsidiary of the Company, the Company will be deemed to have made an Investment
      on the date of any such sale or disposition equal to the fair market value
      of
      the Capital Stock of such Subsidiary not sold or disposed of. The acquisition
      by
      the Company or any Subsidiary of the Company of a Person that holds an
      investment in a third person will be deemed to be an Investment by the Company
      or such Subsidiary in such third Person in an amount equal to the Fair Market
      Value of such Investment held by the acquired Person in such third Person.
      

     

    “Investor
      Letter”
means
      a
      written instrument signed by each original purchaser of the Subordinated Notes
      as a condition precedent to the issuance of a Subordinated Note to such
      purchaser and each transferee of a Note in substantially the same form as that
      attached hereto as Exhibit G.

     

    “Issue
      Date”
means
      January 3, 2008.

     

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

     

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

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Marketable
      Securities”
      means:

     

    (i) Government
      Securities,

     

    (ii) any
      certificate of deposit maturing not more than 270 days after the date of
      acquisition that is issued by, or time deposit of, an Eligible
      Institution,

     

    (iii) commercial
      paper maturing not more than 270 days after the date of acquisition issued
      by a
      corporation (other than an Affiliate of the Company) with a rating, at the
      time
      as of which any investment therein is made, of “A-1” (or higher) according to
      Standard & Poor’s or “P-1” (or higher) according to Moody’s,

     

    (iv) any
      banker’s acceptances or money market deposit accounts issued or offered by an
      Eligible Institution, and

     

    (v) any
      fund
      with assets of at least $500 million investing exclusively in investments of
      the
      types described in clauses (i) through (iv) above.

     

    “Moody’s”
means
      Moody’s Investors Service, Inc. and its successors.

     

    “Mortgage”
means
      the deed of trust delivered by a Forster Subsidiary conveying a subordinated
      lien and security interest in certain real property of the Company, in form
      and
      substance satisfactory to the Trustee and Special Counsel.

     

    “Net
      Proceeds”
means
      the aggregate cash proceeds received by the Company or any of its Restricted
      Subsidiaries in respect of any sale of any assets that constitute Collateral,
      net of the direct costs relating to such sale (including, without limitation,
      legal, accounting and investment banking fees, and sales commissions) and any
      relocation expenses incurred as a result thereof, taxes paid or payable as
      a
      result thereof (in each case, after taking into account any available tax
      credits or deductions and any tax sharing arrangements), amounts required to
      be
      applied to the repayment of Indebtedness secured by a Lien on the asset or
      assets that are the subject of such asset sale, any reserve for adjustment
      in
      respect of the sale price of such asset or assets and any contingent purchase
      price payments in connection with purchase price adjustments, escrowed proceeds,
      reserves or indemnities until such amounts are released. Net Proceeds shall
      exclude any non-cash proceeds received from any asset sale, but shall include
      such proceeds when and as converted by the Company or any Restricted Subsidiary
      of the Company to cash.

     

    “Net
      Revenues”
means
      Revenues, less those Operation and Maintenance Expenses, charges and deductions
      that are allowable for federal tax purposes in the calculation of taxable income
      and as reported by the Company on its federal tax returns, exclusive of
      depletion, impairment, interest, depreciation and amortization.

     

    “New
      Subsidiaries”
means
      direct or indirect Subsidiaries of the Company formed or acquired after
      execution of the Indenture.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Obligations”
means
      any principal, interest, penalties, fees, indemnifications, reimbursements
      (including reimbursement obligations with respect to letters of credit and
      banker’s acceptances), damages and other liabilities, and guarantees of payment
      of such principal, interest, penalties, fees, indemnifications, reimbursements,
      damages and other liabilities, payable under the documentation governing any
      Indebtedness, for avoidance of doubt, Capital Stock and Operation and
      Maintenance Expenses are not Obligations.

     

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

     

    “Officers’
      Certificate”
means,
      with respect to any Person, a certificate signed by the Chief Executive Officer
      or President and the Chief Financial Officer of such Person. 

     

    “Oil
      Rig Business”
means,
      when used in reference to any Person, that such Person is engaged primarily
      in
      the business of manufacturing, remanufacturing, assembly and reassembly of
      oil
      and natural gas rigs and equipment; provided,
      that
      the determination of what constitutes an Oil Rig Business shall be made in
      good
      faith by the Board of Directors and shall include exploration activities that
      may be part of a drilling contract entered into by the Company or Forster
      Subsidiary.

     

    “Oil
      Rig Related Assets”
means
      all assets, rights (contractual or otherwise), concessions, including without
      limitation, those set forth on Exhibit E, and comprising Rigs #15, #12, #41
      and
      #22, used in connection with the Company’s Oil Rig Business, which are currently
      encumbered by liens that will be paid off immediately following the Closing.
      

     

    “Operation
      and Maintenance Expenses”
means,
      for any period, all ordinary and necessary expenses of operation, labor, payroll
      taxes, state and local taxes, materials, supplies, repair, maintenance and
      insuring of the Oil Rig Related Assets and other properties and assets of the
      Company under generally accepted accounting principles, and shall include the
      monthly or other periodic payment of annual insurance premiums, except that
      there shall not be included: (i) any allowance for depreciation, depletion
      or
      impairment, or (ii) any deposits or transfers to the credit of the Subordinated
      Note Fund or any other fund or account created for the payment of Debt Service
      on the Notes or Additional Obligations as permitted under this
      Indenture.

     

    “Opinion
      of Counsel”
means
      an opinion from legal counsel, who may be an employee of or counsel to the
      Company, any Restricted Subsidiary of the Company or the Trustee.

     

    “Percentage”
means,
      for each Holder, the percentage resulting from the principal amount outstanding
      on each such Holder’s Subordinated Notes divided
      by
      the
      total aggregate principal amount of Subordinated Notes outstanding.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Permitted
      Investment”
means
      

     

    (i) any
      Investments in the Company or any Restricted Subsidiary of the Company or any
      Person that will become a Restricted Subsidiary, provided,
      however,
      such
      Restricted Subsidiary’s primary business is the Oil Rig Business,

     

    (ii) any
      Investments in Marketable Securities, 

     

    (iii) Investments
      by the Company or any Restricted Subsidiary of the Company in a Person, if
      as a
      result of such Investment (a) such Person becomes a Restricted Subsidiary of
      the
      Company or (b) such Person is merged, consolidated or amalgamated with or into,
      or transfers or conveys substantially all of its assets to, or is liquidated
      into, the Company or a Restricted Subsidiary of the Company, provided,
      however,
      such
      Restricted Subsidiary’s primary business is the Oil Rig Business, 

     

    (iv) any
      Investment in property or assets to be used in (a) any line of business in
      which
      the Company or any of its Restricted Subsidiaries was engaged on the Issue
      Date
      or (b) any Oil Rig Business, 

     

    (v) Investments
      in any Person primarily engaged in the Oil Rig Business in connection with
      the
      acquisition of such Person or substantially all of the property or assets of
      such Person by the Company or any Restricted Subsidiary of the Company;
provided,
      that
      within 90 days from the first date of any such Investment, either (a) such
      Person becomes a Restricted Subsidiary of the Company or any of its Restricted
      Subsidiaries or (b) the amount of any such Investment is repaid in full to
      the
      Company or any of its Restricted Subsidiaries,

     

    (vi) Investments
      in prepaid expenses, negotiable instruments held for collection and lease,
      utility and workers’ compensation, performance and other similar deposits,
      and

     

    (vii) Investments
      aggregating not more than US$1.0 million in securities or other debt instruments
      of companies with a minimum Moody’s bond rating of Aa that mature or are
      redeemed within 180 days of the date of the purchase thereof.

     

    “Permitted
      Liens”
means
      

     

    (i) Liens
      in
      favor of the Company, 

     

    (ii) Liens
      on
      property of a Person existing at the time such Person is merged into or
      consolidated with the Company or any Restricted Subsidiary of the Company;
      provided,
      that
      such Liens were in existence prior to the contemplation of such merger or
      consolidation and do not extend to any assets other than those of the Person
      merged into or consolidated with the Company, 

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (iii) Liens
      on
      property existing at the time of acquisition thereof by the Company or any
      Restricted Subsidiary of the Company; provided,
      that
      such Liens were in existence prior to the contemplation of such acquisition,
      

     

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

     

    (v) Liens
      for
      taxes, assessments or governmental claims that are not yet delinquent or that
      are being contested in good faith by appropriate proceedings timely instituted
      and diligently concluded; provided,
      that
      any reserve or other appropriate provision as shall be required in conformity
      with GAAP shall have been made therefor, 

     

    (vi) Liens
      incurred in the ordinary course of business of the Company or any Restricted
      Subsidiary of the Company with respect to obligations that do not exceed $5.0
      million at any one time outstanding and that (a) are not incurred in connection
      with the borrowing of money or the obtaining of advances or credit (other than
      trade credit in the ordinary course of business) and (b) do not in the aggregate
      materially detract from the value of the property or materially impair the
      use
      thereof in the operation of business by the Company or such Restricted
      Subsidiary, 

     

    (vii) Liens
      on
      existing Oil Rig Related Assets existing during the time of the construction
      thereof, in each case to the extent the Investment in such assets is permitted
      under this Indenture, 

     

    (viii) easements,
      rights of way, municipal and zoning ordinances and similar charges and
      encumbrances, title defects or other irregularities that do not materially
      interfere with the ordinary course of business of the Company or any Restricted
      Subsidiary,

     

    (ix) Liens
      in
      favor of the Holders of the Subordinated Notes, 

     

    (x) Liens
      in
      favor of the holders of the Senior Notes created by the Senior Note Documents,
      which it is hereby acknowledged are senior and superior to the Liens in favor
      of
      the Holders of the Subordinated Notes created pursuant to this Indenture and
      the
      Collateral Documents, and

     

    (xi) Liens
      created by the issuance of Expansion Debt and the Working Capital Loan,

     

    (xii) Liens
      that do not have a material adverse effect on the business or financial
      condition of the Company and Forster Subsidiaries taken as a whole,
      and

     

    (xiii) Liens
      that are being paid off from Subordinated Note Proceeds.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

     

    “Placement
      Agent”
means
      Crews & Associates, Inc.

     

    “Placement
      Agreement”
means
      that certain Placement Agreement dates as of December 20, 2007 between the
      Company and the Placement Agent pursuant to which Placement Agent has privately
      placed the Notes.

     

    “Pledged
      Revenues”
means
      seventy-five percent (75%) of all Net Revenues.

     

    “Preferred
      Stock”
as
      applied to the Capital Stock of any Person, means Capital Stock of such Person
      of any class or classes (however designated) that ranks prior, as to payment
      of
      dividends or as to the distribution of assets upon any voluntary or involuntary
      liquidation, dissolution or winding up of such Person, to shares of Capital
      Stock of any other class of such Person.

     

    “Qualified
      Accountant” means an independent certified public accountant in the regular
      employ or hire of Company, including, but not limited to, the Company’s current
      independent firm of certified public accountants. For purposes of the issuance
      or incurrence of Expansion Debt at a time when current audited financial
      statements of the Company are unavailable, a Qualified Accountant may include
      Company’s chief financial officer or other certified public accountant employed
      or hired by Issuer.

     

    “Receivables”
means,
      with respect to any Person, all of the following property and interests in
      property of such person or entity, whether now existing or existing in the
      future or hereafter acquired or arising provided that they arise out of the
      Revenues: (i) accounts, (ii) accounts receivable, including, without limitation,
      all rights to payment created by or arising from sales of goods, leases of
      goods
      or the rendition of services no matter how evidenced, whether or not earned
      by
      performance, (iii) all unpaid seller’s or lessor’s rights including, without
      limitation, rescission, replevin, reclamation and stoppage in transit, relating
      to any of the foregoing after creation of the foregoing or arising therefrom;
      (iv) all rights to any goods or merchandise represented by any of the
      foregoing, including, without limitation, returned or repossessed goods, (v)
      all
      reserves and credit balances with respect to any such accounts receivable or
      account debtors, (vi) all letters of credit, security, or Guaranties for any
      of
      the foregoing, (vii) all insurance policies or reports relating to any of the
      foregoing, (viii) all collection of deposit accounts relating to any of the
      foregoing; (ix) all proceeds of any of the foregoing, and (x) all books and
      records relating to any of the foregoing.

     

    “Responsible
      Officer”
when
      used with respect to the Trustee, means any officer within the Corporate Trust
      Department of the Trustee (or any successor group of the Trustee) or any other
      officer of the Trustee customarily performing functions similar to those
      performed by any of the above designated officers and also means, with respect
      to a particular corporate trust matter, any other officer to whom such matter
      is
      referred because of his knowledge of and familiarity with the particular
      subject.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

     

    “Restricted
      Payment” means,

     

    (i) any
      dividend or any distribution, direct or indirect, on account of any Equity
      Interests of, or other Equity Interests in, the Company or any of its Restricted
      Subsidiaries other than dividends or distributions payable (A) in Equity
      Interests of the Company or (B) to the Company or any Restricted
      Subsidiary,

     

    (ii) any
      payment to Retire any Equity Interests of the Company or any of its Subsidiaries
      or other Affiliate of the Company (other than any such Equity Interests owned
      by
      the Company or any Restricted Subsidiary, employee, consultant, officer or
      director of the Company or any Restricted Subsidiary or Equity Interests of
      any
      Subsidiary or other Affiliate of the Company that qualifies as a Permitted
      Investment), or

     

    (iii) any
      payment to Retire any Indebtedness of the Company or its Restricted Subsidiaries
      that is subordinate in right of payment to the Senior Notes except at final
      maturity or in accordance with the mandatory redemption or repayment provisions
      set forth in the original documentation governing such
      Indebtedness.

     

    “Restricted
      Subsidiary”
means
      the Forster Subsidiaries, provided,
      however,
      that
      upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted
      Subsidiary, such Subsidiary shall be included in the definition of “Restricted
      Subsidiary.”

     

    “Retire”
and
      “Retirement”
mean
      purchase, redeem, defease, retire or otherwise acquire any interest for
      value.

     

    “Revenues”
      means all contract drilling income earned pursuant to every type of drilling
      contract, rents, charges, fees, Net Proceeds, issue and other income, except
      for
      reimbursements for drill pipe and other component parts by FDI derived by the
      Company or the Forster Subsidiaries at any time and from time to time from
      the
      operation of Forster Drilling, Inc. and the drilling rigs and equipment
      associated with Rigs # 15, #12, #22 and #41. “Securities
      Act”
means
      the United States Securities Act of 1933, as amended (or any successor act),
      and
      the rules and regulations thereunder.

     

    “Senior
      Notes”
means
      the Company’s $4,805,000 Senior Secured Notes due January 15, 2013 and issued
      under the Senior Notes Indenture. The Senior Notes are senior in Lien and the
      right of payment to the Subordinated Notes.

     

    “Senior
      Note Collateral Documents”
means,
      collectively, the Senior Note Security Agreement, the Senior Note Stock Pledge
      Agreement and any other mortgage, pledge, stock pledge, deed of trust,
      collateral assignment, security agreement, fiduciary transfer, debenture,
      fiduciary assignment or other agreements or instruments evidencing or creating
      any Liens in favor of the Senior Note Collateral Agent in all or any portion
      of
      the Senior Notes Collateral pursuant to or in connection with the Senior Notes
      Indenture or any other Senior Note Document, in each case, as amended, restated,
      extended, renewed, supplemented or otherwise modified from time to time, in
      accordance with the terms thereof.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    “Senior
      Note Documents”
means
      the Senior Note Indenture, the Senior Notes, the Senior Note Collateral
      Documents and the other documents entered into by the Company, any Restricted
      Subsidiary, the Trustee, the Collateral Agent and/or any other party pursuant
      to
      or in connection with the Indenture or any other Senior Note
      Document.

     

    “Senior
      Note First Lien Collateral”
means
      the Unencumbered Assets and any assets specified as being Collateral
      hereunder.

     

    “Senior
      Note Obligations”
means
      the Obligations of the Company and the Guarantors (including all interest
      accrued thereon after the commencement of any insolvency or liquidation
      proceeding at the rate, including any applicable post-default rate, specified
      in
      Senior Note Indenture, the Senior Notes and the other Senior Note Documents,
      even if such interest is not enforceable, allowable or allowed as a claim in
      such proceeding) in respect of the Senior Notes.

     

    “Senior
      Note Security Agreements”
      means
      one or more agreements or equivalent documents granting to the Senior Note
      Collateral Agent for the benefit of the Senior Note Holders a security interest
      in all of the personal property of the Company and the Forster Subsidiaries
      pursuant to or in connection with the Indenture or other Senior Note Documents.
      

     

    “Senior
      Note Stock Pledge Agreement”
means
      one or more stock pledge agreements or equivalent documents granting to the
      Senior Note Collateral Agent for the benefit of Senior Note Holders a security
      interest in all of the Capital Stock of the Forster Subsidiaries. 

     

    “Standard
      & Poor’s”
means
      Standard and Poor’s, a division of The McGraw-Hill Companies, and its
      successors.

     

    “Subordinated
      Notes”
means,
      collectively, the $1,215,000 Subordinated Notes due January 15, 2013 issued
      under this Indenture.

     

    “Subordinated Note
      Documents”
means,
      collectively, this Indenture, the Subordinated Notes, the Collateral Documents
      and the other documents entered into by the Company, any Restricted Subsidiary,
      the Trustee, the Collateral Agent and/or any other party pursuant to or in
      connection with the Indenture or any other Senior Note Document.

     

    “Subordinated Note
      Obligations”
means
      the Subordinated Note Debt and all other Obligations of the Company and the
      Subsidiary Guarantors (including all interest accrued thereon after the
      commencement of any insolvency or liquidation proceeding at the rate, including
      any applicable post-default rate, specified in the Subordinated Note Documents,
      even if such interest is not enforceable, allowable or allowed as a claim in
      such proceeding) in respect of the Subordinated Note Debt.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    “Subsidiary”
of
      any
      Person means (i) any corporation, association or business entity of which more
      than 50% of the total 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 is at the time owned or controlled,
      directly or indirectly, by such Person or one or more of the other Subsidiaries
      of such Person or a combination thereof and (ii) any partnership (a) the sole
      general partner or the managing general partner of which is such Person or
      a
      Subsidiary of such person or (b) the only general partners of which are such
      Person or one or more Subsidiaries of such Person or any combination
      thereof.

     

    “Subsidiary
      Guarantors”
means,
      individually and collectively Forster Drilling, Inc., a Texas corporation
      (“FDI”), Forster Tool & Supply, Inc., a Nevada corporation (“FTSI”), and
      Forster Exploration & Production, Inc., a Nevada corporation (“FEP”)
      (collectively, FDI, FTSI and FEP are referred to herein as the “Foster
      Subsidiaries”).
      

     

    “TIA”
means
      the United States Trust Indenture Act of 1939, as it may be amended from time
      to
      time.

     

    “Trading
      Day”
with
      respect to a securities exchange or automated quotation system, means a day
      on
      which such exchange or system is open for a full day of trading.

     

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

     

    “UCC”
means
      the Uniform Commercial Code as in effect on the date of determination in the
      relevant jurisdiction, or any successor statute thereto. 

     

    “Unrestricted
      Subsidiary”
means
      any Subsidiary of the Company that is designated by the Board of Directors
      as an
      Unrestricted Subsidiary pursuant to a Board Resolution.

     

    “Voting
      Stock”
of
      any
      Person means Capital Stock of such Person which ordinarily has voting power
      for
      the election of directors (or Persons performing similar functions) of such
      Person, whether at all times or only so long as no senior class of securities
      has such voting power by reason of any contingency.

     

    “Working
      Capital Credit Facility”
means
      a
      line of credit subordinate to the Senior Notes in an amount not to exceed
      $1,000,000 incurred pursuant to the terms and conditions of Section
      4.09(a).

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    “Written
      Request”
means
      any written request, letter or similar document from the Company to Trustee
      and
      signed by the appropriate Officer, including, but not limited to, the initial
      written closing and delivery instructions.

     

    
      
        
          	SECTION 1.02	
                  Other
                    Definitions.

                

        

      

    

     

    
      	 	 	
              Defined
                in

            	 
	
              Term

            	 	
              Section

            	 
	 	 	 	 
	
              “Additional
                Collateral” 

            	 	 	
              4.09

            	 
	
              “Affiliate
                Transaction” 

            	 	 	
              4.12

            	 
	
              “Agent
                for Service” 

            	 	 	
              14.14

            	 
	
              “Agent
                Members” 

            	 	 	
              2.01

            	 
	
              “Authentication
                Order” 

            	 	 	
              2.02

            	 
	
              “Change
                of Control Offer” 

            	 	 	
              3.10

            	 
	
              “Change
                of Control Payment” 

            	 	 	
              3.10

            	 
	
              “Change
                of Control Payment Date” 

            	 	 	
              3.10

            	 
	
              “Covenant
                Defeasance” 

            	 	 	
              9.03

            	 
	
              “Collateral
                Valuation” 

            	 	 	
              4.09

            	 
	
              “Event
                of Default” 

            	 	 	
              7.01

            	 
	
              “Excess
                Revenue Offer” 

            	 	 	
              3.09

            	 
	
              “Financial
                Reports”

            	 	 	
              4.05

            	 
	
              “incur”
                

            	 	 	
              4.12

            	 
	
              “Legal
                Defeasance” 

            	 	 	
              9.02

            	 
	
              “Offer
                Amount” 

            	 	 	
              3.09

            	 
	
              “Offer
                Period” 

            	 	 	
              3.09

            	 
	
              “Paying
                Agent” 

            	 	 	
              2.03

            	 
	
              “Payment
                Default” 

            	 	 	
              7.01

            	 
	
              “Purchase
                Date”

            	 	 	
              3.09

            	 
	
              “Registrar”
                

            	 	 	
              2.03

            	 

    

    

    
      
        
          	SECTION 1.03	
                  Incorporation
                    by Reference OF
                    Trust
                    Indenture Act.

                

        

      

    

     

    Whenever
      this Indenture refers to a provision of the TIA, the provision is incorporated
      by reference in and made a part of this Indenture.

     

    The
      following TIA terms used in this Indenture have the following meanings:

     

    “indenture
      securities” means the Subordinated Notes;

     

    “indenture
      security holder” means a Holder of a Subordinated Note;

     

    “indenture
      to be qualified” means this Indenture;

     

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

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    “obligor”
      on the Subordinated Notes means the Company and any successor obligor upon
      the
      Subordinated Notes.

     

    All
      other
      terms used in this Indenture that are defined by the TIA, defined by TIA
      reference to another statute or defined by rules promulgated by the Commission
      under the TIA have the meanings so assigned to them.

     

    
      
        
          	SECTION 1.04	
                  Rules
                    of Construction.

                

        

      

    

     

    Unless
      the context otherwise requires:

     

    1. a
      capitalized term has the meaning assigned to it under this
      Article 1;

     

    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; and

     

    5. words
      in
      the singular include the plural, and words in the plural include the
      singular.

     

    ARTICLE
      2

     

    THE
      SUBORDINATED NOTES

     

    
      
        
          	SECTION 2.01	
                  Terms;
                    Form and Dating.

                

        

      

    

     

    (a) General.
      

     

    (i). The
      Subordinated Notes shall bear interest at the Interest Rate in effect from
      time
      to time, subject to Section
      4.01
      below.

     

    (ii) No
      Subordinated Notes may be issued under the provisions of this Indenture except
      in accordance with this Article 2. The total principal amount of the
      Subordinated Notes that may be issued is hereby expressly limited to $1,215,000,
      except as provided in Section 2.07 with respect to replacement Notes.
      Additionally, Expansion Debt may be issued hereunder form time to time in such
      amount as shall be specified in a supplemental indenture.

     

    (iii) The
      Subordinated Notes: (A) shall be designated “Forster Drilling Corporation
      $1,215,000 17.00% Subordinated Notes, Series 2007,” maturing on January 15, 2013
      (B) shall be in the aggregate principal amount of $1,215,000; (C) shall be
      dated as of January 3, 2008; (D) shall be payable in installments of
      interest-only payments to be paid on April 15, 2008, and on each January
      15, April 15, July 15 and October 15
      thereafter until maturity; and (E) shall be issued in Authorized Denominations
      only.

     

    Subordinate
      Note Indenture

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (b) Form
      of Certificated Notes.
      The
      Subordinated Notes and the Trustee’s certificate of authentication, other than
      those issued in global form, shall be substantially in the form of Exhibit
      A
      hereto,
      the terms of which are hereby incorporated in and expressly made a part of
      this
      Indenture. The Subordinated Notes may have notations, legends or endorsements
      required by law, stock exchange rule or usage in addition to those set forth
      on
Exhibit
      A.
      Each
      Subordinated Note shall be dated the date of its authentication. The terms
      and
      provisions contained in the Subordinated Notes shall constitute, and are hereby
      expressly made, a part of this Indenture, and the Company, the Guarantors and
      the Trustee, by their execution and delivery of this Indenture, expressly agree
      to such terms and provisions and to be bound thereby. To the extent any
      provision of any Subordinated Note conflicts with the express provisions of
      this
      Indenture, the provisions of the Indenture shall govern and be
      controlling.

     

    (c) Form
      of Global Notes.
      Subordinated Notes issued in global form shall be substantially in the form
      of
Exhibit
      A
      attached
      hereto (but including the Global Note Legend thereon and the “Schedule of
      Exchanges of Interests in the Global Note” attached as Exhibit
      B
      hereto).
      Each Global Note shall represent such aggregate principal amount of the
      outstanding Subordinated Notes as shall be specified therein, and each shall
      provide that it shall represent the aggregate principal amount of outstanding
      Subordinated Notes from time to time endorsed thereon and that the aggregate
      principal amount of outstanding Subordinated Notes represented thereby may
      from
      time to time be reduced or increased, as appropriate, to reflect exchanges
      and
      redemptions thereof and transfers of interests therein. Any endorsement of
      a
      Global Note to reflect the amount of any increase or decrease in the aggregate
      principal amount of outstanding Subordinated Notes represented thereby shall
      be
      made by the Trustee or the Custodian, at the direction of the Trustee, in
      accordance with instructions given by the Holder thereof as required by
Section
      2.06
      hereof.

     

    (d) Book-entry
      Provisions.
      This
Section
      2.01(d)
      shall
      apply only to Global Notes deposited with the Trustee, as custodian for the
      Depository. Members of, or participants in, the Depository (“Agent
      Members”)
      shall
      have no rights under this Indenture with respect to any Global Note held on
      their behalf by the Depository, or the Trustee as its custodian, or under the
      Global Note, and the Depository or its nominee, as the case may be, may be
      treated by the Company, the Trustee and any agent of the Company or the Trustee
      as the absolute owner of the Global Note for all purposes whatsoever.
      Notwithstanding the foregoing, nothing herein shall prevent the Company, the
      Trustee or any agent of the Company or the Trustee from giving effect to any
      written certification, proxy or other authorization furnished by the Depository
      or impair, as between the Depository and its Agent Members, the operation of
      customary practices governing the exercise of the rights of a holder of any
      Subordinated Note.

     

    Subordinate
      Note Indenture

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (e) Certificated
      Securities.

     

    (i) The
      Company shall issue Certificated Notes to all owners of beneficial interests
      in
      Global Notes if: (1) at any time the Depository notifies the Company that it
      is
      unwilling or unable to continue to act as Depository for the Global Notes or
      if
      at any time the Depository shall no longer be eligible to act as such because
      it
      ceases to be a properly-registered clearing agency, and, in either case, the
      Company shall not have appointed a successor Depository within 120 days after
      the Company receives such notice or becomes aware of such ineligibility or
      (2)
      the Company, at its option, determines that the Global Notes shall be exchanged
      for Certificated Notes and delivers a written notice to such effect to the
      Trustee. Upon the occurrence of any of the events set forth in clauses (1)
      or
      (2) above, the Company shall execute, and, upon receipt of an Authentication
      Order in accordance with Section
      2.02
      hereof,
      the Trustee shall authenticate and deliver, Certificated Notes, in authorized
      denominations, in an aggregate principal amount equal to the principal amount
      of
      the Global Notes in exchange for such Global Notes. Upon the exchange of a
      Global Note for Certificated Notes, such Global Note shall be cancelled by
      the
      Trustee or an agent of the Company or the Trustee. 

     

    (ii) The
      Company shall issue Certificated Notes to a Holder of, or an owner of a
      beneficial interest in, a Global Note in exchange for such Global Note or
      beneficial interest, as the case may be, upon written request from Holders
      (or
      owners of beneficial interests) representing 25% or more of the then outstanding
      principal amount of the Subordinated Notes, if a Default or Event of Default
      shall have occurred and be continuing. Upon the occurrence of the foregoing,
      the
      Company shall execute, and, upon receipt of an Authentication Order in
      accordance with Section
      2.02
      hereof,
      the Trustee shall authenticate and deliver, Certificated Notes, in authorized
      denominations, in an aggregate principal amount equal to the principal amount
      of
      the Global Note owned by such Holder or such owner of a beneficial interest.
      Upon the exchange of all or a portion of a Global Note for Certificated Notes,
      such Global Note shall be cancelled or correspondingly reduced by the Trustee
      or
      an agent of the Company or the Trustee. In the event that the Certificated
      Notes
      are not issued to an owner of a beneficial interest in a Global Note promptly
      after the Company has received a request from such owner, the Company expressly
      acknowledges, with respect to the right of any Holder to pursue a remedy
      pursuant to this Indenture, the right of any such owner to pursue such remedy
      with respect to the portion of the Global Note that represents such owner’s
      beneficial interest as if such Certificated Notes had been issued. 

     

    (iii) Certificated
      Notes issued in exchange for a Global Note pursuant to this Section
      2.01
      shall be
      registered in such names and in such authorized denominations as the Depository,
      pursuant to instructions from its Agent Members or its Applicable Procedures,
      shall instruct the Trustee or an agent of the Company or the Trustee in writing.
      The Trustee or such agent shall deliver such Certificated Notes to or as
      directed by the Persons in whose names such Certificated Notes are so registered
      or to the Depository. 

     

    Subordinate
      Note Indenture

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      
        
          	SECTION 2.02	
                  Execution
                    and
                    Authentication.

                

        

      

    

     

    (a) A
      duly
      authorized Officer of the Company shall sign the Subordinated Notes for the
      Company by manual or facsimile signature. 

     

    (b) If
      an
      Officer whose signature is on a Subordinated Note no longer holds that office
      at
      the time a Subordinated Note is authenticated, the Subordinated Note shall
      nevertheless be valid. In addition, if a Person is not an Officer at the time
      a
      Subordinated Note is authenticated, but becomes an Officer on or prior to the
      delivery of the Subordinated Note, the Subordinated Note shall nevertheless
      be
      valid.

     

    (c) A
      Subordinated Note shall not be valid until authenticated by the manual signature
      of an authorized signatory of the Trustee. The signature of the Trustee shall
      be
      conclusive evidence that the Subordinated Note has been authenticated under
      this
      Indenture.

     

    (d) The
      Trustee shall, upon a written order of the Company signed by an Officer of
      the
      Company (an “Authentication
      Order”),
      authenticate and deliver the Subordinated Notes for issuance. 

     

    (e) The
      Trustee may appoint an authenticating agent acceptable to the Company to
      authenticate Subordinated Notes. Unless limited by the terms of such
      appointment, an authenticating agent may authenticate Subordinated Notes
      whenever the Trustee may do so. Each reference in this Indenture to
      authentication by the Trustee includes authentication by such agent. An
      authenticating agent has the same rights as an Agent to deal with the Holders,
      the Company or an Affiliate of the Company.

     

    (f) The
      Subordinated Notes shall be issuable only in denominations of US$5,000 principal
      amount at maturity and any integral multiple thereof.

     

    
      
        
          	SECTION 2.03	
                  Registrar
                    and Paying Agent.

                

        

      

    

     

    (a) The
      Company shall maintain an office or agency (which may be an office of the
      Trustee or an affiliate of the Trustee, registrar or co-registrar) where
      Subordinated Notes may be presented for registration of transfer or for exchange
      (“Registrar”),
      an
      office or agency where Subordinated Notes may be presented for payment
      (“Paying
      Agent”)
      and an
      office or agency where notices and demands to or upon the Company in respect
      of
      the Subordinated Notes and this Indenture may be served. The Registrar shall
      keep a register of the Subordinated Notes and of their transfer and exchange.
      The Company may appoint 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 additional paying agent. The Company may change any Paying Agent
      or
      Registrar without notice to any Holder. The Company shall notify the Trustee
      and
      the Trustee shall notify the Holders of the Subordinated Notes in writing of
      the
      name and address of any Agent not a party to this Indenture. The Company or
      any
      of its Restricted Subsidiaries may act as Paying Agent or Registrar. The Company
      shall enter into an appropriate agency agreement with any Registrar or Paying
      Agent not a party to this Indenture. The agreement shall implement the
      provisions of this Indenture that relate to such agent. The Company shall notify
      the Trustee of the name and address of any such agent. If the Company fails
      to
      maintain a Registrar or Paying Agent, or fails to give the foregoing notice,
      the
      Trustee shall act as such, and shall be entitled to appropriate compensation
      in
      accordance with Section
      8.07
      hereof.

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (b) The
      Company initially appoints DTC to act as Depository with respect to the Global
      Notes.

     

    (c) The
      Company initially appoints the Trustee to act as the Registrar and Paying Agent
      and to act as Custodian with respect to the Global Notes, and the Trustee hereby
      agrees so to initially act. Except as otherwise specifically provided herein,
      (i) all references in this Indenture to the Trustee shall be deemed to refer
      to
      the Trustee in its capacity as Trustee and in its capacities as Registrar and
      Paying Agent and (ii) every provision of this Indenture relating to the conduct
      of or affecting the liability of or offering protection, immunity or indemnity
      to the Trustee shall be deemed to apply with the same force and effect to the
      Trustee acting in its capacities as Paying Agent and Registrar.

     

    
      	
              SECTION
                2.04

            	
              Paying
                Agent to Hold Money in Trust.

            

    

     

    The
      Company shall require each Paying Agent other than the Trustee to agree in
      writing that the Paying Agent shall hold in trust for the benefit of Holders
      or
      the Trustee all money held by the Paying Agent for the payment of principal
      or
      interest on the Subordinated Notes, and shall notify the Trustee of any default
      by the Company in making any such payment. While any such default continues,
      the
      Trustee may require a Paying Agent to pay all funds held by it to the Trustee.
      The Company at any time may require a Paying Agent to pay all funds held by
      it
      to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
      than the Company or a Restricted Subsidiary) shall have no further liability
      for
      such funds. If the Company or a Restricted Subsidiary acts as Paying Agent,
      it
      shall segregate and hold in a separate trust fund for the benefit of the Holders
      all funds held by it as Paying Agent. Upon the occurrence, and during the
      continuation, of any Event of Default, the Trustee shall serve as Paying Agent
      and Registrar for the Subordinated Notes.

     

    
      	
              SECTION
                2.05

            	
              Holder
                Lists.

            

    

     

    If
      it is
      the Registrar, 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
      all Holders and shall otherwise comply with TIA §312(a). If the Trustee is not
      the Registrar, the Company shall furnish to the Trustee at least five Business
      Days before each interest payment date and at such other times as the Trustee
      may request in writing, a list in such form and as of such date as the Trustee
      may reasonably require of the names and addresses of the Holders and the Company
      shall otherwise comply with TIA §312(a).

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                2.06

            	
              Transfer
                and Exchange.

            

    

     

    (a) Transfer
      and Exchange of Global Notes.
      A
      Global Note may not be transferred as a whole except by the Depository to a
      nominee of the Depository, by a nominee of the Depository to the Depository
      or
      to another nominee of the Depository, or by the Depository or any such nominee
      to a successor Depository or a nominee of such successor Depository. All Global
      Notes will be exchanged by the Company for Certificated Notes if (1) the Company
      delivers to the Trustee notice from the Depository that it is unwilling or
      unable to continue to act as Depository or that it is no longer a
      properly-registered clearing agency and, in either case, a successor Depository
      is not appointed by the Company within 120 days after the date of such notice
      from the Depository or (2) the Company in its sole discretion determines that
      the Global Notes (in whole but not in part) should be exchanged for Certificated
      Notes and delivers a written notice to such effect to the Trustee. Upon the
      occurrence of any of the preceding events in (1) or (2) above, Certificated
      Notes shall be issued in such names as the Depository shall instruct the
      Trustee. Global Notes also may be exchanged or replaced, in whole or in part,
      as
      provided in Sections
      2.07
      and
Section
      2.10
      hereof.
      Every Subordinated Note authenticated and delivered in exchange for, or in
      lieu
      of, a Global Note or any portion thereof, pursuant to this Section
      2.06
      or
Sections
      2.07
      or
Section
      2.10
      hereof,
      shall be authenticated and delivered in the form of, and shall be, a Global
      Note. A Global Note may not be exchanged for another Subordinated Note other
      than as provided in this Section
      2.06(a),
      however, beneficial interests in a Global Note may be transferred and exchanged
      as provided in Section
      2.06(b)
      or
(c)
      hereof.
      Neither the Company nor the Trustee will be liable for any delay by a Holder
      of
      a Global Note or the Depository in identifying the beneficial owners of
      Subordinated Notes, except as a result of the Company’s or Trustee’s own grossly
      negligent action, grossly negligent failure to act or own willful misconduct,
      as
      the case may be. In the absence of bad faith on their part, the Company and
      the
      Trustee may conclusively rely on, and will be protected in relying on written
      instructions from the Holder of a Global Note or the Depository for all purposes
      under this Indenture. 

     

    (b) Transfer
      and Exchange of Beneficial Interests in the Global Notes.
      The
      transfer and exchange of beneficial interests in the Global Notes shall be
      effected through the Depository, in accordance with the provisions of this
      Indenture and the Applicable Procedures. Beneficial interests in Global Notes
      may be subject to restrictions on transfer to the extent required by the
      Securities Act. Beneficial interests in any Global Note may be transferred
      to
      Persons who take delivery thereof in the form of a beneficial interest in a
      Global Note, in accordance with the Applicable Procedures. No written orders
      or
      instructions shall be required to be delivered to the Registrar to effect the
      transfers described in this Section
      2.06(b).
      

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (c) Transfer
      or Exchange of Beneficial Interests for Certificated Notes. The
      holder of a beneficial interest in a Global Note may exchange such beneficial
      interest for a Certificated Note or transfer such beneficial interest to a
      Person who takes delivery thereof in the form of a Certificated Note only in
      the
      circumstances specified in Section
      2.01(e),
      in
      which event such owner of such beneficial interest shall instruct the Depository
      (or shall cause the appropriate participant to direct the Depository) in
      accordance with the Applicable Procedures to instruct the Trustee to reduce
      the
      aggregate principal amount of the Global Note by the applicable amount of such
      exchange or transfer and to issue in exchange therefore a Certificated Note
      or
      Subordinated Notes in such aggregate amount and registered as provided in such
      instruction; and upon the Trustee’s receipt of such instruction from the
      Depository (or from the applicable Agent Member or beneficial owner pursuant
      to
      the Depository’s proxy procedures), the Trustee to, and the Trustee shall, cause
      the aggregate principal amount of the applicable Global Note to be reduced
      accordingly pursuant to Section
      2.06(g)
      hereof,
      and the Company shall execute and the Trustee shall authenticate and deliver,
      in
      both cases in accordance with Section
      2.02
      hereof,
      to the Person designated in such instruction a Certificated Note in the
      appropriate principal amount. Any Certificated Note issued in exchange for
      a
      beneficial interest pursuant to this Section
      2.06(c)
      shall be
      registered in such name or names and in such authorized denomination or
      denominations as the holder of such beneficial interest shall instruct the
      Registrar through instructions from the Depository and the Agent Member. The
      Trustee shall mail or deliver such Certificated Notes to the Persons in whose
      names such Subordinated Notes are so registered.

     

    (d) Transfer
      and Exchange of Certificated Notes for Beneficial Interests.
      A
      Holder of a Certificated Note may exchange such Subordinated Note for a
      beneficial interest in a Global Note or transfer such Certificated Notes to
      a
      Person who takes delivery thereof in the form of a beneficial interest in a
      Global Note at any time. Upon receipt of a request for such an exchange or
      transfer together with surrender of the Certificated Note to be exchanged or
      transferred, (and, accompanied by a written instrument or instruments of
      transfer as provided in Section
      2.06(e)
      hereof,
      and subject to the Applicable Procedures), the Trustee shall cancel the
      applicable Certificated Note and increase or cause to be increased the aggregate
      principal amount of one of the Global Notes pursuant to Section
      2.06(g)
      hereof.

     

    (e) Transfer
      and Exchange of Certificated Notes for Certificated Notes.
      Upon
      request by a Holder of Certificated Notes and such Holder’s compliance with the
      provisions of this Section
      2.06(e),
      the
      Registrar shall register the transfer or exchange of Certificated Notes. Prior
      to such registration of transfer or exchange, the requesting Holder shall
      present or surrender to the Registrar the Certificated Notes duly endorsed
      or
      accompanied by a written instruction of transfer in form satisfactory to the
      Registrar duly executed by such Holder or by its attorney, duly authorized
      in
      writing. In addition, the requesting Holder must provide any additional
      certifications, documents and information, as applicable, required pursuant
      to
      the Applicable Procedures or reasonably requested by the Company to demonstrate
      compliance by such Holder with applicable law. 

     

    (f) Global
      Note Legend.
      Each
      Global Note shall bear a legend in substantially the following form (the
“Global
      Note Legend”):
      

     

    Subordinate
      Note Indenture
 

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    “THIS
      GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING
      THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
      HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
      THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
      TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
      WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS
      GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
      2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
      SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

     

    UNLESS
      AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM,
      THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
      NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
      OR
      ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE
      TO A
      SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. 

     

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

     

    (g) Cancellation
      and/or Adjustment of Global Notes.
      At such
      time as all beneficial interests in a particular Global Note have been exchanged
      for Certificated Notes or a particular Global Note has been redeemed,
      repurchased or cancelled in whole and not in part, each such Global Note shall
      be returned to or retained and cancelled by the Trustee in accordance with
      Section
      2.11
      hereof.
      At any time prior to such cancellation, if any beneficial interest in a Global
      Note is exchanged for or transferred to a Person who will take delivery thereof
      in the form of a beneficial interest in another Global Note or for Certificated
      Notes, the principal amount of Subordinated Notes represented by such Global
      Note shall be reduced accordingly and an endorsement shall be made on such
      Global Note by the Trustee or by the Depository at the direction of the Trustee
      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 Note, such other Global Note shall be
      increased accordingly and an endorsement shall be made on such Global Note
      by
      the Trustee or by the Depository at the direction of the Trustee to reflect
      such
      increase. 

     

    Subordinate
      Note Indenture

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (h) General
      Provisions Relating to Transfers and Exchanges.
      

     

    (i) To
      permit
      registrations of transfers and exchanges, the Company shall execute Global
      Notes
      and Certificated Notes, and the Trustee shall authenticate Global Notes and
      Certificated Notes upon the Company’s order (including an Authentication Order
      given pursuant to Section
      2.02)
      or at
      the Registrar’s request (in connection with any transfer or exchange of Notes
      pursuant to this Section
      2.06).
      

     

    (ii) No
      service charge shall be made to a Holder of a beneficial interest in a Global
      Note or to a Holder of a Certificated Note for any registration of transfer
      or
      exchange, but the Company may require payment of a sum sufficient to cover
      any
      transfer tax or similar governmental charge payable in connection therewith
      (other than any such transfer taxes or similar governmental charge payable
      upon
      exchange or transfer pursuant to Sections
      2.10,
      3.06,
      3.09,
      3.10,
      and
10.05
      hereof,
      which shall be paid by the Company). 

     

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

     

    (iv) Neither
      the Registrar nor the Company shall be required (A) to issue, to register the
      transfer of or to exchange any Subordinated Notes during a period beginning
      at
      the opening of business 15 days before the day of any selection of Subordinated
      Notes for redemption under Section
      3.02
      hereof
      and ending at the close of business on the day of selection, (B) to register
      the
      transfer of or to exchange any Subordinated Note so selected for redemption
      in
      whole or in part, except the unredeemed portion of any Subordinated Note being
      redeemed in part or (C) to register the transfer of or to exchange a
      Subordinated Note between a record date and the next succeeding Interest Payment
      Date. 

     

    (v) Prior
      to
      due presentment for the registration of a transfer of any Subordinated Note,
      the
      Trustee, any Agent and the Company may deem and treat the Person in whose name
      any Subordinated Note is registered as the absolute owner of such Subordinated
      Note for the purpose of receiving payment of principal of and interest on such
      Subordinated Notes and for all other purposes whatsoever, whether or not such
      Subordinated Note is overdue, and none of the Trustee, any Agent nor the Company
      shall be affected by notice to the contrary. 

     

    (vi) The
      Trustee shall authenticate Global Notes and Certificated Notes in accordance
      with the provisions of Section
      2.02
      hereof.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    (vii) All
      certifications, certificates and Opinions of Counsel required to be submitted
      to
      the Registrar pursuant to this Section
      2.06
      to
      effect a registration of transfer or exchange may be submitted by facsimile.
      

     

    (viii)
      The Trustee is hereby authorized to enter into a letter of representation with
      the Depository in the form provided by the Company and to act in accordance
      with
      such letter. 

     

    (ix) Notwithstanding
      anything contained herein to the contrary, neither the Trustee nor the Registrar
      shall be responsible for ascertaining whether any purchase or transfer complies
      with the registration provisions of or exemptions from the Securities Act or
      other state, federal securities laws that may be applicable; provided,
      however,
      that if
      a certificate is specifically required by the express terms of this Section
      2.06
      to be
      delivered to a Trustee by a purchaser or required by the express terms of this
      Section
      2.06
      to be
      delivered to a Trustee by a purchaser or transferee of a Subordinated Note,
      the
      Trustee shall be under a duty to receive and examine the same to determine
      whether it conforms on its face to the requirements of this Section
      2.06
      and
      shall promptly notify the party delivering the same if such transfer does not
      comply with such terms. 

    

    (x)
      REGISTRATION
      AND TRANSFER OF THE SUBORDINATED NOTES IS SUBJECT TO TRUSTEE’S PRIOR RECEIPT OF
      AN INVESTOR LETTER FROM EACH PROSPECTIVE TRANSFEREE IN SUBSTANTIALLY THE SAME
      FORM OF THAT ATTACHED HERETO AS EXHIBIT G, OR AN OPINION OF SPECIAL COUNSEL
      THAT
      SUCH INVESTOR LETTER IS NO LONGER REQUIRED. 

     

    FURTHERMORE,
      RESALES
      OF THE SUBORDINATED NOTES ARE RESTRICTED AND MAY BE MADE ONLY IN COMPLIANCE
      WITH
      RULE 144A TO THE EXTENT APPLICABLE UNLESS OTHERWISE ALLOWABLE UNDER APPLICABLE
      FEDERAL AND STATE SECURITIES LAWS. PARTICULARLY, RESALES MAY BE MADE ONLY TO
      QUALIFIED INSTITUTIONAL BUYERS AS DEFINED BY RULE 144A UNLESS OTHERWISE
      ALLOWABLE UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS AT THE TIME OF
      SUCH
      RESALE.

     

    Notwithstanding
      anything contained herein to the contrary, the Subordinated Notes and interests
      therein may not be issued, sold or transferred to any Holder other than the
      initial Holder, unless (i) the initial Holder and any subsequent Holder shall
      have delivered to Trustee evidence satisfactory to Trustee that the transferee
      is a Qualified Institutional Buyer, as such term is defined under Rule 144A
      promulgated pursuant to the Securities Act of 1933, as long as such rule is
      applicable, and otherwise in accordance with federal and state securities laws
      applicable at such time, and (ii) Trustee obtained a signed Investor Letter
      in the same form as attached to the Indenture as Exhibit
      G
      and attached to the Notes, or an opinion of Special Counsel that such Investor
      Letter is no longer required. The Subordinated Notes shall bear legends stating
      that they are subject to the transfer restrictions described in this
      Section 2.06 of the Indenture. By purchasing a Note, the initial Holder and
      any subsequent Holder shall be deemed to have agreed to the transfer
      requirements contained in this Section 2.06.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                2.07

            	
              Replacement
                Subordinated
                Notes.

            

    

     

    If
      any
      mutilated Subordinated Note is surrendered to the Trustee, or the Company and
      the Trustee receives evidence to their satisfaction of the destruction, loss
      or
      theft of any Subordinated Note, the Company shall issue and the Trustee, upon
      receipt of an Authentication Order, shall authenticate a replacement
      Subordinated Note if the Trustee’s requirements are met. If required by the
      Trustee or the Company, an indemnity bond must be supplied by the Holder that
      is
      sufficient in the judgment of the Trustee and the Company to protect the
      Company, the Trustee, any Agent and any authenticating agent from any loss
      that
      any of them may suffer if a Subordinated Note is replaced. The Company may
      charge for its expenses in replacing a Subordinated Note.

     

    Every
      replacement Subordinated Note shall be the valid obligation of the Company,
      evidencing the same debt as the destroyed, lost or stolen Subordinated Note,
      and
      shall be entitled to all of the benefits of this Indenture equally and
      proportionately with all other Subordinated Notes duly issued
      hereunder.

     

    
      	
              SECTION
                2.08

            	
              Outstanding
                Subordinated
                Notes.

            

    

     

    (a) The
      Subordinated Notes outstanding at any time shall be the entire principal amount
      of the Subordinated Notes represented by all of the Global Notes and
      Certificated Notes authenticated by the Trustee except for those cancelled
      by
      it, those delivered to it for cancellation and those described in this
Section
      2.08
      as not
      outstanding. Except as set forth in
      Section 2.09
      hereof,
      a Subordinated Note does not cease to be outstanding because the Company or
      an
      Affiliate of the Company holds the Subordinated Note; provided,
      however,
      that
      Subordinated Notes held by the Company or a Subsidiary of the Company shall
      be
      deemed not to be outstanding for purposes of Section
      3.07(b)
      hereof.

     

    (b) If
      a
      Subordinated Note is replaced pursuant to Section
      2.07
      hereof,
      it ceases to be outstanding unless the Trustee receives proof satisfactory
      to it
      that the replaced Subordinated Note is held by a bona fide
      purchaser.

     

    (c) If
      the
      principal amount of any Subordinated Note is considered paid under Section
      4.01
      hereof,
      it ceases to be outstanding and interest on it ceases to accrue.

     

    (d) If
      the
      Paying Agent (other than the Company, a Restricted Subsidiary or an Affiliate
      of
      any thereof) segregates and holds in trust, in accordance with this Indenture,
      on a redemption date or maturity date, funds sufficient to pay all principal
      and
      interest, if any, payable on that date with respect to the Subordinated Notes
      (or the portion thereof to be redeemed or maturing, as the case may be), other
      than pursuant to Article
      11
      hereof,
      then on and after that date, such Subordinated Notes (or portions thereof)
      shall
      be deemed to be no longer outstanding and shall cease to accrue
      interest.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                2.09

            	
              Treasury
                Subordinated
                Notes.

            

    

     

    In
      determining whether the Holders of the required principal amount of Subordinated
      Notes have concurred in any direction, waiver or consent, Subordinated Notes
      owned by the Company, or an Affiliate of the Company, shall be considered as
      though not outstanding, except that for the purposes of determining whether
      the
      Trustee shall be protected in relying on any such direction, waiver or consent,
      only Subordinated Notes that a Trustee knows are so owned shall be so
      disregarded.

     

    
      	
              SECTION
                2.10

            	
              Temporary
                Subordinated
                Notes.

            

    

     

    Until
      definitive Subordinated Notes are ready for delivery, the Company may prepare
      and the Trustee shall authenticate temporary Subordinated Notes. Temporary
      Subordinated Notes shall be substantially in the form of definitive Subordinated
      Notes but may have variations that the Company and the Trustee consider
      appropriate for temporary Subordinated Notes. Without unreasonable delay, the
      Company shall prepare and the Trustee shall authenticate Global Notes or
      definitive Subordinated Notes, as applicable, and deliver them in exchange
      for
      temporary Subordinated Notes.

     

    Holders
      of temporary Subordinated Notes shall be entitled to all of the benefits of
      this
      Indenture.

     

    
      	
              SECTION
                2.11

            	
              Cancellation.

            

    

     

    The
      Company at any time may deliver Subordinated Notes to the Trustee for
      cancellation. The Registrar and Paying Agent shall forward to the Trustee any
      Subordinated Notes surrendered to them for registration of transfer, exchange
      or
      payment. The Trustee and no one else shall cancel all Subordinated Notes
      surrendered for registration of transfer, exchange, payment, replacement or
      cancellation and shall dispose of cancelled Subordinated Notes (subject to
      the
      record retention requirement of the Exchange Act) in accordance with its
      standard disposition procedures in effect at the time, unless the Company
      directs cancelled Subordinated Notes to be returned to it. The Company may
      not
      issue new Subordinated Notes to replace Subordinated Notes that it has redeemed,
      paid or delivered to the Trustee for cancellation.

     

    
      	
              SECTION
                2.12

            	
              Defaulted
                Interest.

            

    

     

    If
      the
      Company defaults in a payment of interest on the Subordinated Notes, it shall
      pay the defaulted interest in any lawful manner plus, to the extent lawful,
      interest payable on the defaulted interest, to the Persons who are Holders
      on a
      subsequent special record date, which date shall be at the earliest practicable
      date but in all events at least five Business Days prior to the payment date,
      in
      each case at the rate provided in the Subordinated Notes and in Section 4.01
      hereof.
      The Company shall fix or cause to be fixed each such special record date and
      payment date, provided that the Company shall fix or cause to be fixed each
      such
      special record date as early as practicable prior to the payment date, and
      the
      Company shall mail or cause to be mailed as early as practicable to each Holder
      a notice that states the special record date, the related payment date and
      the
      amount of defaulted interest to be paid.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                2.13

            	
              Record
                Date.

            

    

     

    The
      record date for purposes of determining the identity of Holders of the
      Subordinated Notes entitled to vote or consent to any action by vote or consent
      authorized or permitted under this Indenture shall be determined as provided
      for
      in TIA § 316(c).

     

    
      	
              SECTION
                2.14

            	
              Ranking;
                Security; Intercreditor
                Agreement.

            

    

     

    (a) The
      Senior Note Obligations shall be senior in right of payment to the Subordinated
      Note Obligations and all other Indebtedness of the Company.

     

    (b) The
      Obligations of the Company under the Senior Notes shall be secured by (i)
      Collateral, (ii) a first priority security interest in the Pledged Revenues,
      (iii) a first priority security interest in the Stock Rights pledged under
      the
      Senior Note Stock Pledge Agreement, (iv) the Mortgage, and (v) a first priority
      security interest in all monies held in the funds and accounts created under
      this Indenture, including the Revenue Fund and the Senior Note Fund (but
      excluding the Costs of Issuance Account).. 

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (c) Concurrently
      with the execution of this Indenture, the Company, the Senior Note Collateral
      Agent and the Trustee shall enter into the Intercreditor Agreement.

     

    (d) The
      Senior Notes Obligations of the Guarantors under the Guarantees provided to
      the
      Collateral Agent for the benefit of the Holders pursuant to Article
      11
      hereof
      shall be senior in right of payment to all other Indebtedness of such
      Guarantors. 

     

    (e) Subject
      to the senior and superior Lien of the Senior Note Documents, the Subordinated
      Notes shall have a subordinated Lien in and on the Collateral. The Company
      covenants and agrees, and each Subordinated Note Holder by its acceptance of
      a
      Subordinated Note likewise covenants and agrees, that all Subordinated Notes
      shall be issued subject to the provisions of this Section 2.14; and each Person
      holding any Subordinated Note, whether upon original issue or upon transfer,
      assignment or exchange thereof, accepts and agrees to be bound by such
      provisions. The payment of any the principal of, premium, if any, and interest
      on all Subordinated Notes issued hereunder shall, to the extent and in the
      manner in this Section 2.14 set forth, be subordinated and subject in right
      of
      payment to the prior payment in full in cash or payment satisfactory to the
      holders of all Senior Notes, whether outstanding at the date of this Indenture
      or thereafter incurred. No provision of this Section 2.14 shall prevent the
      occurrence of any Default or Event of Default hereunder. 

     

    (f) (i)
       No
      payment shall be made with respect to the principal of, premium, if any, and
      interest on the Subordinated Notes except payments and distributions made by
      the
      Trustee as permitted by Section 2.14(i), if:

     

    (A) a
      default
      in the payment of principal, premium, interest, or other obligations due on
      any
      Senior Note Obligations occurs and is continuing (or, in the case of Senior
      Note
      Obligations for which there is a period of grace, in the event of such a default
      that continues beyond the period of grace, if any, specified in the instrument
      or lease evidencing such Senior Note Obligations); or

     

    (B) a
      default, other than a payment default, on any Senior Note Obligations occurs
      and
      is continuing that then permits holders of such Senior Note Obligations to
      accelerate its maturity and the Trustee receives a notice of the default (a
      “Payment
      Blockage Notice”)
      from a
      Representative or holder of such Senior Note Obligations or the
      Company.

     

    (ii) Subject
      to the provisions of Section 2.14(i), if the Trustee receives any Payment
      Blockage Notice pursuant to clause (i)(B) above, no subsequent Payment Blockage
      Notice shall be effective for purposes of this Section unless and until at
      least
      365 days shall have elapsed since the date the Trustee received the immediately
      prior Payment Blockage Notice and all scheduled payments on the Senior Notes
      that have come due have been paid in full in cash. No non-payment default that
      existed or was continuing on the date of delivery of any Payment Blockage Notice
      to the Trustee (unless such default was waived, cured or otherwise ceased to
      exist and thereafter subsequently reoccurred) shall be the basis for a
      subsequent Payment Blockage Notice.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    (iii) The
      Company shall resume payments on and distributions in respect of the
      Subordinated Notes:

     

    (A) in
      the
      case of a default referred to in clause (i)(A) above, the date upon which the
      default is cured or waived or ceases to exist, or

     

    (B) in
      the
      case of a default referred to in clause (i)(B) above, the earlier of the date
      on
      which such default is cured or waived or ceases to exist or 179 days after
      the
      date on which the applicable Payment Blockage Notice is received, if the
      maturity of such Senior Note Obligations has not been accelerated, unless this
      Section 2.14 otherwise prohibits the payment or distribution at the time of
      such
      payment or distribution.

     

    Upon
      any
      payment by the Company, or distribution of assets of the Company of any kind
      or
      character, whether in cash, property or securities, to creditors upon any
      dissolution or winding-up or liquidation or reorganization of the Company
      (whether voluntary or involuntary) or in bankruptcy, insolvency, receivership
      or
      similar proceedings, all amounts due or to become due upon all Senior Notes
      shall first be paid in full in cash, or other payments satisfactory to the
      holders of Senior Notes before any payment is made on account of any payable
      amount, together with accrued and unpaid interest, if any, on the Subordinated
      Notes; and upon any such dissolution or winding-up or liquidation or
      reorganization of the Company or bankruptcy, insolvency, receivership or other
      proceeding, any payment by the Company, or distribution of assets of the Company
      of any kind or character, whether in cash, property or securities, to which
      the
      Holders of the Subordinated Notes or the Trustee would be entitled, except
      for
      the provision of this Section 2.14, shall (except as aforesaid) be paid by
      the
      Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent
      or
      other Person making such payment or distribution, or by the Holders of the
      Subordinated Notes or by the Trustee under this Indenture if received by them
      or
      it, directly to the holders of Senior Notes (pro rata to such holders on the
      basis of the respective amounts of Senior Notes held by such holders, or as
      otherwise required by law or a court order) or their Representative or
      Representatives, or to the trustee or trustees under any indenture pursuant
      to
      which any instrument
      evidencing any Senior Notes may have been issued, as their respective interests
      may appear, to the extent necessary to pay all Senior Notes in full in cash,
      or
      other payment satisfactory to the holders of Senior Notes, after giving effect
      to any concurrent payment or distribution to or for the holders of Senior Notes,
      before any payment or distribution is made to the Holders of the Subordinated
      Notes or to the Trustee.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    For
      purposes of this Section 2.14, the phrase, “cash, property or securities” shall
      not be deemed to include shares of stock of the Company as reorganized or
      readjusted, or securities of the Company or any other corporation provided
      for
      by a plan of reorganization or readjustment, the payment of which is
      subordinated at least to the extent provided in this Section 2.14 with respect
      to the Subordinated Notes to the payment of all Senior Notes which may at the
      time be outstanding; provided that (i) the Senior Notes is assumed by the new
      corporation, if any, resulting from any reorganization or readjustment, and
      (ii)
      the rights of the holders of Senior Notes (other than leases which are not
      assumed by the Company or the new corporation, as the case may be) are not,
      without the consent of such holders, altered by such reorganization or
      readjustment. The consolidation of the Company with, or the merger of the
      Company into, another corporation or the liquidation or dissolution of the
      Company following the conveyance, transfer or lease of its property as an
      entirety, or substantially as an entirety, to another corporation upon the
      terms
      and conditions provided for in Article 6 shall not be deemed a dissolution,
      winding-up, liquidation or reorganization for the purposes of this Section
      2.14
      if such other corporation shall, as a part of such consolidation, merger,
      conveyance, transfer or lease, comply with the conditions stated in Article
      6.

     

    In
      the
      event of the acceleration of the Subordinated Notes because of an Event of
      Default, no payment or distribution shall be made to the Trustee or any Holder
      of Subordinated Notes in respect of any principal of, premium if any, and
      interest on the Subordinated Notes except payments and distributions made by
      the
      Trustee as permitted by Section 2.14(i), until all Senior Notes has been paid
      in
      full in cash or other payment satisfactory to the holders of Senior Notes or
      such acceleration is rescinded in accordance with the terms of this Indenture.
      If payment of the Subordinated Note is accelerated because of an Event of
      Default, the Company shall promptly notify holders of Senior Notes of such
      acceleration.

     

    In
      the
      event that, notwithstanding the foregoing provisions, any payment or
      distribution of assets of the Company of any kind or character, whether in
      cash,
      property or securities (including, without limitation, by way of setoff or
      otherwise), prohibited by the foregoing, shall be received by the Trustee or
      the
      Holders of the Subordinated Notes before all Senior Notes is paid in full,
      in
      cash or other payment satisfactory to the holders of Senior Notes, or provision
      is made for such payment thereof in accordance with its terms in cash or other
      payment satisfactory to the holders of Senior Notes, such payment or
      distribution shall be held in trust for the benefit of and shall be paid over
      or
      delivered to the holders of Senior Notes or their Representative or
      Representatives, or to the trustee or trustees under any indenture pursuant
      to
      which any instrument evidencing any Senior Notes may have been issued, as their
      respective interests may appear, as calculated by the Company, for application
      to the payment of all Senior Notes remaining unpaid to the extent necessary
      to
      pay all Senior Notes in full, in cash or other payment satisfactory to the
      holders of Senior Notes, after giving effect to any concurrent payment or
      distribution to or for the holders of such Senior Notes.

     

    Nothing
      in this Section 2.14 shall apply to claims of, or payments to, the Trustee
      under
      or pursuant to Section 8.07. This Section 2.14(f) shall be subject to the
      further provisions of Section 2.14(i).

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (g) Subject
      to the payment in full, in cash or other payment satisfactory to the holders
      of
      Senior Notes, of all Senior Notes, the rights of the Holders of the Subordinated
      Notes shall be subrogated to the extent of the payments or distributions made
      to
      the holders of such Senior Notes pursuant to the provisions of this Section
      2.14
      (equally and ratably with the holders of all Indebtedness of the Company which
      by its express terms is subordinated to other Indebtedness of the Company to
      substantially the same extent as the Subordinated Notes are subordinated and
      is
      entitled to like rights of subrogation),
      and to
      the rights of the holders of Senior Notes to receive payments or distributions
      of cash, property or securities of the Company applicable to the Senior Notes
      until any payable amount, together with accrued and unpaid interest, if any,
      on
      the Senior Notes shall be paid in full in cash or other payment satisfactory
      to
      the holders of Senior Notes; and, for the purposes of such subrogation, no
      payments or distributions to the holders of the Senior Notes of any cash,
      property or securities to which the Holders of the Subordinated Notes or the
      Trustee would be entitled except for the provisions of this Section 2.14, and
      no
      payment over pursuant to the provisions of this Section 2.14, to or for the
      benefit of the holders of Senior Notes by Holders of the Subordinated Notes
      or
      the Trustee, shall, as between the Company, its creditors other than holders
      of
      Senior Notes, and the Holders of the Subordinated Notes, be deemed to be a
      payment by the Company to or on account of the Subordinated Notes; and no
      payments or distributions of cash, property or securities to or for the benefit
      of the Holders of the Subordinated Notes pursuant to the subrogation provisions
      of this Section 2.14, which would otherwise have been paid to the holders of
      Senior Notes shall be deemed to be a payment by the Company to or for the
      account of the Senior Notes; provided, that nothing herein shall in any way
      affect the payments to be made to the Trustee pursuant to Section 8.07 hereof.
      It is understood that the provisions of this Section 2.14 are and are intended
      solely for the purpose of defining the relative rights of the Holders of the
      Subordinated Notes, on the one hand, and the holders of the Senior Notes, on
      the
      other hand.

     

    Nothing
      contained in this Section 2.14 or elsewhere in this Indenture or in the
      Subordinated Notes is intended to or shall impair, as among the Company, its
      creditors other than the holders of Senior Notes, and the Holders of the
      Subordinated Notes, the obligations of the Company, which is absolute and
      unconditional, to pay to the Holders of the Subordinated Notes the principal
      of,
      premium if any, and interest on the Subordinated Notes as and when the same
      shall become due and payable in accordance with their terms, or is intended
      to
      or shall affect the relative rights of the Holders of the Subordinated Notes
      and
      creditors of the Company other than the holders of the Senior Notes, nor shall
      anything herein or therein prevent the Trustee or the Holder of any Subordinated
      Note from exercising all remedies otherwise permitted by applicable law upon
      default under this Indenture, subject to the rights, if any, under this Section
      2.14 of the holders of Senior Notes in respect of cash, property or securities
      of the Company received upon the exercise of any such remedy.

     

    Upon
      any
      payment or distribution of assets of the Company referred to in this Section
      2.14, the Trustee, subject to the provisions of Section 8.01, and the Holders
      of
      the Subordinated Notes shall be entitled to rely upon any order or decree made
      by any court of competent jurisdiction in which such bankruptcy, dissolution,
      winding-up, liquidation or reorganization proceedings are pending, or a
      certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
      or other Person making such payment or distribution, delivered to the Trustee
      or
      to the Holders of the Subordinated Notes, for the purpose of ascertaining the
      Persons entitled to participate in such distribution, the holders of the Senior
      Notes and other Indebtedness of the Company, the amount thereof or payable
      thereon and all other facts pertinent thereto or to this Section
      2.14.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (h) Each
      Holder of a Subordinated Note by the Holder’s acceptance thereof authorizes and
      directs the Trustee on the Holder’s behalf to take such action as may be
      necessary or appropriate to effectuate the subordination as provided in this
      Section 2.14 and appoints the Trustee to act as the Holder’s attorney-in-fact
      for any and all such purposes. If the Trustee does not file a proper proof
      of
      claim or proof of debt in the form required in any proceeding referred to in
      Section 2.14(g) hereof at least 30 days before the expiration of the time to
      file such claim, the holders of any Senior Notes or their Representatives are
      hereby authorized to file an appropriate claim for and on behalf of the Holders
      of the Subordinated Notes.

     

    (i) The
      Company shall give prompt written notice in the form of an Officer’s Certificate
      to a Trust Officer of the Trustee and to any Paying Agent of any fact known
      to
      the Company that would prohibit the making of any payment of monies to or by
      the
      Trustee or any Paying Agent in respect of the Subordinated Notes pursuant to
      the
      provisions of this Section 2.14. Notwithstanding the provisions of this Section
      2.14 or any other provision of this Indenture, the Trustee shall not be charged
      with knowledge of the existence of any fact that would prohibit the making
      of
      any payment of monies to or by the Trustee in respect of the Subordinated Notes
      pursuant to the provisions of this Section 2.14, unless and until a Trust
      Officer of the Trustee shall have received written notice thereof at the
      Corporate Trust Office from the Company (in the form of an Officer’s
      Certificate) or a Representative or a holder or holders of Senior Notes or
      from
      any trustee thereof; and before the receipt of any such written notice, the
      Trustee shall be entitled in all respects to assume that no such facts exist;
      Notwithstanding anything in this Section 2.14 to the contrary, nothing shall
      prevent any payment by the Trustee to the Holders of monies deposited with
      it
      pursuant to Article 5, and any such payment shall not be subject to the
      provisions of Section 2.14.

     

    The
      Trustee, subject to the provisions of Section 8.01, shall be entitled to
rely
      conclusively on the delivery to it of a written notice by a Representative
      or a
      Person representing himself to be a holder of Senior Notes (or a trustee on
      behalf of such holder) to establish that such notice has been given by a
      Representative or a holder of Senior Notes or a trustee on behalf of any such
      holder or holders. 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 Notes to participate in any payment or distribution pursuant to this
      Section 2.14, the Trustee may request such Person to furnish evidence to the
      reasonable satisfaction of the Trustee as to the amount of Senior Notes 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 Section 2.14, and if such evidence is not furnished the
      Trustee may defer any payment to such Person pending judicial determination
      as
      to the right of such Person to receive such payment.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (j) The
      Trustee in its individual capacity shall be entitled to all the rights set
      forth
      in this Section 2.14 in respect of any Senior Notes at any time held by it,
      to
      the same extent as any other holder of Senior Notes, and nothing in this
      Indenture or elsewhere in this Indenture shall deprive the Trustee of any of
      its
      rights as such holder.

     

    With
      respect to the holders of Senior Notes, the Trustee undertakes to perform or
      to
      observe only such of its covenants and obligations as are specifically set
      forth
      in this Section 2.14, and no implied covenants or obligations with respect
      to
      the holders of Senior Notes shall be read into this Indenture against the
      Trustee. The Trustee shall not be deemed to owe any fiduciary duty to holders
      of
      Senior Notes and, subject to the provisions of Section 8.01, the Trustee shall
      not be liable to any holder of Senior Notes if it shall pay over or deliver
      to
      Holders of Securities, the Company or any other Person money or assets to which
      any holder of Senior Notes shall be entitled by virtue of this Section 2.14
      or
      otherwise.

     

    (k) No
      right
      of any present or future holder of any Senior Notes 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 which any such holder may have or otherwise be charged
      with.

     

    (l) If
      at any
      time any Paying Agent other than the Trustee shall have been appointed by the
      Company and be then acting hereunder, the term “Trustee”
as
      used
      in this Section 2.14 shall (unless the context otherwise requires) be construed
      as extending to and including such Paying Agent within its meaning as fully
      for
      all intents and purposes as if such Paying Agent were named in this Section
      2.14
      in addition to or in place of the Trustee.

     

    (m) The
      holders of Senior Notes (including, without limitation, Senior Note Obligations)
      shall have the right to rely upon this Section 2.14, and no amendment or
      modification of the provisions contained herein shall diminish the rights of
      such holders unless such holders shall have agreed in writing
      thereto.

     

    
      	
              SECTION
                2.15

            	
              CUSIP
                Number.

            

    

     

    The
      Company in issuing the Senior Notes may use a “CUSIP” number or numbers and, if
      it does so, the Trustee shall use the CUSIP number or numbers in notices of
      redemption or exchange as a convenience to Holders; provided, that any such
      notice may state that no representation is made as to the correctness or
      accuracy of the CUSIP number or numbers either as printed on the Senior Notes
      or
      as contained in any notice and that reliance may be placed only on the other
      identification numbers printed on the Senior Notes, and, any redemption shall
      not be affected by any defect in or omission of such numbers. The Company will
      promptly notify the Trustee of any change in the CUSIP number or
      numbers.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      3

     

    REDEMPTION
      AND CERTAIN REPURCHASES

     

    
      	
              SECTION
                3.01

            	
              Notices
                to Trustee.

            

    

     

    If
      the
      Company elects to redeem Subordinated Notes pursuant to the optional redemption
      provisions of Section
      3.07
      hereof,
      it shall furnish to the Trustee, at least 30 days but not more than 60 days
      before a redemption date, an Officers’ Certificate setting forth (i) the clause
      of this Indenture pursuant to which the redemption shall occur, (ii) the
      redemption date, (iii) the record date, (iv) the principal amount of
      Subordinated Notes to be redeemed and (v) the redemption price.

     

    
      	
              SECTION
                3.02

            	
              Selection
                of Subordinated
                Notes for Redemption or Offers to
                Purchase.

            

    

     

    If
      less
      than all of the Subordinated Notes are to be redeemed or to be purchased
      pursuant to any purchase offer required under the Indenture at any time,
      selection of Subordinated Notes for redemption or purchase will be made by
      the
      Trustee in compliance with the requirements of the principal national securities
      exchange, if any, on which the Subordinated Notes are listed, or, if the
      Subordinated Notes are not so listed, on a pro rata basis, by lot or by such
      method as the Trustee shall deem fair and appropriate, provided that no
      Subordinated Notes with a principal amount of US$5,000 or less shall be redeemed
      or purchased in part. A new Subordinated Note in principal amount equal to
      the
      unredeemed or unpurchased portion will be issued in the name of the holder
      thereof upon cancellation of the original Subordinated Note. On and after the
      redemption or purchase date, assuming such Subordinated Notes are redeemed
      or
      purchased as so required, and interest will cease to accrue on the Subordinated
      Notes or portions of them called for redemption or purchase.

     

    The
      Trustee shall promptly notify the Company in writing of the Subordinated Notes
      selected for redemption and, in the case of any Subordinated Note selected
      for
      partial redemption, the principal amount thereof to be redeemed. Subordinated
      Notes and portions of them selected shall be in amounts of US$5,000 or whole
      multiples of US$5,000; except that if all of the Subordinated Notes of a Holder
      are to be redeemed, the entire outstanding principal amount of Subordinated
      Notes held by such Holder, even if not a multiple of US$5,000, shall be
      redeemed. Except as provided in the preceding sentence, provisions of this
      Indenture that apply to Subordinated Notes called for redemption also apply
      to
      portions of Subordinated Notes called for redemption.

     

    
      	
              SECTION
                3.03

            	
              Notice
                of Redemption.

            

    

     

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

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

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

     

    (a) the
      redemption date;

     

    (b) the
      redemption price;

     

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

     

    (d) the
      name
      and address of the paying agent;

     

    (e) that
      Subordinated Notes called for redemption must be surrendered to the paying
      agent
      to collect the redemption price;

     

    (f) that,
      unless the Company defaults in making such redemption payment, interest on
      Subordinated Notes (or portions thereof) called for redemption ceases to accrue
      on and after the redemption date;

     

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

     

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

     

    At
      the
      Company’s request, the Trustee shall give the notice of redemption in the
      Company’s name and at its expense, provided,
      however,
      that
      the Company shall have delivered to the Trustee, at least 45 days prior to
      the
      redemption date, an Officers’ Certificate requesting that the Trustee give such
      notice and setting forth the information to be stated in such notice as provided
      in the preceding paragraph.

     

    
      	
              SECTION
                3.04

            	
              Effect
                of Notice of Redemption.

            

    

     

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

     

    
      	
              SECTION
                3.05

            	
              Deposit
                of Redemption Price.

            

    

     

    At
      least
      one Business Day prior to the redemption date, the Company shall deposit with
      the Trustee or with the Paying Agent (or, if the Company or a Restricted
      Subsidiary is the Paying Agent, shall segregate and hold in trust) immediately
      available funds sufficient to pay the redemption price of and accrued interest,
      if any, on all Subordinated Notes to be redeemed on that date. The Trustee
      or
      the Paying Agent shall promptly return to the Company any funds so deposited
      with the Trustee or the Paying Agent by the Company in excess of the amounts
      necessary to pay the redemption price of, and accrued interest, if any, on,
      all
      Subordinated Notes to be redeemed.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    If
      a
      Subordinated Note is redeemed on or after an interest record date but on or
      prior to the related interest payment date, then any accrued and unpaid interest
      shall be paid to the Person in whose name such Subordinated Note was registered
      at the close of business on such record date. If any Subordinated Note called
      for redemption shall not be so paid upon surrender for redemption because of
      the
      failure of the Company to comply with the preceding paragraph, interest shall
      be
      paid on the unpaid redemption price, from the redemption date until such
      redemption price is paid, and to the extent lawful on any interest not paid
      on
      such unpaid principal, in each case at the rate provided in the Subordinated
      Notes and in Section
      4.01
      hereof.

     

    
      	
              SECTION
                3.06

            	
              Subordinated
                Notes Redeemed in Part.

            

    

     

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

     

    
      	
              SECTION
                3.07

            	
              Optional
                Redemption.

            

    

     

    (a) Except
      as
      set forth in Section
      3.10
      below,
      the Subordinated Notes will not be redeemable at the Company’s option prior to
      February 15, 2008. Thereafter, the Subordinated Notes will be subject to
      redemption at the option of the Company, in whole or in part, upon not less
      than
      30 nor more than 60 days’ notice to the Holders, at 100% of the principal amount
      plus accrued and unpaid interest thereon to the applicable redemption
      date.

     

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

     

    
      	
              SECTION
                3.08

            	
              Mandatory
                Redemption.

            

    

     

    The
      Company shall not be required to make mandatory redemption or sinking fund
      payments with respect to the Subordinated Notes, except as required pursuant
      to
Sections
      3.09
      and
3.10.

     

    
      	
              SECTION
                3.09

            	
              Offer
                to Purchase with Excess revenue;
                Mandatory Redemption from Excess
                Revenue.

            

    

     

    (a) The
      Trustee shall establish and maintain within the Revenue Fund (as described
      in
      Sections 5.01 and 5.02) the Excess Revenue Account. The Excess Revenue Account
      shall be established and maintained so as to create, perfect and establish
      the
      priority of the security interest of the Trustee in such account and all cash,
      Permitted Investments and other property from time to time deposited therein
      and
      otherwise to effectuate the lien of the Subordinated Notes.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    (b) The
      Trustee shall have sole dominion and control over the Excess Revenue Account
      (including, inter alia, the sole power to direct withdrawals or transfers from
      the Excess Revenue Account and to direct the investment and reinvestment of
      funds in the Excess Revenue Account, subject to the provisions of this
Section 3.09).
      The
      Trustee shall make withdrawals and transfers from the Excess Revenue Account
      in
      accordance with the terms of this Indenture. The Company and the Trustee
      acknowledge that the Excess Revenue Account is a “deposit account” or
“investment property” within the meaning of Section 9-102 of the UCC and that
      the Trustee has “control,” for purposes of Section 9-315 of the UCC, of the
      Excess Revenue Account.

     

    (c) The
      Trustee shall establish and maintain the Excess Revenue Account on the date
      of
      this Indenture, and the Excess Revenue Account shall bear a designation clearly
      indicating that the funds deposited therein are held for the benefit of the
      Subordinated Note holders. Except as expressly provided herein, all Excess
      Revenue attributable to the Subordiante Notes shall be deposited in the Excess
      Revenue Account and transferred therefrom in accordance with the terms of this
      Indenture. No funds shall be deposited in the Excess Revenue Account that do
      not
      constitute Excess Revenue except as expressly provided in this Indenture without
      the prior written consent of the Trustee.

     

    (d) Excess
      Revenue shall be transferred to the Excess Revenue Account as set forth in
      Sections 5.01 and 5.02 below.

     

    (e) The
      Subordinated Notes are subject to mandatory redemption upon any Interest Payment
      Date, as a whole or in part at the principal amount thereof, plus accrued
      interest thereon to the date of redemption, but without premium, from Excess
      Revenues (the “Excess
      Revenue Offer”).

     

    (f) The
      Excess Revenue Offer shall remain open for a period of 20 Business Days
      following its commencement and no longer, except to the extent that a longer
      period is required by applicable law (the “Offer
      Period”).
      No
      later than five Business Days after the termination of the Offer Period (the
      “Purchase
      Date”),
      the
      Company shall purchase the maximum principal amount of Subordinated Notes that
      may be purchased with such Excess Revenue (or such pro
      rata
      portion
      based upon the principal amount of the Subordinated Notes tendered, if the
      principal amount of Subordinated Notes tendered is in excess of the Excess
      Revenue) (which maximum principal amount of Subordinated Notes shall be the
      “Offer
      Amount”)
      or, if
      less than the Offer Amount has been tendered, all Subordinated Notes tendered
      in
      response to the Excess Revenue Offer. 

     

    (g) If
      the
      Purchase Date is on or after an interest record date and on or before the
      related interest payment date, any accrued interest on the Subordinated Notes
      shall be paid to the Person in whose name a Subordinated Note is registered
      at
      the close of business on such record date, and no additional interest shall
      be
      payable to Holders who tender Subordinated Notes pursuant to the Excess Revenue
      Offer on the portion of the tendered Subordinated Notes purchased pursuant
      to
      the Excess Revenue Offer.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

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

     

    (i) that
      the
      Excess Revenue Offer is being made pursuant to Section
      3.09
      hereof
      and the length of time the Excess Revenue Offer shall remain open;

     

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

     

    (iii) that
      any
      Subordinated Note or portion thereof not tendered or accepted for payment shall
      continue to accrue interest;

     

    (iv) that
      Holders electing to have a Subordinated Note or portion thereof purchased
      pursuant to any Excess Revenue Offer shall be required to surrender the
      Subordinated Note, with the form entitled “Option of Holder to Elect Purchase”
on the reverse of the Subordinated Note completed, to the Company, a Depository,
      if appointed by the Company, or a Paying Agent at the address specified in
      the
      notice at least three Business Days before the Purchase Date;

     

    (v) that
      Holders shall be entitled to withdraw their election if the Company, Depository
      or Paying Agent, as the case may be, receives, not later than the expiration
      of
      the Offer Period, written communication setting forth the name of the Holder,
      the principal amount of the Subordinated Note or portion thereof the Holder
      delivered for purchase and a statement that such Holder is withdrawing his
      election to have the Subordinated Note or portion thereof
      purchased;

     

    (vi) that,
      if
      the aggregate principal amount of Subordinated Notes tendered by holders of
      such
      Subordinated Notes exceeds the Offer Amount, the Trustee shall select the
      Subordinated Notes to be purchased on a pro
      rata
      basis as
      described above (with such adjustments as may be deemed appropriate by the
      Trustee so that only Subordinated Notes in denominations of US$5,000, or
      integral multiples thereof, shall be purchased); and

     

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

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    (i) On
      the
      Purchase Date, the Company shall, to the extent lawful, accept for payment,
      on a
pro
      rata
      basis
      (as described above) to the extent necessary, the Offer Amount of Subordinated
      Notes or portions thereof tendered pursuant to the Excess Revenue Offer, or
      if
      less than the Offer Amount has been tendered, all Subordinated Notes or portions
      thereof tendered, and deliver to the Trustee an Officers’ Certificate stating
      that such Subordinated Notes or portions thereof were accepted for payment
      by
      the Company in accordance with the terms of this Section
      3.09.
      The
      Company or Paying Agent, as the case may be, shall promptly (but in any case
      not
      later than five days after the Purchase Date) mail or deliver to each tendering
      Holder an amount equal to the purchase price of the Subordinated Note or portion
      thereof tendered by such Holder and accepted by the Company for purchase, and
      the Company shall promptly issue a new Subordinated Note, and the Trustee shall
      authenticate and mail or deliver such new Subordinated Note to such Holder
      equal
      in principal amount to any unpurchased portion of the Subordinated Note
      surrendered. Any Subordinated Note not so accepted shall be promptly mailed
      or
      delivered by the Company to the Holder thereof. The Company shall publicly
      announce the results of the Excess Revenue Offer on the Purchase Date. In the
      event that the aggregate amount of Excess Revenue Proceeds exceeds the aggregate
      principal amount of Subordinated Notes or portion thereof surrendered by Holders
      of such Subordinated Notes pursuant to an Excess Revenue Offer, the Company
      may
      use the remaining Excess Revenue for general purposes. Upon completion of an
      Excess Revenue Offer, the amount of the Excess Revenue shall be deemed to be
      reset at zero.

     

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

     

    
      	
              SECTION
                3.10

            	
              Redemption
                at the Option of Holders Upon A Change of
                Control.

            

    

     

    (a) If
      a
      Change of Control occurs, the Company shall make an offer (the “Change
      of Control Offer”)
      to
      each of the Holders of Subordinated Notes to repurchase all or any part (equal
      to $5,000 or an integral multiple of $5,000) of that Holder’s Subordinated Notes
      pursuant to the Change of Control Offer at a purchase price, in cash, equal
      to
      100% of the aggregate principal amount of Subordinated Notes repurchased, plus
      accrued and unpaid interest on the Subordinated Notes repurchased, to the
      Purchase Date (the “Change
      of Control Payment”)
      (subject to the right of Holders of record on the relevant Regular Record Date
      to receive interest due on the relevant Interest Payment Date).

     

    (b) Within
      30
      days following any Change of Control, the Company shall mail a notice of such
      Change of Control Offer by first class mail, postage prepaid, to each Holder
      describing the transaction or transactions that constitute the Change of Control
      and stating: 

     

    (i) that
      the
      Change of Control Offer is being made pursuant to this Section
      3.10
      and that
      all Subordinated Notes tendered shall be accepted for payment; 

     

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

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    (iii) that
      any
      Subordinated Note not tendered shall remain outstanding and continue to accrue
      interest; 

     

    (iv) that,
      unless the Company defaults in the payment of the Change of Control Payment,
      all
      Subordinated Notes accepted for payment pursuant to the Change of Control Offer
      shall cease to accrue interest after the Change of Control Payment Date;

     

    (v) that
      Holders electing to have any Subordinated Notes purchased pursuant to a Change
      of Control Offer shall be required to surrender the Subordinated Notes, with
      the
      form entitled “Option of Holder to Elect Purchase” on the reverse of the
      Subordinated Notes completed, to the Paying Agent at the address specified
      in
      the notice prior to the close of business on the third Business Day preceding
      the Change of Control Payment Date; 

     

    (vi) that
      Holders shall be entitled to withdraw their election if the Paying Agent
      receives, not later than the close of business on the second Business Day
      preceding the Change of Control Payment Date, a written communication setting
      forth the name of the Holder, the principal amount of Subordinated Notes
      delivered for purchase, and a statement that such Holder is withdrawing his
      election to have such Subordinated Notes purchased; and 

     

    (vii) that
      Holders whose Subordinated Notes are being purchased only in part shall be
      issued new Subordinated Notes equal in principal amount to the unpurchased
      portion of the Subordinated Notes surrendered. 

     

    (c) So
      long
      as the Subordinated Notes are in global form, if the Company makes an offer
      to
      purchase all of the Subordinated Notes pursuant to a Change of Control Offer,
      a
      Holder may exercise its option to elect for the purchase of Subordinated Notes
      through the facilities of the Depository, subject to its rules and regulations.
      

     

    (d) On
      the
      Change of Control Payment Date, the Company shall, to the extent lawful:

     

    (i) accept
      for payment all Subordinated Notes or portions thereof properly tendered
      pursuant to the Change of Control Offer; 

     

    (ii) prior
      to
      11:00 a.m. (New York City time) on such date, deposit with the Paying Agent
      an
      amount equal to the Change of Control Payment in respect of all Subordinated
      Notes or portions of Subordinated Notes properly tendered; and 

     

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

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    (e) The
      Paying Agent shall promptly mail to each Holder of Subordinated Notes properly
      tendered the Change of Control Payment for such Subordinated Notes, and the
      Trustee shall promptly authenticate and mail (or cause to be transferred by
      book
      entry) to each Holder a new Subordinated Note equal in principal amount to
      any
      unpurchased portion of the Subordinated Notes surrendered, if any. The Company
      shall publicly announce the results of the Change of Control Offer on or as
      soon
      as practicable after the Change of Control Payment Date. 

     

    (f) Notwithstanding
      anything to the contrary in this Section
      3.10,
      the
      Company shall 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
      3.10
      and
      purchases all Subordinated Notes validly tendered and not withdrawn under the
      Change of Control Offer. A Change of Control Offer may be made in advance of
      a
      Change of Control, conditional upon such Change of Control, if a definitive
      agreement is in place for the Change of Control at the time of making the Change
      of Control Offer. 

     

    
      	
              SECTION
                3.11

            	
              Compliance
                with the Exchange Act.

            

    

     

    The
      Company shall comply with the requirements of Rule 14e-1 under the Exchange
      Act
      and any other securities laws and regulations thereunder to the extent such
      laws
      or regulations are applicable in connection with any redemption pursuant to
      Sections
      3.07,
      3.09,
      and
3.10.
      To the
      extent that the provisions of any securities laws or regulations conflict with
      the provisions of the Indenture, the Company shall comply with the applicable
      securities laws and regulations and shall not be deemed to have breached its
      obligations described in the Indenture by virtue thereof.

     

    ARTICLE
      4

     

    COVENANTS

     

    
      	
              SECTION
                4.01

            	
              Payment
                of Subordinated
                Notes.

            

    

     

    The
      Company shall pay or cause to be paid the principal of, premium, if any, and
      interest on the Subordinated Notes at the Interest Rate on the dates and in
      the
      manner provided in the Subordinated Notes and this Indenture. Principal,
      premium, if any, and interest shall be considered paid on the date due if the
      Paying Agent, if other than the Company, holds as of the due date money
      deposited by, or on behalf of, the Company in immediately available funds and
      designated for and sufficient to pay all principal, premium, if any, and
      interest then due.

     

    The
      Company shall pay interest (including post-petition interest in any proceeding
      under any Bankruptcy Law) on overdue principal at the rate equal to 1% (one
      percent) in excess of the otherwise applicable Interest Rate on the Subordinated
      Notes to the extent lawful until such overdue principal is paid; it shall pay
      interest (including post-petition interest in any proceeding under any
      Bankruptcy Law) on overdue installments of interest (without regard to any
      applicable grace period) at the same rate to the extent lawful until such
      overdue installments of interest are paid.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                4.02

            	
              Use
                of Proceeds.

            

    

     

    The
      Company shall use the proceeds from the sale of the Subordinated Notes solely
      to
      (i) purchase Oil Rig Related Assets or to retire certain outstanding loans
      and
      indebtedness of the Company previously incurred to acquire and construct the
      Oil
      Rig Related Assets and to fund other operations of the Company (ii) paying
      the
      costs of retiring and redeeming certain of the Company’s outstanding convertible
      debentures, (iii) providing working capital to the Company and (iv) paying
      the
      costs of issuance. Within ten (10) Business Days after the Issue Date, the
      Company shall deliver to the Trustee a certificate of the use of proceeds in
      substantially the form of Exhibit
      F
      hereto,
      which shall be signed by the Company’s Chief Executive Officer and Chief
      Financial Officer. 

     

    
      	
              SECTION
                4.03

            	
              Further
                Assurances.

            

    

     

    (a) The
      Company shall, and shall cause each of the Subsidiary Guarantors to, execute
      and
      deliver such additional instruments, certificates or documents, and take such
      actions as may be reasonably required from time to time in order to:

     

    (i) carry
      out
      more effectively the purposes of Section
      2.14
      and the
      Collateral Documents; 

     

    (ii) create,
      grant, perfect and maintain the validity, effectiveness and priority of any
      of
      the Collateral Documents and the Liens created, or intended to be created,
      by
      the Collateral Documents; and 

     

    (iii) ensure
      the protection and enforcement of any of the rights granted or intended to
      be
      granted to the Trustee or the Collateral Agent under any other instrument
      executed in connection therewith. 

     

    (b) Upon
      the
      exercise by the Trustee, the Collateral Agent or any Holder of any power, right,
      privilege or remedy under this Indenture or any of the Subordinated Note
      Collateral Documents which requires any consent, approval, recording,
      qualification or authorization of any governmental authority, the Company shall,
      and shall cause each of the Subsidiary Guarantors to, execute and deliver all
      applications, certifications, instruments and other documents and papers that
      may be required of the Company or any of the Subsidiary Guarantors for such
      governmental consent, approval, recording, qualification or authorization.
      

     

    
      	
              SECTION
                4.04

            	
              Maintenance
                of Office or Agency.

            

    

     

    The
      Company shall give prompt written notice to the Trustee of the location, and
      any
      change in the location of the office or agency required to be maintained
      pursuant to Section
      2.03 hereof.
      If at any time the Company shall fail to maintain any such required office
      or
      agency or shall fail to furnish the Trustee with the address thereof, such
      presentations, surrenders, notices and demands may be made or served at the
      Corporate Trust Office of the Trustee.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    The
      Company also may from time to time designate one or more other offices or
      agencies where the Subordinated Notes may be presented or surrendered for any
      or
      all such purposes and may from time to time rescind such designations;
provided,
      however,
      that no
      such designation or rescission shall in any manner relieve the Company of its
      obligation to maintain an office or agency for such purposes. The Company shall
      give prompt written notice to the Trustee of any such designation or rescission
      and of any change in the location of any such other office or
      agency.

     

    
      	
              SECTION
                4.05

            	
              Reports.

            

    

     

    (a) So
      long
      as any of the Subordinated Notes remain outstanding, the Company shall furnish
      to the Holders of Subordinated Notes:

     

    (i) unless
      otherwise required to be filed with the Commission under cover of an appropriate
      form in which event furnishment is not required, all quarterly (not later than
      60 days after the end of each fiscal quarter) and annual (not later than 120
      days after the end of the fiscal year) consolidated financial information that
      would be required to be contained in a filing with the Commission on Forms
      10-QSB and 10-KSB, respectively, under the Exchange Act if the Company were
      required to file such forms (provided that the information that is required
      by
      Form 10-KSB will be provided within 120 days of the Company’s fiscal year end),
      including a “Management’s Discussion and Analysis of Financial Condition and
      Results of Operations” that describes the financial condition and results of
      operations of the Company and its Restricted Subsidiaries, a Receivable aging
      report and, with respect to the annual information only, a report thereon by
      the
      Company’s independent certified public accountants; and

     

    (ii) unless
      otherwise required to be filed with the Commission in which event furnishment
      is
      not a requirement, all information that would be required to be filed with
      the
      Commission on Form 8-K under the Exchange Act if the Company were required
      to
      file such reports (clauses (i) and (ii) hereof shall collectively be referred
      to
      as the “Financial
      Reports”).
      

     

    (b) The
      Company shall provide the Trustee with a sufficient number of copies of all
      Financial Reports that the Trustee may be required to deliver to the Holders
      of
      the Subordinated Notes under this Section
      4.05.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                4.06

            	
              Compliance
                Certificate.

            

    

     

    (a) The
      Company shall deliver to the Trustee, within 180 days after the end of each
      fiscal year of the Company, an Officers’ Certificate substantially in the form
      of Exhibit
      D
      hereto
      stating that (i) a review of the activities of the Company and its Restricted
      Subsidiaries during the preceding fiscal year has been made under the
      supervision of the signing Officers with a view to determining whether the
      Company has (x) kept, observed, performed and fulfilled, and (y) caused each
      of
      its Restricted Subsidiaries to keep, observe, perform and fulfill, its
      obligations under this Indenture, and (ii) as to each such Officer signing
      such
      certificate, that to the best of his or her knowledge (A) the Company has kept,
      observed, performed and fulfilled, and has caused each of its Restricted
      Subsidiaries to keep, observe, perform and fulfill, each and every covenant
      contained in this Indenture and is not in default in the performance or
      observance of any of the terms, provisions and conditions of this Indenture
      to
      be performed or observed by it (or, if a Default or Event of Default shall
      have
      occurred and remains in existence, describing all such defaults or Events of
      Default of which he or she may have knowledge and what action each is taking
      or
      proposes to take with respect thereto) and (B) no event has occurred and
      remains in existence by reason of which payments on account of the principal
      of
      or interest, if any, on the Subordinated Notes is prohibited or if such event
      has occurred, a description of the event and what action each is taking or
      proposes to take with respect thereto.

     

    (b) Concurrently
      with the delivery of the year-end Financial Reports pursuant to Section
      4.05
      above,
      the Company shall, so long as any of the Subordinated Notes are outstanding,
      deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
      or Event of Default that has occurred and remains in existence, an Officers’
Certificate specifying such Default or Event of Default and what action the
      Company is taking or proposes to take with respect thereto.

     

    
      	
              SECTION
                4.07

            	
              Taxes.

            

    

     

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

     

    
      	
              SECTION
                4.08

            	
              Stay,
                Extension and Usury Laws.

            

    

     

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

     

    
      	
              SECTION
                4.09

            	
              Expansion
                Debt and additional
                obligations.

            

    

     

    (a) Notwithstanding
      anything herein to the contrary, the Company shall not issue or incur any
      Additional Obligations except as permitted pursuant to this Indenture. The
      Company may from time to time issue or incur Expansion Debt and Additional
      Obligations for the purpose of acquiring or constructing Expansion Assets and
      for working capital purposes, pursuant to the following terms and
      conditions:

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    (i) Renewals
      or extensions of existing indebtedness outstanding as of the Issue
      Date;

     

    (ii) Establishment
      or incurrence of the Working Capital Credit Facility for working capital
      purposes not to exceed US $1.0 million that is subordinated to the Senior Notes
      or establishment of a credit facility used to purchase a rig that is not an
      Oil
      Rig Related Asset which credit facility is secured solely by such
      rig;

     

    (iii) Expansion
      Debt may be issued as additional notes under the Indenture pursuant to a
      supplemental indenture or may be otherwise incurred by the Company provided
      that
      in either event such Expansion Debt shall be secured solely by (i) a Lien on
      the
      Expansion Assets acquired or constructed with the proceeds of such Expansion
      Debt (subject to Section 12.03(e), and/or (ii) a Lien on the Revenues produced
      by or derived from such Expansion Assets; 

     

    (iv) At
      the time any Expansion Debt is issued or incurred, no Event of Default and
      no
      event that with the passage of time or the giving of notice or both would
      constitute an Event of Default hereunder shall have occurred or be
      continuing. 

     

    
      	
              SECTION
                4.10

            	
              Restricted
                Payments.

            

    

     

    (a) The
      Company shall not, and shall not permit any of its Restricted Subsidiaries
      to,
      directly or indirectly make any Restricted Payment, unless, at the time of
      such
      Restricted Payment no Default or Event of Default has occurred and is continuing
      or would occur as a consequence thereof.

     

    (b) The
      Board
      of Directors may designate any Restricted Subsidiary to be an Unrestricted
      Subsidiary if such designation would not cause a Default or Event of Default
      pursuant to Article 7
      hereof.
      All such outstanding Investments will be deemed to constitute Investments in
      an
      amount equal to the greatest of (x) the net book value of such Investments
      at
      the time of such designation, (y) the Fair Market Value of such Investments
      at
      the time of such designation and (z) the original Fair Market Value of such
      Investments at the time they were made. Such designation will only be permitted
      if such Restricted Payment would be permitted at such time.

     

    (c) The
      Board
      of Directors may at any time designate any Unrestricted Subsidiary to be a
      Restricted Subsidiary; provided
      that
      such designation shall be deemed to be an incurrence of Indebtedness by a
      Restricted Subsidiary of the Company of any outstanding Indebtedness of such
      Unrestricted Subsidiary and such designation shall only be permitted if (i)
      such
      indebtedness is permitted under Section
      4.12
      hereof,
      (ii) no Default or Event of Default pursuant to Article
      7
      hereof
      would be in existence following such designation and (iii) such Restricted
      Subsidiary becomes a Guarantor immediately upon such designation.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    (d) Any
      designation of the Board of Directors pursuant to Sections
      4.10(b)
      and
4.10(c)
      shall be
      notified by the Company to the Trustee by promptly filing with the Trustee
      a
      copy of the Board Resolution giving effect to such designation and delivering
      the Officers’ Certificate described below in Section
      4.10(e).

     

    (e) Not
      later
      than the date of making any Restricted Payment, the Company shall deliver to
      the
      Trustee an Officers’ Certificate stating that such Restricted Payment is
      permitted.

     

    
      	
              SECTION
                4.11

            	
              Dividend
                and Other Payment Restrictions Affecting Restricted
                Subsidiaries.

            

    

     

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

     

    (a) pay
      dividends or make any other distributions to the Company or any of its
      Restricted Subsidiaries on its Capital Stock or with respect to any other
      interest or participation in, or measured by, its profits, or pay any
      Indebtedness owed to the Company or any of its Restricted
      Subsidiaries;

     

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

    

    (c) transfer
      any of its properties or assets to the Company or any of its Restricted
      Subsidiaries, except for such encumbrances or restrictions existing as of the
      Issue Date or under or by reason of:

     

    (i) applicable
      law;

     

    (ii) any
      instrument governing any obligation relating to a business acquired by the
      Company (“Acquired
      Debt”)
      as in
      effect at the time of acquisition (except to the extent such Indebtedness was
      incurred in connection with, or in contemplation of, such acquisition), which
      encumbrance or restriction is not applicable to any Person, or the properties
      or
      assets of any Person, other than the Person, or the property or assets of the
      Person, so acquired;

     

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

     

    (iv) purchase
      money obligations for property acquired in the ordinary course of business
      or
      performance bonds or similar security for performance which Liens securing
      such
      obligations do not cover any asset other than the asset acquired or, in the
      case
      of performance bonds or similar security for performance, the assets associated
      with the Company’s performance;

     

    (v) this
      Indenture and the Senior Notes;

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    (vi) the
      Subordinated Note Documents; or

     

    (vii) in
      the
      case of clauses (ii), (v), and (vi) above, any amendments, modifications,
      restatements, renewals, increases, supplements, refundings, replacements or
      refinancings thereof; provided,
      that
      such amendments, modifications, restatements, renewals, increases, supplements,
      refundings, replacements or refinancings are not materially more restrictive
      with respect to such divided and other payment restrictions than those contained
      in such instruments as in effect on the date of their incurrence or, if later,
      the Issue Date.

     

    
      	
              SECTION
                4.12

            	
              Asset
                Sales

            

    

     

    (a) If
      the
      Company proposes to sell any asset that constitutes Collateral;

     

    (i) such
      sale
      shall be for not less than the Collateral Value of such asset; 

     

    (ii) all
      Net
      Proceeds shall be used to repay the outstanding Senior Notes first and then
      the
      Subordinated Notes as if such proceeds were Excess Revenue;

     

    (iii) the
      Company shall make an Excess Revenue Offer in accordance with the procedures
      set
      forth in Section
      3.09
      of the
      Indenture utilizing such Net Proceeds. 

     

    (b) Pending
      the final application of any Net Proceeds pursuant to this Section
      4.12,
      the
      Company or the applicable Restricted Subsidiary shall deposit all such Net
      Proceeds in the Excess Revenue Account and shall invest such Net Proceeds in
      Permitted Investments. 

     

    
      	
              SECTION
                4.13

            	
              Transactions
                with Affiliates.

            

    

     

    The
      Company shall not, and shall not permit any of its Restricted Subsidiaries
      to,
      in one or more related transactions, sell, lease, transfer or otherwise dispose
      of any of their properties or assets to, or purchase any property or assets
      from, or enter into or make any contract, agreement, understanding, loan,
      advance or Guarantee with, or for the benefit of, any Affiliate (each of the
      foregoing, an “Affiliate
      Transaction”),
      unless:

     

    (a) such
      Affiliate Transaction is on terms that are no less favorable to the Company
      or
      such Restricted Subsidiary than those that would have been obtained in a
      comparable transaction by the Company or such Restricted Subsidiary with an
      unrelated Person; 

     

    (b) the
      Company delivers to the Trustee:

     

    (i) with
      respect to any Affiliate Transaction involving aggregate consideration in excess
      of US$1.0 million, an Officers’ Certificate certifying that such Affiliate
      Transaction complies with clause (a) above and has been approved by a majority
      of disinterested members of the Board of Directors; and

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    (ii) with
      respect to any Affiliate Transaction involving aggregate consideration in excess
      of US$5.0 million, a written opinion as to the fairness of such Affiliate
      Transaction to the Company or Restricted Subsidiary involved in such Affiliate
      Transaction from a financial point of view issued by an
      internationally-recognized investment banking firm; and

     

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

     

    (A) transactions
      pursuant to any employment, consulting, stock option or stock purchase agreement
      entered into by the Company or any of its Restricted Subsidiaries, or any grant
      of stock, in the ordinary course of business that are approved by the Board
      of
      Directors;

     

    (B) transactions
      pursuant to existing Indebtedness owed to officers and directors of the Company
      as of the Issue Date;

     

    (C) transactions
      permitted by the provisions of the Indenture described above in Sections
      4.09 and 4.10;
      

     

    (D) Permitted
      Investments; and

     

    (E) transactions
      with Enhanced Oil Resources, Inc. and/or Oil Sands Quest.

     

    
      	
              SECTION
                4.14

            	
              Liens.

            

    

     

    Neither
      the Company nor any of its Restricted Subsidiaries may, directly or indirectly,
      create, incur, assume or suffer to exist any Lien on any asset now owned or
      hereafter acquired, or on any income or profits therefrom or assign or convey
      any right to receive income therefrom, except for Permitted Liens. 

     

    
      	
              SECTION
                4.15

            	
              Corporate
                Existence.

            

    

     

    Subject
      to Article
      6
      hereof,
      the Company shall do or cause to be done all things necessary to preserve and
      keep in full force and effect (i) its existence as a corporation, and the
      corporate, partnership or other existence of any Restricted Subsidiary, in
      accordance with the respective organizational documents (as the same may be
      amended from time to time) of the Company or any such Restricted Subsidiary
      and
      (ii) the rights (charter and statutory), licenses and franchises of the Company
      and its Restricted Subsidiaries; provided,
      however,
      that the
      Company shall not be required to preserve any such right, license or franchise,
      or the corporate, partnership or other existence of any of its Restricted
      Subsidiaries if the Board of Directors shall determine that the preservation
      thereof is no longer desirable in the conduct of the business of the Company
      and
      its Restricted Subsidiaries, taken as a whole, and that the loss thereof is
      not
      adverse in any material respect to the Holders of the Senior Notes.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                4.16

            	
              Business
                Activities.

            

    

     

    The
      Company shall not, and shall not permit any of its Restricted Subsidiaries
      to,
      directly or indirectly, engage in any business other than the Oil Rig
      Business.

     

    ARTICLE
      5

     

    FUNDS
      AND
      DEPOSITS

     

    
      	
              SECTION
                5.01

            	
              Revenue
                Fund; Distributions from the Revenue
                Fund.

            

    

     

    There
      is
      hereby created and ordered established with Trustee, a special fund, whether
      currently existing or hereafter created, in the name of the Company, designated
      “Forster Drilling Corporation Revenue Fund” (the “Revenue Fund”). All Pledged
      Revenues shall, as and when received by the Trustee from the Senior Notes
      Trustee pursuant to the distributions to be made by the Senior Notes Trustee
      pursuant to Section 5.01(b) of the Senior Notes Indenture, be deposited into
      the
      Revenue Fund. All monies at any time in the Revenue Fund shall be applied for
      the payment of the annual fees of Trustee and Payment Agent, Annual Debt Service
      on the Subordinated Notes or any additional Notes and distribution of the
      surplus, in the following order, at the following times and in the amounts
      set
      forth below:

     

    (a) FIRST,
      to the
      Subordinated Note Fund for payment on the Subordinated Notes, the amounts at
      the
      times for the purposes set forth in Section 5.02 below;

     

    (b) SECOND,
      no
      later than five (5) business days prior to the commencement of each Offer Period
      described in Section 3.09, the balance of the Revenue Fund after making all
      disbursements and providing for all funds described above (the “Excess
      Revenues”), shall be transferred to the Excess Revenue Account of the
      Subordinated Note Fund for redemption of the Subordinated Notes pursuant to
      Section
      3.09
      above.

     

    It
      is
      agreed that Trustee shall have and the Company does hereby grant to Trustee
      a
      first priority lien on the Revenue Fund. 

     

    
      	
              SECTION
                5.02

            	
              Subordinated
                Note Fund.

            

    

     

    There
      is
      hereby created and ordered established with Trustee a special fund, in the
      name
      of the Company, to be designated “Forster Drilling Corporation Subordinated Note
      Fund” (the “Subordinated Note Fund”). 

     

    It
      shall
      be the unconditional obligation of the Company to make payments into the
      Subordinated Note Fund as follows unless sufficient funds exist as a result
      of
      the Revenue Fund:

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    (a) For
      Payment of Trustee Fees: On
      or
      before the fifth (5th) calendar
      day of each month, there shall be paid into the Subordinated Note Fund,
      beginning on the fifth (5th) calendar day of February 2008 (pro-rated
      accordingly for the first payment due April 15, 2008), and continuing on the
      fifth (5th) calendar day of each month thereafter, until all Outstanding
      Subordinated Notes with interest and premium, if any, thereon have been paid
      in
      full, or provision made for such payment, a sum (to be computed by Trustee)
      equal to one-twelfth (1/12) of Trustee’s and Paying Agent’s annual fees for the
      Senior Notes. The payment of interest on the Subordinated Notes shall be subject
      in all respects to the Trustees receipt of monies therefore from the Senior
      Note
      Trustee as set forth in Section 5.01 above; provided, however, it shall be
      an
      unconditional obligation of the Company to the pay the principal of, premium,
      if
      any and interest on the Subordinated Notes upon Maturity. All monies in the
      Subordinated Note Fund shall be used solely for the purpose of paying Annual
      Debt Service on the Subordinated Notes or for any redemption of the Subordinated
      Notes, plus Trustee’s and Paying Agent’s fees, except as herein specifically
      provided. Trustee shall withdraw from the Subordinated Note Fund, on the date
      of
      any principal or interest payment, an amount equal to the amount of such payment
      for the sole purpose of paying the same plus Trustee’s and Paying Agent’s fees,
      which direction Trustee hereby accepts. 

     

    (b) For
      Payment of any Deficiency: On
      or
      before the fifth (5th) calendar
      day of the month preceding each Maturity Date, there shall be paid by the
      Company into the Subordinated Note Fund until all outstanding Subordinated
      Notes
      with interest thereon have been paid in full, or provision made for such
      payment, a sum (to be computed by Trustee) that shall, when added to the amounts
      that have been transferred from the Revenue Fund as provided for in subparagraph
      (a) above, be equal to the installment of interest coming due on the
      Subordinated Notes (whether at maturity, upon mandatory redemption, or
      otherwise) at Maturity, plus the Trustee’s and Paying Agent’s annual fees for
      the Subordinated Notes then due and remaining unpaid. 

     

    Notwithstanding
      the above, unless the Company is notified by Trustee that insufficient funds
      exist in the Subordinated Note Fund to effect such coming due interest payment
      and Trustee fee payments, the Company will not make any payment into the
      Subordinated Note Fund.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                5.03

            	
              Refinancing
                Fund.

            

    

     

    There
      is
      hereby created and ordered established with Trustee a special fund in the name
      of the Company, designated “Forster Drilling Corporation Refinancing Fund” (the
“Refinancing Fund”). Within
      the Refinancing Fund, there shall be created the Costs of Issuance Account.
      From
      the proceeds of the sale of the Subordinated Notes, the sum of approximately
      $1,000,000 (with the exact amount to be provided by the Company to Trustee
      in a
      Written Request delivered prior to the Issue Date) shall be deposited into
      the
      Refinancing Fund and an additional sum of $200,000 shall be deposited into
      the
      Costs of Issuance Account to be disbursed as provided in Section 5.04, below.
      The deposit of $1,000,000 into the Refinancing Fund will be used (i) to retire
      outstanding obligations of the Company as shall be designated in writing by
      the
      Company, and (ii) provide working capital for the Company. Amounts in the
      Refinancing Fund to be used to retire the Company’s outstanding obligations
      shall be disbursed by the Trustee to the entities designated by the Company
      in a
      Written Request to be delivered by the Corporation prior to the Issue Date,
      and
      the amounts in the Refinancing Fund representing working capital for the Company
      shall be wired into the Company’s operating accounts, as instructed by the
      Company, on the Issue Date. All amounts remaining in the Refinancing Fund after
      paying the Costs of Issuance and making the disbursements described in the
      preceding sentence, shall be wired to the Company’s operating account as
      instructed by the Company for use by the Company without further
      restriction.

     

    
      	
              SECTION
                5.04

            	
              Costs
                of Issuance Account

            

    

     

    There
      is
      hereby created and established with Trustee a special account within the
      Refinancing Fund, in the name of the Company, to be designated “Forster Drilling
      Corporation Note Costs of Issuance Account” (the “Costs of Issuance
      Account”).

     

    From
      proceeds of the Subordinated Notes and from other funds provided by Issuer,
      if
      any, the sum of approximately $200,000 (the exact amount to be set forth in
      the
      final Written Request from Placement Agent to Trustee on the Issue Date) to
      pay
      the costs of issuance of the Subordinated Notes issued and delivered on that
      date and such other amounts as shall be delivered by the Company for deposit
      therein shall be deposited into the Costs of Issuance Account. Monies at any
      time held in the Costs of Issuance Account shall be used for and applied solely
      to pay costs of issuance of the Notes, including underwriting, consultants,
      legal, printing, publication, trustee, paying agent and financial advisory
      fees
      and expenses. Payments from the Costs of Issuance Account shall be made by
      Trustee, upon receipt of a Written Request, signed by an appropriate Officer
      of
      the Company. Upon receipt of each such Written Request, Trustee shall pay each
      such item directly to the person or party entitled thereto as named in such
      authorization. Nothing in Section 5.03, above, or elsewhere in this Indenture
      shall be construed to prohibit the Company from directly paying some or all
      of
      the Costs of Issuance without utilizing the Costs of Issuance Account.

     

    After
      payment of the funds as directed by the Written Request, Trustee shall wire
      the
      balance of monies in the Costs of Issuance Account to the Company’s operating
      account, as instructed by the Company, for use by the Company without further
      restriction. 

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      6

     

    SUCCESSORS

     

    
      	
              SECTION
                6.01

            	
              Merger,
                Consolidation or Sale of
                Assets.

            

    

     

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

     

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

     

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

     

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

     

    (d) such
      transaction would not result in the loss, material impairment or adverse
      modification or amendment of any authorization, license, permit or franchise
      (governmental or otherwise) of the Company or its Restricted Subsidiaries that
      would have a material adverse effect on the business or operations of the
      Company and its Restricted Subsidiaries taken as a whole.

     

    
      	
              SECTION
                6.02

            	
              Successor
                Corporation Substituted.

            

    

     

    Upon
      any
      consolidation or merger, or any sale, lease, conveyance or other disposition
      of
      all or substantially all of the assets of the Company in accordance with
Section
      6.01
      hereof,
      the successor corporation formed by such consolidation or into or with which
      the
      Company is merged or to which such sale, lease, conveyance or other disposition
      is made shall succeed to, and be substituted for (or that from and after the
      date of such consolidation, merger, sale, lease, conveyance or other
      disposition, the provisions of this Indenture referring to the Company shall
      refer instead to the successor corporation and not to the Company), and may
      exercise every right and power of the Company under this Indenture with the
      same
      effect as if such successor Person has been named as the Company, herein;
provided,
      however,
      that
      the predecessor Company shall not be relieved from the obligations to pay the
      principal of, premium, if any, and interest on the Subordinated Notes, except
      in
      the case of a sale of all of the Company’s assets that meets the requirements of
Section
      6.01
      hereof.

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      7

     

    DEFAULTS
      AND REMEDIES

     

    
      	
              SECTION
                7.01

            	
              Events
                of Default.

            

    

     

    Each
      of
      the following constitutes an “Event of Default”; 

     

    (a) default
      for thirty days in the payment when due of interest on the Subordinated
      Notes;

     

    (b) default
      in payment when due (whether at maturity, upon redemption or repurchase, or
      otherwise) of the principal of or premium, if any, on the Subordinated
      Notes;

     

    (c) failure
      by the Company to comply with the provisions described in Section
      5.01;

     

    (d) failure
      by the Company or any of its Restricted Subsidiaries for thirty days after
      notice to comply with any of their other covenants in this Indenture or the
      Subordinated Notes; 

     

    (e) default
      under any mortgage, pledge, indenture or instrument under which there may be
      issued or by which there may be secured or evidenced any Indebtedness for money
      borrowed, including, without limitation, this Indenture and the Subordinated
      Notes, by the Company or any of its Restricted Subsidiaries (or the payment
      of
      which is guaranteed by the Company or any of its Restricted Subsidiaries),
      whether such Indebtedness or guarantee now exists, or is created after the
      date
      of the Indenture, which default: is caused by a failure to pay principal of,
      or
      premium, if any, or interest on, such Indebtedness on the date of such default
      provided that such default shall be in an amount or aggregate amount in excess
      of US $1.0 million and excluding debt being paid off from proceeds of the
      Subordinated Notes (a “Payment
      Default”);
      or

     

    (f) failure
      by the Company or any of its Restricted Subsidiaries to pay final judgments
      (other than any judgment as to which a reputable insurance company has accepted
      full liability and whose bond, premium or similar charge therefor is not in
      excess of US$4.0 million) aggregating in excess of US$4.0 million, which
      judgments are not paid, discharged or stayed within 60 days after the date
      on
      which any period for appeal has expired and during which a stay of enforcement
      of such judgment shall not be in effect; 

     

    (g) if
      the
      Company or any Restricted Subsidiary shall be dissolved (other than a technical
      dissolution of a Subsidiary which is cured within sixty (60) days of notice
      thereof) or liquidated (or any judgment, order or decree therefor shall be
      entered); or if a creditors’ committee shall have been appointed for the
      business of the Company or any Restricted Subsidiary; or if the Company or
      any
      Restricted Subsidiary shall have made a general assignment for the benefit
      of
      creditors or shall have been adjudicated bankrupt and if not an adjudication
      based on a filing made by the Trustee, it shall not have been dismissed within
      sixty (60) days, or shall have filed a voluntary petition in bankruptcy or
      for
      reorganization or to effect a plan or arrangement with creditors or shall fail
      to pay its debts generally as such debts become due in the ordinary course
      of
      business (except as contested in good faith and for which adequate reserves
      are
      made in such party’s financial statements); or shall file an answer to a
      creditor’s petition or other petition filed against it, admitting the material
      allegations thereof for an adjudication in bankruptcy or for reorganization;
      or
      shall have applied for or permitted the appointment of a receiver or trustee
      or
      custodian for any of its property or assets; or such receiver, trustee or
      custodian shall have been appointed for any of its property or assets (otherwise
      than upon application or consent of the Company or of any Restricted Subsidiary)
      and shall not have been removed within sixty (60) days; or if an order shall
      be
      entered approving any petition for reorganization of the Company or any
      Restricted Subsidiary and shall not have been reversed or dismissed within
      sixty
      (60) days; or if the Company, any of the Restricted Subsidiaries or any of
      the
      creditors of the Company or any of Restricted Subsidiary initiates a mandatory
      Conciliation Proceeding; if the Company or any Restricted Subsidiary shall
      take
      any action (corporate or other) authorizing or in furtherance any of the actions
      described above; and

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    (h) any
      Guarantee of the Subordinated Notes by the Subsidiary Guarantor shall be held
      in
      a judicial proceeding to be unenforceable or invalid or any Subsidiary
      Guarantor, or chief executive officer of Subsidiary Guarantor shall deny or
      disaffirm its obligations under its Guarantee of any Subordinated
      Notes.

     

    
      	
              SECTION
                7.02

            	
              Acceleration.

            

    

     

    If
      any
      Event of Default occurs and is continuing with respect to this Indenture and
      the
      Subordinated Notes, the Trustee or the Holders of at least 25% of the aggregate
      principal amount of the then outstanding Subordinated Notes may declare all
      the
      Subordinated Notes to be due and payable immediately. Upon such declaration,
      the
      principal of, premium, if any, and accrued and unpaid interest on the
      Subordinated Notes shall be due and payable immediately. Notwithstanding the
      foregoing, in the case of an Event of Default arising from any of the events
      described in Section
      7.01(h),
      or in
      the event the Company fails to make any payment when due under clauses (a)
      and
      (b) of Section
      7.01,
      all
      outstanding Subordinated Notes will become due and payable without further
      action or notice. Holders of the Subordinated Notes may not enforce the
      Indenture or the Subordinated Notes except as provided in this Indenture.
      Subject to certain limitations, Holders of a majority in principal amount of
      the
      then outstanding Subordinated Notes may direct the Trustee in its exercise
      of
      any trust or power. The Trustee may withhold from Holders of the Subordinated
      Notes notice of any continuing Default or Event of Default (except a Default
      or
      Event of Default relating to the payment of principal or interest) if it
      determines that withholding notice is in the best interest of the
      Holders.

     

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

    

      Subordinate
        Note Indenture

       

    

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                7.03

            	
              Other
                Remedies.

            

    

     

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

     

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

     

    
      	
              SECTION
                7.04

            	
              Waiver
                of Past Defaults.

            

    

     

    Holders
      of not less than a majority in aggregate principal amount of the then
      outstanding Subordinated Notes by notice to the Trustee may, on behalf of the
      Holders of all of the Subordinated Notes, waive any existing Default or Event
      of
      Default and its consequences, except a continuing Default or Event of Default
      in
      the payment of the principal of, premium, if any, or interest on, the
      Subordinated Notes. Upon any such waiver, such Default shall cease to exist,
      and
      any Event of Default arising therefrom shall be deemed to have been cured for
      every purpose of this Indenture; but no such waiver shall extend to any
      subsequent or other Default or Event of Default or impair any right consequent
      thereon.

     

    
      	
              SECTION
                7.05

            	
              Control
                by Majority.

            

    

     

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

     

    
      	
              SECTION
                7.06

            	
              Limitation
                on Suits.

            

    

     

    No
      Holder
      of a Subordinated Note shall have any right to institute any proceeding with
      respect to this Indenture or the Subordinated Notes or for any remedy
      thereunder, unless:

     

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

     

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

     

    Subordinate
      Note Indenture

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

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

     

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

     

    Otherwise,
      no Holder of any Subordinated Note shall have any right to institute any
      proceeding with respect to this Indenture or the Subordinated Notes or for
      any
      remedy thereunder, except the institution of any proceedings with respect to
      this Indenture or the Subordinated Notes or any remedy thereunder, including
      without limitation acceleration, by the Holders of a majority in principal
      amount of the then outstanding Subordinated Notes; provided
      that,
      upon institution of any proceeding or exercise of any remedy such Holders
      provide the Trustee with prompt written notice thereof.

     

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

     

    
      	
              SECTION
                7.07

            	
              Rights
                of Holders of Subordinated
                Notes to Receive Payment.

            

    

     

    Notwithstanding
      any other provision of this Indenture, the right of any Holder of a Subordinated
      Note to receive payment of principal, premium, if any, and interest on the
      Subordinated Note, on or after the respective due dates expressed in the
      Subordinated Note, 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 the Holder of the Subordinated Note.

     

    
      	
              SECTION
                7.08

            	
              Collection
                Suit by Trustee.

            

    

     

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

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                7.09

            	
              Trustee
                May File Proofs of Claim.

            

    

     

    Trustee
      is authorized to file such proofs of claim and other papers or documents as
      may
      be necessary or advisable in order to have the claims of the Trustee (including
      any claim for the reasonable compensation, expenses, disbursements and advances
      of the Trustee, its agents and counsel) and the Holders of the Subordinated
      Notes allowed in any judicial proceedings relative to the Company (or any other
      obligor upon the Subordinated Notes), the Company’s creditors or the Company’s
      property and shall be entitled and empowered to collect, receive and distribute
      any money or other property payable or deliverable on any such claims and any
      custodian in any such judicial proceeding is hereby authorized by each Holder
      of
      a Subordinated Note to make such payments to the Trustee, and in the event
      that
      the Trustee shall consent to the making of such payments directly to the Holders
      of the Subordinated Notes, to pay to the Trustee any amount due to it for the
      reasonable compensation, expenses, disbursements and advances of the Trustee,
      its agents and counsel, and any other amounts due the Trustee under Section
      8.07
      hereof.
      To the extent that the payment of any such compensation, expenses, disbursements
      and advances of the Trustee, its agents and counsel, and any other amounts
      due
      the Trustee under Section
      8.07
      hereof
      out of the estate in any such proceeding, shall be denied for any reason,
      payment of the same shall be secured by a Lien on, and shall be paid out of,
      any
      and all distributions, dividends, money, securities and other properties which
      the Holders of the Subordinated Notes may be entitled to receive in such
      proceeding whether in liquidation or under any plan of reorganization or
      arrangement or otherwise. Nothing contained herein shall be deemed to authorize
      the Trustee to authorize or consent to or accept or adopt on behalf of any
      Holder of a Subordinated Note any plan of reorganization, arrangement,
      adjustment or composition affecting the Subordinated Notes or the rights of
      any
      Holder of a Subordinated Note thereof, or to authorize the Trustee to vote
      in
      respect of the claim of any Holder of a Subordinated Note in any such
      proceeding.

     

    
      	
              SECTION
                7.10

            	
              Priorities.

            

    

     

    If
      the
      Trustee collects any money pursuant to this Article
      7,
      it
      shall pay out the money in the following order:

     

    First:
      to
      the Trustee, its agents and attorneys for amounts due under Section
      8.07
      hereof,
      including payment of all compensation, expenses and liabilities incurred, and
      all advances made, by the Trustee and the costs and expenses of
      collection,

     

    Second:
      (i) first to Holders of Subordinated Notes, for amounts due and unpaid on such
      Subordinated Notes for interest, ratably, without preference or priority of
      any
      kind, according to the amounts due and payable on the Subordinated Notes for
      interest, and (ii) second, to the extent any other monies are available, to
      Holders of all Subordinated Notes for amounts due and unpaid on all such
      Subordinated Notes for principal and premium, if any, ratably, without
      preference or priority of any kind, according to the amounts due and payable
      on
      the Subordinated Notes for principal and premium; and

     

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

     

    The
      Trustee may fix a record date and payment date for any such payment to Holders
      of Subordinated Notes.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                7.11

            	
              Undertaking
                of Costs.

            

    

     

    In
      any
      suit for the enforcement of any right or remedy under this Indenture or in
      any
      suit against the Trustee for any action taken or omitted by it as a Trustee,
      a
      court in its discretion may require the filing by any party litigant in the
      suit
      of an undertaking to pay the costs of the suit, and the court in its discretion
      may assess reasonable costs, including reasonable attorney’s 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
      7.11
      does not
      apply to a suit by the Trustee, a suit by a Holder of a Subordinated Note
      pursuant to Section
      7.07
      hereof, or
      a suit
      by Holders of more than 10% in principal amount of the then outstanding
      Subordinated Notes.

     

    ARTICLE
      8

     

    TRUSTEE

     

    
      	
              SECTION
                8.01

            	
              Duties
                of Trustee.

            

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

    (iii) the
      Trustee shall not be liable with respect to any action it takes or omits to
      take
      in good faith in accordance with a direction received by it pursuant to
Section
      7.05
      hereof.

     

    (d) Whether
      or not therein expressly so provided, every provision of this Indenture that
      in
      any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of
      this Section 8.01.

     

    (e) No
      provision of this Indenture shall require the Trustee to expend or risk its
      own
      funds or incur any liability. The Trustee shall be under no obligation to
      exercise any of its rights and powers under this Indenture at the request of
      any
      Holders of Subordinated Notes, unless such Holder shall have provided to the
      Trustee security and indemnity satisfactory to the Trustee against any loss,
      liability or expense.

     

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

     

    
      	
              SECTION
                8.02

            	
              Rights
                of Trustee.

            

    

     

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

     

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

     

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

     

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

     

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

     

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

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

    (g) The
      Trustee shall not be deemed to have notice of any Default or Event of Default
      unless a Responsible Officer of the Trustee has actual knowledge thereof or
      unless written notice thereof is received by the Trustee at the Corporate Trust
      Office of the Trustee, and such notice refers to the Subordinated Notes or
      this
      Indenture

     

    
      	
              SECTION
                8.03

            	
              Individual
                Rights of Trustee.

            

    

     

    The
      Trustee in its individual or any other capacity may become the owner or pledgee
      of Subordinated Notes and may otherwise deal with the Company or any Affiliate
      of the Company with the same rights it would have if it were not Trustee.
      However, in the event that the Trustee acquires any conflicting interest, it
      must eliminate such conflict within 90 days, apply to the Commission for
      permission to continue as Trustee (if this Indenture is qualified under the
      Trust Indenture Act) or resign. Any Agent may do the same with like rights
      and
      duties. The Trustee is also subject to Sections
      8.10
      and
      8.11
      hereof.

     

    
      	
              SECTION
                8.04

            	
              Trustee’s
                Disclaimer.

            

    

     

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

     

    
      	
              SECTION
                8.05

            	
              Notice
                of Defaults.

            

    

     

    If
      a
      Default or Event of Default occurs and is continuing and if it is known to
      a
      Responsible Officer of the Trustee, the Trustee shall mail to Holders of
      Subordinated Notes a notice of the Default or Event of Default within 60 days
      after it occurs. Except in the case of a Default or Event of Default in payment
      of principal of, premium, if any, or interest on any Subordinated Note, the
      Trustee may withhold the notice if and so long as a committee of its Responsible
      Officers in good faith determines that withholding the notice is in the best
      interests of the Holders of the Subordinated Notes.

     

    
      	
              SECTION
                8.06

            	
              Reports
                by Trustee to Holders of the Subordinated
                Notes.

            

    

     

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

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

    A
      copy of
      each report at the time of its mailing to the Holders of Subordinated Notes
      shall be mailed to the Company and (but only if this Indenture is then qualified
      under the TIA) filed with the Commission and each stock exchange on which the
      Subordinated Notes are listed, if any. The Company shall promptly notify the
      Trustee when the Subordinated Notes are listed on any stock
      exchange.

     

    
      	
              SECTION
                8.07

            	
              Compensation
                and Indemnity.

            

    

     

    The
      Company shall compensate the Trustee for its acceptance of this Indenture and
      services hereunder as follows: (i) $2,500, payable on the Issue Date, and (ii)
      $2,000 payable on each January 3 throughout the term of the Subordinated Notes,
      commencing on January 3, 2009. The Trustee’s compensation shall not be limited
      by any law on compensation of a trustee of an express trust. The Company shall
      reimburse the Trustee promptly upon written request for all reasonable
      disbursements, advances and expenses incurred or made by it in addition to
      the
      compensation for its services. Such expenses shall include the reasonable
      compensation, disbursements and expenses of the Trustee’s agents and
      counsel.

     

    The
      Company shall indemnify the Trustee against any and all losses, liabilities
      or
      expenses incurred by it arising out of or in connection with the acceptance
      or
      administration of its duties under this Indenture, except any such loss,
      liability or expense as may be attributable to the negligence or bad faith
      of
      the Trustee. The Trustee shall notify the Company promptly of any claim for
      which it may seek indemnity. Failure by the Trustee to so notify the Company
      shall not relieve the Company of its obligations hereunder. The Company shall
      defend the claim and the Trustee shall cooperate in the defense. The Trustee,
      in
      its sole discretion, may elect to have separate counsel selected by it and
      the
      Company shall pay the reasonable fees and expenses of such counsel. The Company
      need not pay for any settlement made without its written consent, which consent
      shall not be unreasonably withheld.

     

    The
      obligations of the Company under this Section
      8.07
      shall
      survive the satisfaction and discharge of this Indenture.

     

    To
      secure
      the Company payment obligations in this Section
      8.07,
      the
      Trustee shall have a Lien prior to the Subordinated Notes on all money or
      property held or collected by the Trustee, except that held in trust to pay
      principal, premium, if any, and interest on particular Subordinated Notes.
      Such
      Lien shall survive the satisfaction and discharge of this
      Indenture.

     

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

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                8.08

            	
              Replacement
                of Trustee.

            

    

     

    A
      resignation or removal of the Trustee and appointment of a successor Trustee
      shall become effective only upon the successor Trustee’s acceptance of
      appointment as provided in this Section
      8.08.

     

    The
      Trustee may resign in writing at any time and be discharged from the trust
      hereby created by so notifying the Company. The Holders of Subordinated Notes
      of
      a majority in principal amount of the then outstanding Subordinated Notes may
      remove the Trustee by so notifying the Trustee and the Company in writing.
      The
      Company may remove the Trustee if:

     

    (a) the
      Trustee fails to comply with Section
      8.10
      hereof;

     

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

     

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

     

    (d) the
      Trustee becomes incapable of acting.

     

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

     

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

     

    If
      the
      Trustee after written request by any Holder of a Subordinated Note who has
      been
      a Holder of a Subordinated Note for at least six months fails to comply with
      Section
      8.10
      hereof,
      such Holder of a Subordinated Note may petition any court of competent
      jurisdiction for the removal of the Trustee and the appointment of a successor
      Trustee.

     

    A
      successor Trustee shall deliver a written acceptance of its appointment to
      the
      retiring Trustee and to the Company. Thereupon the resignation or removal of
      the
      retiring Trustee shall become effective, and the successor Trustee shall have
      all the rights, powers and duties of the Trustee under this Indenture. The
      successor Trustee shall mail a notice of its succession to Holders of the
      Subordinated Notes. The retiring Trustee shall promptly transfer all property
      held by it as Trustee to the successor Trustee, provided all sums owing to
      the
      Trustee hereunder have been paid and subject to the Lien provided for in
Section
      8.07
      hereof.
      Notwithstanding replacement of the Trustee pursuant to this Section
      8.08,
      the
      Company’s obligations under Section
      8.07
      hereof
      shall continue for the benefit of the retiring Trustee.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                8.09

            	
              Successor
                Trustee by Merger, Etc.

            

    

     

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

     

    
      	
              SECTION
                8.10

            	
              Eligibility;
                Disqualification.

            

    

     

    There
      shall at all times be a Trustee hereunder which shall be a corporation organized
      and doing business under the laws of the United States of America or of any
      state thereof authorized under such laws to exercise corporate trustee power
      shall be subject to supervision or examination by federal or state authority
      and
      shall have a combined capital and surplus of at least US$25.0 million as set
      forth in its most recent published annual report of condition.

     

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

     

    
      	
              SECTION
                8.11

            	
              Preferential
                Collection of Claims Against
                Company.

            

    

     

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

     

    ARTICLE
      9

     

    LEGAL
      DEFEASANCE AND COVENANT DEFEASANCE

     

    
      	
              SECTION
                9.01

            	
              Option
                to Effect Legal Defeasance or Covenant
                Defeasance.

            

    

     

    The
      Company may, at the option of the Board of Directors, evidenced by a resolution
      set forth in an Officers’ Certificate and at any time, with respect to the
      Subordinated Notes, elect to have either Section
      9.02
      or
      9.03
      hereof
      be applied to all outstanding Subordinated Notes upon compliance with the
      conditions set forth below in this Article
      9.

     

    
      	
              SECTION
                9.02

            	
              Legal
                Defeasance and Discharge.

            

    

     

    Upon
      the
      Company’s exercise under Section
      9.01
      hereof
      of the option applicable to this Section 9.02,
      the
      Company shall be deemed to have been discharged from its obligations with
      respect to all outstanding Subordinated Notes on the date the conditions set
      forth below are satisfied (hereinafter, “Legal
      Defeasance”).
      For
      this purpose, such Legal Defeasance means that the Company shall be deemed
      to
      have paid and discharged the entire Indebtedness represented by the outstanding
      Subordinated Notes, which shall thereafter be deemed to be “outstanding” only
      for the purposes of Section
      9.05
      hereof
      and the other sections of this Indenture referred to in (a) and (b) below,
      and
      to have satisfied all of its other obligations under such Subordinated Notes
      and
      this Indenture (and the Trustee, on demand of and at the expense of the Company,
      shall execute proper instruments acknowledging the same), except for the
      following which shall survive until otherwise terminated or discharged
      hereunder: (a) the rights of Holders of outstanding Subordinated Notes to
      receive from the trust described below payments in respect of the principal
      of,
      premium, if any, and interest on such Subordinated Notes when such payments
      are
      due, or on the redemption date, as the case may be; (b) the Company’s
      obligations with respect to the Subordinated Notes concerning issuing temporary
      Subordinated Notes, registration of Subordinated Notes, mutilated, destroyed,
      lost or stolen Subordinated Notes and the maintenance of an office or agency
      for
      payment and money for security payments held in trust; (c) the rights, powers,
      trust, duties and immunities of the Trustee, and the Company’s obligations in
      connection therewith; and (d) the legal defeasance provisions of this
      Indenture.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                9.03

            	
              Covenant
                Defeasance.

            

    

     

    Upon
      the
      Company’s exercise under Section
      9.01
      hereof
      of the option applicable to this Section 9.03,
      the
      Company shall be released from its obligations under the covenants contained
      in
Sections
      4.05,
      4.06,
      4.07,
      4.10,
      4.11,
      4.12,
      4.13,
      4.14,
      4.15
      and
4.16
      hereof
      and Article
      6
      hereof
      with respect to the outstanding Subordinated Notes on and after the date the
      conditions set forth below are satisfied (hereinafter, “Covenant
      Defeasance”),
      and
      the Subordinated Notes shall thereafter be deemed not “outstanding” for the
      purposes of any direction, waiver, consent or declaration or act of Holders
      (and
      the consequences of any thereof) in connection with such covenants, but shall
      continue to be deemed “outstanding” for all other purposes hereunder (it being
      understood that such Subordinated Notes shall not be deemed outstanding for
      accounting purposes). For this purpose, such Covenant Defeasance means that,
      with respect to the outstanding Subordinated Notes, 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 shall not constitute a Default or an Event
      of Default under Sections 7.01(c),
      (d),
      (e)
      or
(f)
      hereof
      but, except as specified above, the remainder of this Indenture and such
      Subordinated Notes shall be unaffected thereby. In addition, upon the Company’s
      exercise under Section 9.01
      hereof
      of the option applicable to this Section
      9.03,
      Sections
      7.01(g)
      through
      7.01(h)
      hereof
      shall not constitute Events of Default.

     

    
      	
              SECTION
                9.04

            	
              Conditions
                to Legal or Covenant
                Defeasance.

            

    

     

    The
      following shall be the conditions to the application of either Section
      9.02
      or
Section 8.03
      hereof
      to the outstanding Subordinated Notes:

     

    (a) the
      Company must irrevocably deposit with the Trustee, in trust, for the benefit
      of
      the Holders of the Subordinated Notes, cash in United States dollars,
      non-callable Government Securities, or a combination thereof, in such amounts
      as
      will be sufficient, in the written opinion, delivered to the Trustee, of a
      United States nationally recognized firm of independent public accountants
      selected by the Company, to pay the principal of, premium, if any, and interest
      on, the outstanding Subordinated Notes, on the stated maturity or on the
      applicable optional redemption date, as the case may be, of such principal
      or
      installment of principal of, premium, if any, or interest on, in respect of
      the
      outstanding Subordinated Notes;

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

    (b) in
      the
      case of legal defeasance, the Company must deliver to the Trustee an opinion
      of
      counsel in the United States reasonably acceptable to the Trustee confirming
      that (A) the Company has received from, or there has been published by, the
      United States Internal Revenue Service a ruling or (B) since the Issue Date,
      there has been a change in the applicable United States federal income tax
      law,
      in either case to the effect that, and based thereon such opinion of counsel
      shall confirm that, the Holders of the outstanding Subordinated Notes will
      not
      recognize income, gain or loss for federal income tax purposes as a result
      of
      such legal defeasance and will be subject to federal income tax on the same
      amounts, in the same manner and at the same times as would have been the case
      if
      such legal defeasance had not occurred;

     

    (c) in
      the
      case of covenant defeasance, the Company must deliver to the Trustee an opinion
      of counsel in the United States reasonably acceptable to the Trustee confirming
      that the Holders of the outstanding Subordinated Notes will not recognize
      income, gain or loss for United States federal income tax purposes as a result
      of such covenant defeasance and will be subject to United States federal income
      tax on the same amounts, in the same manner and at the same times as would
      have
      been the case if such covenant defeasance had not occurred;

     

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

     

    (e) such
      legal defeasance or covenant defeasance will not result in a breach or violation
      of, or constitute a default under, any material agreement or instrument (other
      than the Indenture) to which the Company or any of its Restricted Subsidiaries
      is a party or by which the Company or any of its Restricted Subsidiaries is
      bound;

     

    (f) the
      Company must have delivered to the Trustee an opinion of counsel to the effect
      that after the 91st day (or such other applicable date) following the deposit,
      the trust funds will not be subject to the effect of any applicable bankruptcy,
      insolvency, reorganization or similar laws affecting creditors’ rights
      generally;

     

    (g) the
      Company must deliver to the Trustee an Officers’ Certificate stating that the
      deposit was not made by the Company with the intent of preferring the Holders
      of
      Subordinated Notes over the other creditors of the Company with the intent
      of
      defeating, hindering, delaying or defrauding creditors of the Company or others;
      and

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

    (h) the
      Company must deliver to the Trustee an Officers’ Certificate and an opinion of
      counsel, each stating that all conditions precedent provided for relating to
      the
      legal defeasance or the covenant defeasance have been complied
      with.

     

    
      	
              SECTION
                9.05

            	
              Deposited
                Money and Government Securities to be Held in Trust; Other Miscellaneous
                Provisions.

            

    

     

    Subject
      to Section
      9.06
      hereof,
      all money and Government Securities (including the proceeds thereof) deposited
      with the Trustee (or other qualifying trustee, collectively for purposes of
      this
Section
      9.05,
      the
“Trustee”)
      pursuant to Section
      9.04
      hereof
      in respect of the outstanding Subordinated Notes shall be held in trust and
      applied by the Trustee, in accordance with the provisions of such Subordinated
      Notes and this Indenture, to the payment, either directly or through any Paying
      Agent (including the Company acting as Paying Agent) as the Trustee may
      determine, to the Holders of such Subordinated Notes of all sums due and to
      become due thereon in respect of principal, premium, if any, and interest,
      but
      such money and Government Securities (including any proceeds thereof) need
      not
      be segregated from other funds except to the extent required by
      law.

     

    The
      Company shall pay and indemnify the Trustee against any tax, fee or other charge
      imposed on or assessed against the cash or Government Securities deposited
      pursuant to Section 9.04
      hereof
      or
      the principal and interest received in respect thereof other than any such
      tax,
      fee or other charge which by law is for the account of the Holders of the
      outstanding Subordinated Notes.

     

    Anything
      in this Article
      9
      to the
      contrary notwithstanding, the Trustee shall deliver or pay to the Company from
      time to time upon the request of the Company any money or Government Securities
      held by it as provided in Section
      9.04
      hereof
      which, in the opinion of a United States nationally recognized firm of
      independent public accountants expressed in a written certification thereof
      delivered to the Trustee (which may be the opinion delivered under Section
      9.04(a)
      hereof),
      are in excess of the amount thereof which would then be required to be deposited
      to effect an equivalent Legal Defeasance or Covenant Defeasance.

     

    
      	
              SECTION
                9.06

            	
              Repayment
                to Company.

            

    

     

    Any
      money
      deposited with the Trustee or any Paying Agent, or then held by the Company,
      in
      trust for the payment of the principal of, premium, if any, or interest on
      any
      Subordinated Note and remaining unclaimed for two years after such principal,
      and premium, if any, or interest has become due and payable shall be paid to
      the
      Company on its written request or (if then held by the Company) shall be
      discharged from such trust; and the Holder of such Subordinated Note shall
      thereafter, as a creditor, look only to the Company for payment thereof, and
      all
      liability of the Trustee or such Paying Agent with respect to such trust money,
      and all liability of the Company as trustee thereof, shall thereupon cease;
      provided, however, that the Trustee or such Paying Agent,
      before being required to make any such repayment may at the expense of the
      Company cause to be published once, in the New York Times and The Wall Street
      Journal (national edition), notice that such money remains unclaimed and that,
      after a date specified therein, which shall not be less than 30 days from the
      date of such notification or publication, any unclaimed balance of such money
      then remaining will be repaid to the Company.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                9.07

            	
              Reinstatement.

            

    

     

    If
      the
      Trustee or Paying Agent is unable to apply any United States dollars or
      Government Securities in accordance with Section
      9.02
      or
      9.03
      hereof,
      as the case may be, by reason of any order or judgment of any court or
      governmental authority enjoining, restraining or otherwise prohibiting such
      application, then the Company’s obligations under this Indenture and the
      Subordinated Notes shall be revived and reinstated as though no deposit had
      occurred pursuant to Section 9.02
      or
9.03
      hereof
      until such time as the Trustee or Paying Agent is permitted to apply all such
      money in accordance with Section
      9.02
      or
9.03
      hereof,
      as the case may be; provided, however, that, if the Company makes any payment
      of
      principal of, premium, if any, or interest on any Subordinated Note following
      the reinstatement of its obligations, the Company shall be subrogated to the
      rights of the Holders of such Subordinated Notes to receive such payment from
      the money held by the Trustee or Paying Agent.

     

    ARTICLE
      10

     

    AMENDMENT,
      SUPPLEMENT AND WAIVER

     

    
      	
              SECTION
                10.01

            	
              Without
                Consent of Holders of Subordinated
                Notes.

            

    

     

    Notwithstanding
      Section
      10.02
      hereof,
      the Company and the Trustee may amend or supplement this Indenture or the
      Subordinated Notes without the consent of any Holder of a Subordinated
      Note:

     

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

     

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

     

    (c) to
      provide for the assumption of the Company’s obligations to Holders of the
      Subordinated Notes in the case of a merger or consolidation;

     

    (d) to
      make
      any change that would provide any additional rights or benefits to the Holders
      of the Subordinated Notes or that does not adversely affect the legal rights
      under this Indenture of any such Holder; 

     

    (e) to
      add
      any Guarantee with respect to the Subordinated Notes, including any Subsidiary
      Guarantees, or to secure the Subordinated Notes; or

     

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

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

    Upon
      the
      request of the Company accompanied by a Board Resolution authorizing the
      execution of any such amended or supplemental Indenture, and upon receipt by
      the
      Trustee of the documents described in Section
      10.06
      hereof,
      the Trustee shall join with the Company in the execution of any amended or
      supplemental Indenture authorized or permitted by the terms of this Indenture
      and to make any further appropriate agreements and stipulations which may be
      therein contained, but the Trustee shall not be obligated to enter into such
      amended or supplemental Indenture which affects its own rights, duties or
      immunities under this Indenture or otherwise.

     

    
      	
              SECTION
                10.02

            	
              With
                Consent of Holders of Subordinated
                Notes.

            

    

     

    (a) The
      Company and the Trustee may amend or supplement this Indenture or the
      Subordinated Notes or any amended or supplemental Indenture with the written
      consent of the Holders of Subordinated Notes of at least a majority in aggregate
      principal amount of the Subordinated Notes then outstanding (including consents
      obtained in connection with a tender offer or exchange offer for the
      Subordinated Notes), and any existing Default and its consequences or compliance
      with any provision of this Indenture, the Subordinated Notes or any document
      related thereto may be waived with the consent of the Holders of a majority
      in
      principal amount of the then outstanding Subordinated Notes (including consents
      obtained in connection with a tender offer or exchange offer for the
      Subordinated Notes).

     

    (b) Upon
      the
      request of the Company accompanied by a Board Resolution authorizing the
      execution of any such amended or supplemental Indenture, and upon the filing
      with the Trustee of evidence satisfactory to the Trustee of the consent of
      the
      Holders of Subordinated Notes as aforesaid, and upon receipt by the Trustee
      of
      the documents described in Section
      10.06
      hereof,
      the Trustee shall join with the Company in the execution of such amended or
      supplemental Indenture unless such amended or supplemental Indenture affects
      the
      Trustee’s own rights, duties or immunities under this Indenture or otherwise, in
      which case the Trustee may in its discretion, but shall not be obligated to,
      enter into such amended or supplemental Indenture.

     

    (c) It
      shall
      not be necessary for the consent of the Holders of Subordinated Notes under
      this
Section 10.02
      to
      approve the particular form of any proposed amendment or waiver, but it shall
      be
      sufficient if such consent approves the substance thereof.

     

    (d) After
      an
      amendment, supplement or waiver under this Section
      10.02
      becomes
      effective, the Company shall mail to the Holders of Subordinated Notes affected
      thereby a notice briefly describing the amendment, supplement or waiver. Any
      failure of the Company to mail such notice, or any defect therein, shall not,
      however, in any way impair or affect the validity of any such amended or
      supplemental Indenture or waiver. Subject to Sections
      7.04
      and
7.07
      hereof,
      the Holders of a majority in aggregate principal amount of the Subordinated
      Notes then outstanding may waive compliance in a particular instance by the
      Company with any provision of this Indenture or the Subordinated Notes. However,
      without the consent of each Holder affected, an amendment or waiver may not
      (with respect to any Subordinated Notes held by a non-consenting
      Holder):

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

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

     

    (ii) reduce
      the principal of or change the fixed maturity of any Subordinated Note or alter
      the provisions with respect to the redemption of the Subordinated
      Notes;

     

    (iii) reduce
      the rate of or change the time for payment of interest on any Subordinated
      Notes;

     

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

     

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

     

    (vi) make
      any
      change in the provisions of this Indenture relating to waivers of past Defaults
      or the rights of Holders of Subordinated Notes to receive payments of principal
      of, premium, if any, or interest on, the Subordinated Notes;

     

    (vii) waive
      a
      redemption payment with respect to any Subordinated Note; or

     

    (viii) make
      any
      change in the foregoing amendment and waiver provisions.

     

    
      	
              SECTION
                10.03

            	
              Compliance
                with Trust Indenture Act.

            

    

     

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

     

    
      	
              SECTION
                10.04

            	
              Revocation
                and Effect of Consents.

            

    

     

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

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

    The
      Company may fix a record date for determining which Holders of the Subordinated
      Notes must consent to such amendment, supplement or waiver. If the Company
      fixes
      a record date, the record date shall be fixed at (i) the later of 30 days prior
      to the first solicitation of such consent or the date of the most recent list
      of
      Holders of Subordinated Notes furnished to the Trustee prior to such
      solicitation pursuant to Section
      2.05
      hereof
      or (ii) such other date as the Company shall designate.

     

    
      	
              SECTION
                10.05

            	
              Notation
                on or Exchange of Subordinated
                Notes.

            

    

     

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

     

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

     

    
      	
              SECTION
                10.06

            	
              Trustee
                to Sign Amendments, Etc.

            

    

     

    The
      Trustee shall sign any amended or supplemental Indenture authorized pursuant
      to
      this Article 9 if the amendment or supplement does not adversely affect the
      rights, duties, liabilities or immunities of the Trustee. The Company may not
      sign an amendment or supplemental Indenture until the Board of Directors
      approves it.

     

    ARTICLE
      11

     

    GUARANTEES

     

    
      	
              SECTION
                11.01

            	
              Guarantees.

            

    

     

    The
      Guarantors each hereby irrevocably and unconditionally guarantees, jointly
      and
severally,
      to each
      Holder and to the Trustee and its successors and assigns (a) the full and
      punctual payment of the principal of, premium, if any, and interest on the
      Subordinated Notes, whether at stated maturity, by acceleration, by redemption
      or otherwise, the due and punctual payment of interest on the overdue principal
      and premium, if any, and (to the extent permitted by law) interest on any
      interest, if any, on the Subordinated Notes, and the due and punctual
      performance of all other Subordinated Note Obligations of the Company to the
      Holders or the Trustee, (b) in case of any extension of time of payment or
      renewal of any Subordinated Notes or any such other Subordinated Note
      Obligations, that the same shall be promptly paid in full when due or performed
      in accordance with the terms of the extension or renewal, whether at stated
      maturity, by acceleration or otherwise, and (c) the payment of any and all
      costs
      and expenses (including reasonable attorneys' fees and expenses) incurred by
      the
      Trustee or any Holder in enforcing any rights under the Guarantee. Each
      Guarantor further agrees that its obligations hereunder may be extended or
      renewed, in whole or in part, without notice or further assent from such
      Guarantor and that such Guarantor will remain bound under this Article
      11
      notwithstanding any extension or renewal of any such obligation.

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        72

        
          

        

      

      
        
        

      

    

    Each
      Guarantor hereby agrees that its obligations with regard to its Guarantee shall
      be joint and several, unconditional, irrespective of the validity or
      enforceability of the Subordinated Notes or the Subordinated Note Obligations,
      the absence of any action to enforce the same or any other circumstances (other
      than complete performance) which might otherwise constitute a legal or equitable
      discharge or defense of a Guarantor. Each Guarantor further, to the fullest
      extent permitted by applicable law, waives presentation to, demand of, payment
      from and protest to the Company of any of the obligations and also waives notice
      of protest for nonpayment. Each Guarantor waives notice of any default under
      the
      Subordinated Notes or any Subordinated Note Obligation. The obligations of
      each
      Guarantor hereunder shall not be affected by (1) the failure of any Holder
      or
      the Trustee to assert any claim or demand or to enforce any right or remedy
      against the Company or any other Person (including any Guarantor) under this
      Indenture, the Subordinated Notes or any other Subordinated Note Documents
      or
      otherwise; (2) any extension or renewal of any thereof; (3) any rescission,
      waiver, amendment or modification of any of the terms or provisions of this
      Indenture, the Subordinated Note Documents or any other agreement; (4) the
      release of any security held by any Holder or the Collateral Agent for the
      Subordinated Note Obligations or any of them; (5) the failure of any Holder
      or
      the Collateral Agent to exercise any right or remedy against any other guarantor
      of the obligations; or (6) except as set forth in Section
      11.06,
      any
      change in the ownership of such Subsidiary Guarantor.

     

    Each
      Guarantor further agrees that its Guarantee herein constitutes a guarantee
      of
      payment, performance and compliance when due (and not a guarantee of collection)
      and waives any right to require that any resort be had by any Holder or the
      Trustee to any security held for payment of the obligations.

     

    Except
      as
      expressly set forth in Sections
      9.02
      and
11.06,
      the
      Obligations of each Guarantor hereunder shall not be subject to any reduction,
      limitation, impairment or termination for any reason, including any claim of
      waiver, release, surrender, alteration or compromise, and shall not be subject
      to any defense of setoff, counterclaim, recoupment or termination whatsoever
      or
      by reason of the invalidity, illegality or unenforceability of the Subordinated
      Note Obligations or otherwise. Without limiting the generality of the foregoing,
      the obligations of each Guarantor herein shall not be discharged or impaired
      or
      otherwise affected by the failure of any Holder, the Trustee or the Collateral
      Agent to assert any claim or demand or to enforce any remedy under this
      Indenture, the Subordinated Notes, any Subordinated Note Documents or any other
      agreement, by any waiver or modification of any thereof, by any default, failure
      or delay, willful or otherwise, in the performance of the Subordinated Note
      Obligations, or by any other act or thing or omission or delay to do any other
      act or thing which may or might in any manner or to any extent vary the risk
      of
      such Guarantor or would otherwise operate as a discharge of such Guarantor
      as a
      matter of law or equity.

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        73

        
          

        

      

      
        
        

      

    

    Each
      Guarantor further agrees that its Guarantee herein shall continue to be
      effective or be reinstated, as the case may be, if at any time payment, or
      any
      part thereof, of principal of or interest on any Subordinated Note Obligation
      or
      Guarantee’s obligations is rescinded or must otherwise be restored by any Holder
      or the Trustee upon the bankruptcy or reorganization of the Company, any
      Guarantor 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 any Guarantor by virtue
      hereof, upon the failure of the Company to pay the principal of or interest
      on
      any Subordinated Note Obligation when and as the same shall become due, whether
      at maturity, by acceleration, by redemption or otherwise, or to perform or
      comply with any other obligation, each Guarantor hereby promises to and shall,
      upon receipt of written demand by the Trustee, forthwith pay, or cause to be
      paid, in cash, to the Holders or the Trustee an amount equal to the sum of
      (A)
      the unpaid amount of such obligations, (B) accrued and unpaid interest on such
      obligations (but only to the extent not prohibited by law) and (C) all other
      monetary obligations of the Company to the Holders and/or the
      Trustee.

     

    Each
      Guarantor agrees that, as between it, on the one hand, and the Holders and
      the
      Trustee, on the other hand, (i) the maturity of the Subordinated Note
      Obligations Guaranteed hereby may be accelerated as provided in Section
      7.02
      for the
      purposes of such Guarantor’s Guarantee herein, notwithstanding any stay,
      injunction or other prohibition preventing such acceleration in respect of
      the
      obligations guaranteed hereby, and (ii) in the event of any declaration of
      acceleration of such obligations as provided in Section
      7.02,
      such
      obligations (whether or not due and payable) shall forthwith become due and
      payable by such Guarantor for the purposes of this Section
      11.01.

     

    Each
      Guarantor also agrees to pay any and all costs and expenses (including
      reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing
      any rights under this Section.

     

    
      	
              SECTION
                11.02

            	
              Limitation
                of Liability.

            

    

     

    Any
      term
      or provision of this Indenture to the contrary notwithstanding, the maximum
      aggregate amount of the Subordinated Note Obligations guaranteed hereunder
      by
      any Guarantor shall not exceed the maximum amount that can be hereby guaranteed
      without rendering this Indenture, as it relates to such Guarantor, voidable
      under applicable law relating to fraudulent conveyance or fraudulent transfer
      or
      similar laws affecting the rights of creditors generally.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        74

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                11.03

            	
              Successors
                and Assigns.

            

    

     

    This
      Article
      11
      shall be
      binding upon each Guarantor and its successors and assigns and shall enure
      to
      the benefit of the successors and assigns of the Trustee and the Holders and,
      in
      the event of any transfer or assignment of rights by any Holder or the Trustee,
      the rights and privileges conferred upon that party in this Indenture and in
      the
      Subordinated Notes shall automatically extend to and be vested in such
      transferee or assignee, all subject to the terms and conditions of this
      Indenture.

     

    
      	
              SECTION
                11.04

            	
              No
                Waiver.

            

    

     

    Neither
      a
      failure nor a delay on the part of either the Trustee or the Holders in
      exercising any right, power or privilege under this Article
      11
      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
      11
      at law,
      in equity, by statute or otherwise.

     

    
      	
              SECTION
                11.05

            	
              Modification.

            

    

     

    No
      modification, amendment or waiver of any provision of this Article
      11,
      nor the
      consent to any departure by any Guarantor therefrom, shall in any event be
      effective unless the same shall be in writing and signed by the Trustee, and
      then such waiver or consent shall be effective only in the specific instance
      and
      for the purpose for which given. No notice to or demand on any Guarantor in
      any
      case shall entitle such Guarantor to any other or further notice or demand
      in
      the same, similar or other circumstances.

     

    
      	
              SECTION
                11.06

            	
              Release.

            

    

     

    A
      Guarantor shall be released from its obligations under this Article
      11
      (other
      than any obligation that shall have arisen under Section
      11.07):

     

    (a) upon
      the
      sale or disposition of a Guarantor (as an entirety) (whether by way of merger,
      consolidation, sale or other disposition of all of the assets of such Guarantor,
      sale or other disposition of all of the Equity Interests of such Guarantor
      or
      otherwise) other than a transaction that constitutes a sale of all or
      substantially all of the assts of the Company so as to trigger a Change of
      Control, to a Person that is not (either before or after giving effect to such
      transactions) the Company or a Guarantor;

     

    (b) upon
      the
      designation of such Guarantor as an Unrestricted Subsidiary in accordance with
      the terms of this Indenture; or

     

    (c) upon
      defeasance of the Subordinated Notes.

     

    provided,
      however,
      that in
      the case of clause (a) above, such sale or other disposition is made to a Person
      other than the Company or an Affiliate. At the request of the Company, the
      Trustee shall execute and deliver an appropriate instrument evidencing such
      release. Any Guarantor not released from its obligations under its Guarantee
      shall remain liable for the full amount of principal of and interest on the
      Subordinated Notes, all of the Subordinated Notes Obligations and for the other
      obligations of any Guarantor under this Indenture as provided in this
Article
      11.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                11.07

            	
              Contribution.

            

    

     

    Each
      Guarantor that makes a payment under its Guarantee shall be entitled upon
      payment in full of all guarantied obligations under this Indenture to a
      contribution from each other Guarantor in an amount equal to such other
      Guarantor’s pro rata portion of such payment based on the respective net assets
      of all the Guarantors at the time of such payment determined in accordance
      with
      GAAP.

     

    ARTICLE
      12

     

    COLLATERAL
      AND SECURITY

     

    
      	
              SECTION
                12.01

            	
              Collateral
                Documents.

            

    

     

    The
      due
      and punctual payment of the principal of and interest on the Subordinated Notes
      when and as the same shall be due and payable, whether on an Interest Payment
      Date, at maturity, by acceleration, repurchase, redemption or otherwise, and
      interest on the overdue principal of and interest on the Subordinated Notes
      and
      performance of all other Subordinated Note Obligations of the Company and the
      Guarantors to the Holders or the Trustee under this Indenture, the Subordinated
      Notes and the Guarantees, according to the terms hereunder or thereunder, shall
      be secured as provided in the Subordinated Note Collateral Documents which
      the
      Company and the Guarantors shall enter into on the Issue Date, together with
      such changes as may be reasonably necessary to accurately reflect the Collateral
      referred to therein, and which the Company and the Guarantors may enter into
      on
      or after the Issue Date in accordance with the terms hereof. Each Holder
      authorizes the Trustee to initially act as Collateral Agent for the Holders
      under the Subordinated Note Collateral Documents. Each Holder, by its acceptance
      thereof, consents and agrees to the terms of the Subordinated Note Collateral
      Documents and the Intercreditor Agreement (including, without limitation, the
      provisions providing for foreclosure and release of Collateral) as the same
      may
      be in effect or may be amended from time to time in accordance with its terms
      and the terms of this Indenture and authorizes and directs the Collateral Agent
      to enter into the Subordinated Note Collateral Documents and the Intercreditor
      Agreement and to perform its obligations and exercise its rights thereunder
      in
      accordance therewith. The Company and the Guarantors shall deliver to the
      Collateral Agent copies of all documents executed pursuant to this Indenture
      or
      the Subordinated Note Collateral Documents and shall do or cause to be done
      all
      such acts and things as may be necessary or proper, or as may be required by
      the
      provisions of the Subordinated Note Collateral Documents, to assure and confirm
      to the Collateral Agent the security interest in the Collateral contemplated
      hereby, by the Subordinated Note Collateral Documents or any part thereof,
      as
      from time to time constituted, so as to render the same available for the
      security and benefit of this Indenture and of the Subordinated Notes and the
      Guarantees secured hereby, according to the intent and purposes herein
      expressed. 

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        76

        
          

        

      

      
        
        

      

    

    The
      Company shall, and shall cause its Restricted Subsidiaries to, at its own
      expense, take all reasonable actions (i) that are requested by the Trustee
      or
      the Collateral Agent, or (ii) that an Officer of the Company has knowledge
      are
      necessary as a legal matter, in either case of (i) or (ii), as required to
      establish, maintain and perfect a security interest in and continuing Lien
      on
      all of the Collateral, in favor of the Collateral Agent for the benefit of
      the
      Holders, superior to and prior to the rights of all third Persons, except for
      holders of Priority Lien Obligations, and subject to no Liens other than
      Permitted Liens. Without limiting the generality of the foregoing, the Company
      shall execute or cause to be executed by their Restricted Subsidiaries and
      shall
      file or cause to be filed such financing statements, continuation statements,
      and fixture filings and such mortgages, or deeds of trust in all places
      necessary to establish, maintain and perfect the Liens purported to be provided
      for in the Subordinated Note Collateral Documents. 

     

    
      	
              SECTION
                12.02

            	
              Recording
                of Opinions.

            

    

     

    The
      Company and the Guarantors shall furnish to the Trustee no later than December
      31st in each year beginning with December 31, 2008, an Opinion of Counsel,
      dated
      as of such date, either: 

     

    (a) stating
      that, in the opinion of such counsel, action has been taken with respect to
      the
      recording, registering, filing, re-recording, re-registering and re-filing
      of
      all supplemental indentures, financing statements, continuation statements
      or
      other instruments of further assurance as is necessary to maintain the Lien
      of
      the Subordinated Note Collateral Documents and reciting with respect to the
      security interest in the Collateral the details of such action or referring
      to
      prior Opinions of Counsel in which such details are given, 

     

    (b) stating
      that, in the opinion of such counsel, based on relevant laws as in effect on
      the
      date of such Opinion of Counsel, all financing statements and continuation
      statements have been executed and filed that are necessary as of such date
      and
      during the succeeding 12 months fully to preserve and protect, to the extent
      such protection and preservation are possible by filing, the rights of the
      Holders, the Collateral Agent and the Trustee hereunder and under the
      Subordinated Note Collateral Documents with respect to the security interest
      in
      the Collateral; or 

     

    (c) stating
      that, in the opinion of such counsel, no such action is necessary to maintain
      such Lien. 

     

    The
      Company will otherwise comply with the provisions of TIA §314(b).

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                12.03

            	
              Release
                of Collateral.

            

    

     

    (a) Subject
      to subsections (b), (c) and (d) of this Section
      12.03
      and the
      Intercreditor Agreement, Collateral may be released from the Lien and security
      interest created by the Subordinated Note Collateral Documents at any time
      or
      from time to time in accordance with the provisions of the Subordinated Note
      Collateral Documents, the Intercreditor Agreement or as provided hereby. In
      addition, subject to the terms of the Intercreditor Agreement, upon the request
      of the Company pursuant to an Officers’ Certificate certifying that all
      conditions precedent under the Indenture have been met, then (at the sole cost
      and expense of the Company) the Collateral Agent shall release (or cause to
      be
      released) Subordinated Note Collateral that is sold, conveyed or disposed of
      in
      compliance with the provisions of this Indenture; provided,
      the
      Company will apply any Net Proceeds in compliance with Section
      4.11.
      Upon
      receipt of such Officers’ Certificate the Collateral Agent shall promptly
      execute, deliver or acknowledge any necessary or proper instruments of
      termination, satisfaction or release to evidence the release of any Collateral
      permitted to be released pursuant to this Indenture, the Subordinated Note
      Collateral Documents or the Intercreditor Agreement. 

     

    (b) No
      Collateral may be released from the Lien and security interest created by the
      Subordinated Note Collateral Documents pursuant to the provisions of the
      Subordinated Note Collateral Documents and the Intercreditor Agreement unless
      the certificate required by this Section
      12.03
      has been
      delivered to the Collateral Agent. 

     

    (c) At
      any
      time when a Default or Event of Default has occurred and is continuing and
      the
      maturity of the Subordinated Notes has been accelerated (whether by declaration
      or otherwise) and the Trustee shall have delivered a notice of acceleration
      to
      the Collateral Agent, no release of Collateral pursuant to the provisions of
      the
      Subordinated Note Collateral Documents and the Intercreditor Agreement will
      be
      effective as against the Holders. 

     

    (d) The
      release of any Subordinated Note Collateral from the terms of this Indenture,
      the Subordinated Note Collateral Documents and the Intercreditor Agreement
      shall
      not be deemed to impair the security under this Indenture in contravention
      of
      the provisions hereof if and to the extent the Subordinated Note Collateral
      is
      released pursuant to the terms of the Subordinated Note Collateral Documents,
      this Indenture and the Intercreditor Agreement. To the extent applicable, the
      Company shall cause TIA § 313(b), relating to reports, and TIA § 314(d),
      relating to the release of property or securities from the Lien and security
      interest of the Subordinated Note Collateral Documents and relating to the
      substitution therefor of any property or securities to be subjected to the
      Lien
      and security interest of the Subordinated Note Collateral Documents, to be
      complied with. Any certificate or opinion required by TIA § 314(d) may be made
      by an Officer of the Company except in cases where TIA § 314(d) requires that
      such certificate or opinion be made by an independent Person, which Person
      shall
      be an independent engineer, appraiser or other expert selected or approved
      by
      the Trustee and the Collateral Agent in the exercise of reasonable
      care.

     

    (e) Notwithstanding
      anything contained herein to the contrary, in the event that Expansion Debt
      is
      incurred pursuant to the terms of this Indenture, then Trustee or the Collateral
      Agent agrees to release the security interest in the Secondary Equipment (as
      defined in the Subordinated Note Security Agreement) and Secondary Inventory
      (as
      defined in the Subordinated Note Security Agreement) not comprising the Oil
      Rig
      Related Assets and, if required by the subsequent lender, the Stock Rights
      (as
      defined in the Subordinated Note Security Agreement) but only to the extent
      related to the Secondary Equipment and Secondary Inventory being released.
      

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                12.04

            	
              Certificates
                of the Company.

            

    

     

    (a) The
      Company shall furnish to the Trustee and the Collateral Agent, prior to each
      proposed release of Subordinated Note Collateral pursuant to the Subordinated
      Note Collateral Documents and the Intercreditor Agreement: 

     

    (1) all
      documents required by TIA §314(d); and 

     

    (2) an
      Opinion of Counsel, which may be rendered by internal counsel to the Company
      to
      the effect that such accompanying documents constitute all documents required
      by
      TIA §314(d). 

     

    (b) The
      Trustee, to the extent permitted by Article 7 hereof, and the Collateral Agent
      may accept as conclusive evidence of compliance with the foregoing provisions
      the appropriate statements contained in such documents and such Opinion of
      Counsel. 

     

    (c) Notwithstanding
      anything to the contrary in this Section
      12.04,
      the
      Company shall not be required to comply with all or any portion of TIA §314(d)
      if it determines, in good faith based on advice of counsel, that under the
      terms
      of TIA §314(d) and/or any interpretation or guidance as to the meaning thereof
      of the SEC or its staff, including “no action” letters or exemptive orders, all
      or any portion of TIA §314(d) is inapplicable to one or a series of releases of
      Collateral or the SEC will not take any action against the Company for failure
      to comply with, or that the Company is exempt from, all or any portion of TIA
      §314(d). 

     

    
      	
              SECTION
                12.05

            	
              Certificates
                of the Trustee.

            

    

     

    In
      the
      event that the Company wishes to release Subordinated Note Collateral in
      accordance with the Subordinated Note Collateral Documents and the Intercreditor
      Agreement and has delivered the certificates and documents required by the
      Subordinated Note Collateral Documents, the Intercreditor Agreement and
Sections
      12.03
      and
12.04
      hereof,
      the Trustee will determine whether it has received all documentation required
      by
      TIA §314(d) in connection with such release.

     

    
      	
              SECTION
                12.06

            	
              Authorization
                of Actions to be Taken by the Trustee and the Collateral Agent under
                the
                Subordinated
                Note Collateral Documents.

            

    

     

    Subject
      to the provisions of Sections
      8.01
      and
8.02
      hereof,
      the Trustee may, in its sole discretion and without the consent of the Holders,
      direct, on behalf of the Holders, the Collateral Agent to take all actions
      it
      deems necessary or appropriate in order to: 

     

    (a) enforce
      any of the terms of the Subordinated Note Collateral Documents and the
      Intercreditor Agreement; and 

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

    (b) collect
      and receive any and all amounts payable in respect of the Subordinated Note
      Obligations of the Company and the Guarantors hereunder and under the
      Subordinated Notes and the Guarantees. 

     

    The
      Collateral Agent shall have the power to institute and maintain such suits
      and
      proceedings as it may deem expedient to prevent any impairment of the
      Subordinated Note Collateral by any acts that may be unlawful or in violation
      of
      the Subordinated Note Collateral Documents, this Indenture or the Intercreditor
      Agreement, and such suits and proceedings as the Collateral Agent may deem
      expedient to preserve or protect its interests and the interests of the Holders
      in the Subordinated Note Collateral (including power to institute and maintain
      suits or proceedings to restrain the enforcement of, or compliance with, any
      legislative or other governmental enactment, rule or order that may be
      unconstitutional or otherwise invalid if the enforcement of, or compliance
      with,
      such enactment, rule or order would impair the security interest hereunder
      or be
      prejudicial to the interests of the Holders or of the Collateral
      Agent).

     

    
      	
              SECTION
                12.07

            	
              Authorization
                of Receipt of Funds by the Collateral Agent under the Subordinated
                Note Collateral Documents.

            

    

     

    The
      Collateral Agent is authorized to receive any funds for the benefit of the
      Holders distributed under the Subordinated Note Collateral Documents and the
      Intercreditor Agreement, and to make further distributions of such funds to
      the
      Holders according to the provisions of this Indenture, the Subordinated Note
      Collateral Documents and the Intercreditor Agreement.

     

    
      	
              SECTION
                12.08

            	
              Termination
                of Security Interest.

            

    

     

    Subject
      to the Intercreditor Agreement, upon the full and final payment and performance
      of all Subordinated Note Obligations of the Company and the Guarantors under
      this Indenture, the Subordinated Notes and the Guarantees or in connection
      with
      the discharge of all Obligations under the Subordinated Notes, the Guarantees
      and this Indenture as described under Article
      9
      and
Article
      13
      (including a release of Guarantees under Section
      11.05
      hereunder or designation of a Restricted Subsidiary as an Unrestricted
      Subsidiary in accordance with the terms of this Indenture), the Trustee shall,
      at the request of the Company, deliver an Officers’ Certificate to the
      Collateral Agent stating that such Subordinated Note Obligations have been
      paid
      in full or discharged, as the case may be, and instruct the Collateral Agent
      to
      release the Liens pursuant to this Indenture and the Subordinated Note
      Collateral Documents.

     

    
      	
              SECTION
                12.09

            	
              Conflicts
                between Indenture and Subordinated
                Note Collateral Documents.

            

    

     

    If
      any
      conflict or inconsistency exists between this Indenture and any of the
      Subordinated Note Collateral Documents, this Indenture shall govern;
provided,
      however,
      that to
      the extent a Collateral Document is governed by a law other than the internal
      laws of the State of Texas, this Indenture shall not require that the internal
      laws of the State of Texas govern such Oil Rig Related Assets.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

    ARTICLE
      13

     

    SATISFACTION
      AND DISCHARGE

     

    
      	
              SECTION
                13.01

            	
              Satisfaction
                and Discharge.

            

    

     

    This
      Indenture will be discharged and will cease to be of further effect as to all
      Subordinated Notes and Guarantees issued hereunder, when either: 

     

    (a) all
      such
      Subordinated Notes theretofore authenticated and delivered, except lost, stolen
      or destroyed Subordinated Notes which have been replaced or paid and
      Subordinated Notes for whose payment money has theretofore been deposited in
      trust, have been delivered to the Trustee for cancellation; or 

    

    (b) (i)
      all
      such Subordinated Notes not theretofore delivered to such Trustee for
      cancellation have become due and payable by reason of the mailing of a notice
      of
      redemption or otherwise or will become due and payable within one year and
      the
      Company or any Guarantor has irrevocably deposited or caused to be deposited
      with such Trustee as trust funds in trust solely for the benefit of the Holders,
      cash in U.S. dollars, non-callable Government Securities, or a combination
      thereof, in such amounts as will be sufficient without consideration of any
      reinvestment of interest to pay and discharge the entire Indebtedness on such
      Subordinated Notes not theretofore delivered to the Trustee for cancellation
      for
      principal, premium, if any, and accrued interest to the date of maturity or
      redemption, (ii) the Company has paid or caused to be paid all sums payable
      by
      it under the Indenture and (iii) the Company has delivered irrevocable
      instructions to the Trustee under the Indenture to apply the deposited money
      toward the payment of such Subordinated Notes at maturity or the redemption
      date, as the case may be; and 

     

    in
      the
      case of either clause (a) or (b): 

     

    (x)
      no
      Default or Event of Default has occurred and is continuing on the date of the
      deposit or will occur as a result of the deposit (other than a Default or Event
      of Default resulting from the borrowing of funds to be applied to such deposit)
      and the deposit will not result in a breach or violation of, or constitute
      a
      default under, any other instrument (other than the Indenture) to which the
      Company or any Guarantor is a party or by which the Company or any Guarantor
      is
      bound; and 

     

    (y)
      the
      Company shall have delivered to the Trustee an Officers’ Certificate and Opinion
      of Counsel stating that all conditions precedent relating to the satisfaction
      and discharge of this Indenture have been satisfied. 

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        81

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                13.02

            	
              Deposited
                Cash and U.S. Government Securities to be Held in Trust; Other
                Miscellaneous Provisions.

            

    

     

    Subject
      to Section
      13.03,
      all
      money and Government Securities (including the proceeds thereof) deposited
      with
      the Trustee (or other qualifying trustee, collectively for purposes of this
      Section
      13.02,
      the
“Trustee”)
      pursuant to Section
      13.01
      hereof
      in respect of the outstanding Subordinated Notes shall be held in trust and
      applied by the Trustee, in accordance with the provisions of such Subordinated
      Notes and this Indenture, to the payment, either directly or through any Paying
      Agent (including the Company acting as Paying Agent) as the Trustee may
      determine, to the Holders of the Subordinated Notes of all sums due and to
      become due thereon in respect of principal, premium, if any, and interest but
      such money and Government Securities (including any proceeds thereof) need
      not
      be segregated from other funds except to the extent required by
      law.

     

    
      	
              SECTION
                13.03

            	
              Repayment
                to Company

            

    

     

    Any
      money
      deposited with the Trustee or any Paying Agent, or then held by the Company,
      in
      trust for the payment of the principal of, premium, if any, or interest on,
      any
      Subordinated Note and remaining unclaimed for one year after such principal,
      and
      premium, if any, or interest has become due and payable shall be paid to the
      Company on its request or (if then held by the Company) shall be discharged
      from
      such trust; and the Holder shall thereafter, as a creditor, look only to the
      Company for payment thereof, and all liability of the Trustee or such Paying
      Agent with respect to such trust money, and all liability of the Company as
      trustees thereof, shall thereupon cease; provided, however, that the Trustee
      or
      such Paying Agent, before being required to make any such repayment, may at
      the
      expense of the Company cause to be published once, in The New York Times and
      The
      Wall Street Journal (national edition), notice that such money remains unclaimed
      and that, after a date specified therein, which shall not be less than 30 days
      from the date of such notification or publication, any unclaimed balance of
      such
      money then remaining shall be repaid to the Company.

     

    ARTICLE
      14

     

    MISCELLANEOUS

     

    
      	
              SECTION
                14.01

            	
              Trust
                Indenture Act Controls.

            

    

     

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

     

    
      	
              SECTION
                14.02

            	
              Notices.

            

    

     

    Any
      notice or communication by the Company or the Trustee to the other is duly
      given
      if in writing and delivered in Person or mailed by first class mail (registered
      or certified, return receipt requested), telecopier or overnight air courier
      guaranteeing next day delivery, to the other’s address:

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

    If
      to the
      Company:

     

    Forster
      Drilling Corporation

    2425
      Fountain View Drive

    Suite
      305

    Houston,
      TX 77057

    Attention:
      Fred Forster, III and Bud Navjar

    (713)
      266-8125 (telephone)

    (713)
      266-8024 (facsimile)

    

    With
      a
      copy to:

     

    Thomas
      Pritchard

    Brewer
      & Pritchard, P.C.

    3
      Riverway, Suite 1800

    Houston,
      TX 77056

    (713)
      209-2911 (telephone)

    (713)
      209-2921 (facsimile)

    

    If
      to the
      Trustee:

     

    Bank
      of
      the Ozarks

    Trust
      Department

    12615
      Chenal Parkway

    Little
      Rock, AR 72211

    Attention:
      Shelia Mayden, Senior Vice President

    (501)
      978-2218 (telephone)

    (501)
      978-2237 (facsimile)

     

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

     

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

     

    Any
      notice or communication to a Holder of a Subordinated Note shall be mailed
      by
      first class mail to its address shown on the register kept by the Registrar.
      Any
      notice or communication shall also be so mailed to any Person described in
      TIA
§ 313(c), to the extent required by the TIA. Failure to mail a notice or
      communication to a Holder of a Subordinated Note or any defect in it shall
      not
      affect its sufficiency with respect to other Holders of Subordinated
      Notes.

     

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

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

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

     

    
      	
              SECTION
                14.03

            	
              Communication
                by Holders of Subordinated
                Notes with Other Holders of Subordinated
                Notes.

            

    

     

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

     

    
      	
              SECTION
                14.04

            	
              Certificate
                and Opinion as to Conditions
                Precedent.

            

    

     

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

     

    (a) an
      Officers’ Certificate in form and substance reasonably satisfactory to the
      Trustee (which shall include the statements set forth in Section
      14.05
      hereof)
      stating that, in the opinion of the signers, all conditions precedent and
      covenants, if any, provided for in this Indenture relating to the proposed
      action have been satisfied; and

     

    (b) an
      Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
      (which shall include the statements set forth in Section
      14.05
      hereof)
      stating that, in the opinion of such counsel, all such conditions precedent
      and
      covenants have been satisfied.

     

    
      	
              SECTION
                14.05

            	
              Statements
                Required in Certificate or
                Opinion.

            

    

     

    Each
      certificate or opinion with respect to compliance with a condition or covenant
      provided for in this Indenture (other than a certificate provided pursuant
      to
      TIA § 314(a)(4)) shall include:

     

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

     

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

     

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

     

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

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        84

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                14.06

            	
              Rules
                by Trustee and Agents.

            

    

     

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

     

    
      	
              SECTION
                14.07

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

            

    

     

    No
      director, officer, employee, incorporator or stockholder of the Company or
      any
      Guarantor, as such, shall have any liability for any obligations of the Company
      or any Restricted Subsidiary under the Subordinated Notes or this Indenture
      or
      for any claim based on, in respect of, or by reason of, such obligations or
      their creation. Each Holder of the Subordinated Notes by accepting a
      Subordinated Note waives and releases all such liability. The waiver and release
      are part of the consideration for issuance of the Subordinated Notes. Such
      waiver may not be effective to waive liabilities under United States federal
      securities laws and it is the view of the Commission that such a waiver is
      against public policy.

     

    
      	
              SECTION
                14.08

            	
              Governing
                Law.

            

    

     

    This
      Indenture and the Subordinated Notes shall be governed by the laws of the State
      of Texas excluding (to the greatest extent a New York court would permit) any
      rule of law that would cause application of the laws of any jurisdiction other
      than the State of Texas.

     

    
      	
              SECTION
                14.09

            	
              No
                Adverse Interpretation of Other
                Agreements.

            

    

     

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

     

    
      	
              SECTION
                14.10

            	
              Successors.

            

    

     

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

     

    
      	
              SECTION
                14.11

            	
              Severability.

            

    

     

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

     

    
      	
              SECTION
                14.12

            	
              Counterpart
                Originals.

            

    

     

    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.

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        85

        
          

        

      

      
        
        

      

    

    
      	
              SECTION
                14.13

            	
              Table
                of Contents, Headings, Etc..

            

    

     

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

     

    
      	
              SECTION
                14.14

            	
              Submission
                to Jurisdiction; Waiver Of
                Immunities.

            

    

     

    The
      parties to this Indenture hereby waive irrevocably, to the extent permitted
      by
      law, any objection to the laying of venue in Houston, Texas, and any claim
      of
      inconvenient forum in respect of any such action in Houston, Texas to which
      it
      might otherwise be entitled in any actions arising out of or based on this
      Indenture or the Subordinated Notes.

     

    To
      the
      extent that the Company or any Guarantor has or hereafter may acquire any
      immunity from jurisdiction of any court or from any legal process (whether
      through service of notice, attachment prior to judgment, attachment in aid
      of
      execution, execution or otherwise) with obligations under this Indenture and
      the
      Subordinated Notes or the separate written instrument referenced in the first
      paragraph of this Section
      14.14. 

     

    
      	
              SECTION
                14.15

            	
              Arbitration.

            

    

     

    The
      Holders may elect to resolve any dispute, controversy or claim arising out
      of or
      relating to this Indenture and all agreements and contracts arising therefrom
      by
      arbitration in accordance with the Arbitration Rules of the American Arbitration
      Association. There shall be one arbitrator who shall be selected by agreement
      between the parties but, if the parties are unable to agree on the selection
      of
      an arbitrator within 30 days of the matter being referred to arbitration, then
      the selection of an arbitrator shall be made by the American Arbitration
      Association. The place of the arbitration shall be Houston, Texas and the
      language of the arbitration shall be English. The arbitrator shall have the
      authority to award all forms of relief determined to be just and equitable
      provided that the arbitrator shall have no authority to award punitive or
      exemplary damages, or any other monetary damages not measured by the prevailing
      party’s actual damages. The arbitrator shall be authorized to permit reasonable
      discovery by the parties, and any arbitral award rendered pursuant to this
      provision shall be in writing, shall be final and binding on the parties and
      may
      be enforced in any court of competent jurisdiction.

     

    
      	SECTION14.16	
              No
                Third Party Beneficiaries.

            

    

     

    This
      Indenture is entered solely for the benefit of the parties hereto and the
      Holders of the Subordinated Notes. No other third party beneficiaries are
      created hereby. 

     

    [Signatures
      on following page]

    

      Subordinate
        Note Indenture

    

    
      
        
        

      

      
        86

        
          

        

      

      
        
        

      

    

     

    
      	 	
              FORSTER
                DRILLING CORPORATION

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Fred Forster III

            	 
	 	 	
              Fred
                Forster III

            	 
	 	 	
              Chairman,
                President and CEO

            	 
	 	 	 	 
	 	 	 	 
	 	
              FORSTER
                TOOL & SUPPLY, INC.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
              /s/
                W. Scott Thompson

            	 
	 	 	
              W.
                Scott Thompson

            	 
	 	 	
              Secretary

            	 
	 	 	 	 
	 	 	 	 
	 	
              FORSTER
                DRILLING, INC.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
              /s/
                W. Scott Thompson

            	 
	 	 	
              W.
                Scott Thompson

            	 
	 	 	
              Secretary

            	 
	 	 	 	 
	 	 	 	 
	 	
              FORSTER
                EXPLORATION PRODUCTION, 

              INC.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
              /s/
                W. Scott Thompson

            	 
	 	 	
              W.
                Scott Thompson

            	 
	 	 	
              Secretary

            	 

    

    

      Subordinate
        Note Indenture

    
      
        
        

      

      
        G-1

        
          

        

      

      
        
        

      

    

    

    
      	 	
              BANK
                OF THE OZARKS, as Trustee

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Shelia Mayden

            	 
	 	 	
              Shelia
                Mayden

            	 
	 	 	
              Senior
                Vice President

            	 

    

    

      Subordinate
        Note Indenture

    

     

    
      
        
        

      

      
        G-2EXHIBIT
      10.3

     

    FORSTER
      DRILLING CORPORATION

     

    Senior
      Secured Note due January 15, 2013

     

    US$4,805,000

     

    No.08-01

     

    CUSIP
      No.
      34659W AA0

     

    FORSTER
      DRILLING CORPORATION, and its wholly owned subsidiaries, Forster Drilling,
      Inc.;
      Forster Tool & Supply, Inc.; and Forster Exploration & Production, Inc.,
(collectively,
      the “Company”) promises to pay to Cede & Co., or its registered assigns, the
      principal sum of $4,805,000 on January 15, 2013. Interest Payment Dates: January
      15, April 15, July 15, and October 15 commencing April 15, 2008. Record Dates:
      December 15, March 15, June 15 and September 15 (whether or not a Business
      Day).

     

    Dated:
      January 3, 2008

     

    
      	
              FORSTER
                DRILLING CORPORATION

            
	 	 
	
              By:

            	
                     
                /s/ Fred Forster III

            
	 	
              Fred
                Forster III

            
	 	
              Chairman,
                President and CEO

            

    

     

    Certificate
      of Authentication

     

    This
      is
      one of the Senior Notes referred to in the within-mentioned
      Indenture.

     

    FIRST
      SECURITY BANK

    as
      Trustee

     

    
      	
              By:

            	
                       
                /s/ Frank Faust

            
	 	
              Frank
                Faust, Senior Vice President

            

    

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (Reverse
      of Senior Note)

     

    Senior
      Secured Note due January 15, 2013

     

    Capitalized
      terms used herein have the meanings assigned to them in the Indenture (as
      defined below) unless otherwise indicated.

     

    1. Interest.
      FORSTER
      DRILLING CORPORATION,
      a
      corporation organized under the laws of the State of Nevada, together with
      its
      wholly owned subsidiaries, Forster Drilling, Inc.; Forster Tool & Supply,
      Inc.; and Forster Exploration & Production, Inc. (collectively, the
“Company”), promises to pay interest on the principal amount of this Senior Note
      at the rate and in the manner specified below. Interest shall accrue at the
      rate
      of 10.00% per annum. 

     

    Interest
      will be payable quarterly, in arrears, on January 15, April 15, July 15 and
      October 15 of each year, commencing on April 15, 2008, or if any such day is
      not
      a Business Day on the next succeeding Business Day (each an “Interest Payment
      Date”) to Holders of record of the Senior Notes at the close of business on the
      immediately preceding December 15, March 15, June 15 and September 15, whether
      or not a Business Day. Interest on the Senior Notes will accrue from the most
      recent date to which interest has been paid or, if no interest has been paid,
      from the Issue Date. Interest will be computed on the basis of a 360-day year
      comprised of twelve 30-day months. To the extent lawful, the Company shall
      pay
      interest on overdue principal at the rate equal to 1% (one percent) in excess
      of
      the otherwise then applicable Interest Rate on the Senior Notes; it shall pay
      interest on overdue installments of interest (without regard to any applicable
      grace periods) at the same rate to the extent lawful.

     

    2. Method
      of Payment.
      The
      Company shall pay interest on the Senior Notes (except defaulted interest)
      to
      the Persons who are registered Holders of Senior Notes at the close of business
      on the record date next preceding the Interest Payment Date, even if such Senior
      Notes are cancelled after such record date and on or before such Interest
      Payment Date. The Holder hereof must surrender this Senior Note to a Paying
      Agent to collect principal payments. Principal, premium, if any, and interest,
      on the Senior Notes will be payable at the office or agency of the Company
      maintained for such purpose within Houston, Texas, at the option of the Company,
      payment of interest may be made by check mailed to the Holders of the Senior
      Notes at their respective addresses set forth in the register of Holders of
      Senior Notes; provided
      that all
      payments with respect to Senior Notes the Holders of which have given wire
      transfer instructions to the Company will be required to be made by wire
      transfer of immediately available funds to the accounts specified by the Holders
      thereof. Unless otherwise designated by the Company, the Company’s office or
      agency in Houston, Texas will be the office of the Trustee maintained for such
      purpose.

     

    3. Paying
      Agent and Registrar.
      Initially, the Trustee will act as Paying Agent and Registrar. The Company
      may
      change any Paying Agent, Registrar or co-registrar without prior notice to
      any
      Holder of a Senior Note. The Company may act in any such capacity.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    4. Indenture.
      The
      Company issued the Senior Notes under an Indenture dated as of January 3, 2008
      (the “Indenture”) between the Company, the Subsidiary Guarantors and First
      Security Bank (the “Trustee”). The terms of the Senior Notes include those
      stated in the Indenture and those made part of the Indenture by reference to
      the
      United States Trust Indenture Act of 1939, as amended (15 U.S. Code
§§ 77aaa-77bbbb), as in effect on the date of the Indenture. The Senior
      Notes are subject to all such terms, and Holders of Senior Notes are referred
      to
      the Indenture and such act for a statement of such terms. The terms of the
      Indenture shall govern any inconsistencies between the Indenture and the Senior
      Notes. The Senior Notes are obligations of the Company limited to the sum of
      US$4,805,000 in aggregate principal amount issued on the Issue
      Date.

     

    5. Guarantee.
      The
      Obligations of the Company under the Senior Notes have been guaranteed, jointly
      and severally, by the Restricted Subsidiaries and such other persons that become
      Restricted Subsidiaries after the Issue Date and each of their respective
      successors. The guarantee issued by each Guarantor ranks senior in right and
      priority of payment to all other Indebtedness of such Guarantors.

     

    6. Optional
      Redemption.
      Except
      as set forth in Sections 3.07(b) and 3.10 of the Indenture, the Senior Notes
      will not be redeemable at the Company’s option prior to June 15, 2008.
      Thereafter, the Senior Notes will be subject to redemption at the option of
      the
      Company, in whole or in part, upon not less than 30 nor more than 60 days’
notice to the holders thereof, at the redemption price equal to 100% of the
      principal amount plus accrued and unpaid interest thereon to the applicable
      redemption date

     

    7. Mandatory
      Redemption.
      The
      Company will make mandatory redemption or sinking fund payments with respect
      to
      the Senior Notes only as required pursuant to the Indenture.

     

    8. Repurchase
      at Option of Holder.
      If a
      Change of Control occurs, the Company shall make an offer (the “Change
      of Control Offer”)
      to
      each of the Holders of Senior Notes to repurchase all or any part (equal to
      $5,000 or an integral multiple of $5,000) of that Holder’s Senior Notes pursuant
      to the Change of Control Offer at a purchase price, in cash, equal to 100%
      of
      the aggregate principal amount of Senior Notes repurchased, plus accrued and
      unpaid interest on the Senior Notes repurchased, to the Purchase Date (the
      “Change
      of Control Payment”)
      (subject to the right of Holders of record on the relevant Regular Record Date
      to receive interest due on the relevant Interest Payment Date).

     

    (a) Within
      30
      days following any Change of Control, the Company shall mail a notice of such
      Change of Control Offer by first class mail, postage prepaid, to each Holder
      describing the transaction or transactions that constitute the Change of Control
      and stating: 

     

    (i) that
      the
      Change of Control Offer is being made pursuant to Section
      3.10
      of the
      Indenture and that all Senior Notes tendered shall be accepted for payment;
      

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

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

     

    (iii) that
      any
      Senior Note not tendered shall remain outstanding and continue to accrue
      interest; 

     

    (iv) that,
      unless the Company defaults in the payment of the Change of Control Payment,
      all
      Senior Notes accepted for payment pursuant to the Change of Control Offer shall
      cease to accrue interest after the Change of Control Payment Date; 

     

    (v) that
      Holders electing to have any Senior Notes purchased pursuant to a Change of
      Control Offer shall be required to surrender the Senior Notes, with the form
      entitled “Option of Holder to Elect Purchase” on the reverse of the Senior Notes
      completed, to the Paying Agent at the address specified in the notice prior
      to
      the close of business on the third Business Day preceding the Change of Control
      Payment Date; 

     

    (vi) that
      Holders shall be entitled to withdraw their election if the Paying Agent
      receives, not later than the close of business on the second Business Day
      preceding the Change of Control Payment Date, a written communication setting
      forth the name of the Holder, the principal amount of Senior Notes delivered
      for
      purchase, and a statement that such Holder is withdrawing his election to have
      such Senior Notes purchased; and 

     

    (vii) that
      Holders whose Senior Notes are being purchased only in part shall be issued
      new
      Senior Notes equal in principal amount to the unpurchased portion of the Senior
      Notes surrendered. 

     

    (b) So
      long
      as the Senior Notes are in global form, if the Company makes an offer to
      purchase all of the Senior Notes pursuant to a Change of Control Offer, a Holder
      may exercise its option to elect for the purchase of Senior Notes through the
      facilities of the Depository, subject to its rules and regulations.

     

    (c) On
      the
      Change of Control Payment Date, the Company shall, to the extent lawful:

     

    (i) accept
      for payment all Senior Notes or portions thereof properly tendered pursuant
      to
      the Change of Control Offer; 

     

    (ii) prior
      to
      11:00 a.m. (New York City time) on such date, deposit with the Paying Agent
      an
      amount equal to the Change of Control Payment in respect of all Senior Notes
      or
      portions of Senior Notes properly tendered; and 

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (d) The
      Paying Agent shall promptly mail to each Holder of Senior Notes properly
      tendered the Change of Control Payment for such Senior Notes, and the Trustee
      shall promptly authenticate and mail (or cause to be transferred by book entry)
      to each Holder a new Senior Note equal in principal amount to any unpurchased
      portion of the Senior Notes surrendered, if any. The Company shall publicly
      announce the results of the Change of Control Offer on or as soon as practicable
      after the Change of Control Payment Date. 

     

    (e) Notwithstanding
      anything to the contrary in the Indenture, the Company shall 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 the Indenture and purchases all
      Senior Notes validly tendered and not withdrawn under the Change of Control
      Offer. A Change of Control Offer may be made in advance of a Change of Control,
      conditional upon such Change of Control, if a definitive agreement is in place
      for the Change of Control at the time of making the Change of Control Offer.
      

     

    9. Notice
      of Redemption.
      Subject
      to the provisions of the Indenture, at least 30 days but not more than 60 days
      before a redemption date, the Company shall mail or cause to be mailed, by
      first
      class mail, a notice of redemption to each Holder of record as of the record
      date therefor of the Senior Notes that are to be redeemed at its registered
      address.

     

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

     

    (a) the
      redemption date;

     

    (b) the
      redemption price;

     

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

     

    (d) the
      name
      and address of the paying agent;

     

    (e) that
      Senior Notes called for redemption must be surrendered to the paying agent
      to
      collect the redemption price;

     

    (f) that,
      unless the Company defaults in making such redemption payment, interest on
      Senior Notes (or portions thereof) called for redemption ceases to accrue on
      and
      after the redemption date;

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

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

     

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

     

    At
      the
      Company’s request, the Trustee shall give the notice of redemption in the
      Company’s name and at its expense, provided,
      however,
      that
      the Company shall have delivered to the Trustee, at least 45 days prior to
      the
      redemption date, an Officers’ Certificate requesting that the Trustee give such
      notice.

     

    10. Denominations,
      Transfer, Exchange.
      The
      Senior Notes are in registered form without coupons in denominations of US$5,000
      and integral multiples of US$5,000. The transfer of Senior Notes may be
      registered and Senior Notes may be exchanged as provided in the Indenture.
      The
      Registrar and the Trustee may require a Holder of a Senior Note, among other
      things, to furnish appropriate endorsements and transfer documents and the
      Company may require a Holder of a Senior Note to pay any taxes and fees required
      by law or permitted by the Indenture. Neither the Company nor the Registrar
      need
      exchange or register the transfer of any Senior Note or portion of a Senior
      Note
      selected for redemption. Also, neither the Company nor the Registrar need issue,
      exchange or register the transfer of any Senior Notes for a period of 15 days
      before a selection of Senior Notes to be redeemed.

     

    11. Persons
      Deemed Owners.
      Prior
      to due presentment to the Trustee for registration of a transfer of this Senior
      Note, the Trustee, any Agent and the Company may deem and treat the Person
      in
      whose name this Senior Note is registered as its absolute owner for the purpose
      of receiving payment of principal of and interest on this Senior Note and for
      all other purposes whatsoever, whether or not this Senior Note is overdue,
      and
      neither the Trustee, any Agent nor the Company shall be affected by notice
      to
      the contrary. 

    12. Amendments,
      Supplement and Waivers.
      Subject
      to certain exceptions, the Indenture, the Senior Notes or any amended or
      supplemental Indenture may be amended or supplemented with the written consent
      of the Holders of at least a majority in aggregate principal amount of the
      Senior Notes then outstanding (including consents obtained in connection with
      a
      tender offer or exchange offer for Senior Notes), and any existing Default
      or
      compliance with any provision of the Indenture, the Senior Notes or any document
      related thereto may be waived with the consent of the Holders of at least a
      majority in principal amount of the then outstanding Senior Notes (including
      consents obtained in connection with a tender offer or exchange offer for Senior
      Notes). Without the consent of any Holder of a Senior Note, the Indenture or
      the
      Senior Notes may be amended or supplemented to cure any ambiguity, defect or
      inconsistency, to provide for uncertificated Senior Notes in addition to or
      in
      place of certificated Senior Notes; to provide for the assumption of the
      Company’s obligations to Holders of the Senior Notes in case of a merger or
      consolidation; to make any change that would provide any additional rights
      or
      benefits to the Holders of the Senior Notes or that does not adversely affect
      the legal rights under the Indenture of any such Holder; to add any Guarantee
      with respect to the Senior Notes, including any Subsidiary Guarantees or to
      secure the Senior Notes or to comply with the requirements of the Commission
      in
      order to effect or maintain the qualification of the Indenture under the TIA.
      However, without the consent of each Holder affected, an amendment or waiver
      may
      not (with respect to any Senior Notes held by a non-consenting Holder of Senior
      Notes) reduce the principal amount of Senior Notes whose Holders must consent
      to
      an amendment, supplement or waiver; reduce the principal of or change the fixed
      maturity of any Senior Note or alter the provisions with respect to the
      redemption of the Senior Notes; reduce the rate of or change the time for
      payment of interest on any Senior Note; waive a Default or Event of Default
      in
      the payment of principal of or premium, if any, or interest on, the Senior
      Notes
      (except a rescission of acceleration of the Senior Notes by the Holders of
      at
      least a majority in aggregate principal amount of the then outstanding Senior
      Notes and a waiver of the payment default that resulted from such acceleration);
      make any Senior Note payable in money other than that stated in the Senior
      Notes; make any change in the provisions of the Indenture relating to waivers
      of
      past Defaults or the rights of Holders of Senior Notes to receive payments
      of
      principal of, premium, if any, or interest on, any Senior Note; waive a
      redemption payment with respect to any Senior Note (other than a payment
      required by Section
      3.09
      of the
      Indenture); or change in the foregoing amendment and waiver
      provisions.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    13. Defaults
      and Remedies.
      Events
      of Default include: (i) default for 30 days in the payment when due of interest
      on the Senior Notes; (ii) default in payment when due (whether at maturity,
      upon
      redemption or repurchase, or otherwise) of principal or premium, if any, on
      the
      Senior Notes; (iii) failure by the Company to comply with the provisions
      described under Section 5.01 of the Indenture; (iv) failure by the Company
      or any of its Restricted Subsidiaries for thirty days after notice to comply
      with any of their other covenants in the Indenture or the Senior Notes or any
      other document related thereto; (v) default under any mortgage, pledge,
      indenture or instrument under which there may be issued or by which there may
      be
      secured or evidenced any Indebtedness for money borrowed by the Company or
      any
      of its Restricted Subsidiaries (or the payment of which is guaranteed by the
      Company or any of its Restricted Subsidiaries), whether such Indebtedness or
      guarantee now exists, or is created after the Issue Date, which default is
      caused by a Payment Default, provided such default shall be in an amount or
      aggregate amounts in excess of US $1.0 million excluding debt being paid from
      proceeds of the Senior Notes (a “Payment
      Default”);
      (vi)
      failure by the Company or any of its Restricted Subsidiaries to pay final
      judgments (other than any judgment as to which a reputable insurance Company
      has
      accepted full liability and whose bond, premium or similar charge therefor
      is
      not in excess of US$4.0 million) aggregating in excess of US$4.0 million which
      judgments are not paid, discharged or stayed within 60 days after the date
      on
      which any period of appeal has expired and during which a stay of enforcement
      of
      such judgment shall not be in effect; (vii) if the Company or any Restricted
      Subsidiary shall be dissolved (other than a technical dissolution of a
      Subsidiary which is cured within sixty (60) days of notice thereof) or
      liquidated (or any judgment, order or decree therefor shall be entered); or
      if a
      creditors’ committee shall have been appointed for the business of the Company
      or any Restricted Subsidiary; or if the Company or any Restricted Subsidiary
      shall have made a general assignment for the benefit of creditors or shall
      have
      been adjudicated bankrupt and if not an adjudication based on a filing made
      by
      the Trustee, it shall not have been dismissed within sixty (60) days, or shall
      have filed a voluntary petition in bankruptcy or for reorganization or to effect
      a plan or arrangement with creditors or shall fail to pay its debts generally
      as
      such debts become due in the ordinary course of business (except as contested
      in
      good faith and for which adequate reserves are made in such party’s financial
      statements); or shall file an answer to a creditor’s petition or other petition
      filed against it, admitting the material allegations thereof for an adjudication
      in bankruptcy or for reorganization; or shall have applied for or permitted
      the
      appointment of a receiver or trustee or custodian for any of its property or
      assets; or such receiver, trustee or custodian shall have been appointed for
      any
      of its property or assets (otherwise than upon application or consent of the
      Company or of any Restricted Subsidiary) and shall not have been removed within
      sixty (60) days; or if an order shall be entered approving any petition for
      reorganization of the Company or any Restricted Subsidiary and shall not have
      been reversed or dismissed within sixty (60) days; if the Company, any of the
      Restricted Subsidiaries or any of the creditors of the Company or any of
      Restricted Subsidiary initiates a mandatory Conciliation Proceeding; or if
      the
      Company or any Restricted Subsidiary shall take any action (corporate or other)
      authorizing or in furtherance any of the actions described in the Indenture;
      or
      (viii) any Guarantee of the Senior Notes by a Subsidiary Guarantor shall be
      held
      in a judicial proceeding to be unenforceable or invalid or any Guarantor, or
      chief executive officer of such Subsidiary Guarantor shall deny or disaffirm
      its
      obligations under its Guarantee of any Senior Notes. 

     

    If
      any
      Event of Default occurs and is continuing with respect to the Indenture and
      the
      Senior Notes, the Trustee or the Holders of at least 25% of the aggregate
      principal amount of the then outstanding Senior Notes may declare all the Senior
      Notes to be due and payable immediately. Upon such declaration, the principal
      of, premium, if any, and accrued and unpaid interest on the Senior Notes shall
      be due and payable immediately. Notwithstanding the foregoing, in the case
      of an
      Event of Default arising from certain events of bankruptcy or insolvency or
      in
      the event the Company fails to make any payment when due under clauses (i)
      and
      (ii) with respect to the Company or any of its Restricted Subsidiaries, the
      foregoing amount shall be due
      and
      payable without further action or notice. Holders of the Senior Notes may not
      enforce the Indenture or the Senior Notes except as provided in the Indenture.
      Subject to certain limitations, Holders of a majority in principal amount of
      the
      then outstanding Senior Notes may direct the Trustee in its exercise of any
      trust or power. The Trustee may withhold from Holders of the Senior Notes notice
      of any continuing Default or Event of Default (except a Default or Event of
      Default relating to the payment of principal or interest) if it determines
      that
      withholding notice is in the best interest of such Holder. The Holders of not
      less than a majority in aggregate principal amount of the then outstanding
      Senior Notes, by notice to the Trustee may, on behalf of the Holders of all
      of
      the Senior Notes, waive any existing Default or Event of Default and its
      consequences under the Indenture except a continuing Default or Event of Default
      in the payment of principal of, premium, if any, or interest on the Senior
      Notes. The Company is required to deliver to the Trustee annually a statement
      regarding compliance with the Indenture, and the Company is required upon
      becoming aware of any Default or Event of Default to deliver to the Trustee
      a
      statement specifying such Default or Event of Default and what action the
      Company is taking or proposes to take with respect thereto.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    14. Trustee
      Dealings with Company.
      The
      Trustee under the Indenture, in its individual or any other capacity, may become
      the owner or pledgee of Senior Notes, and may otherwise deal with the Company
      or
      its Affiliates with the same rights as if it were not Trustee; however, in
      the
      vent that the Trustee acquires any conflicting interest it must eliminate such
      conflict within 90 days, apply to the Commission for permission to continue
      as Trustee or resign.

     

    15. No
      Personal Liabilities of Directors, Officers, Employees and
      Stockholders.
      No
      director, officer, employee, incorporator or stockholder of the Company or
      any
      Guarantor, as such, shall have any liability for any obligations of the Company
      under the Senior Notes or the Indenture or for any claim based on, in respect
      of, or by reason of, such obligations or their creation. Each Holder of the
      Senior Notes by accepting a Senior Note waives and releases all such liability.
      The waiver and release are part of the consideration for issuance of the Senior
      Notes. Such waiver may not be effective to waive liabilities under the United
      States federal securities laws and it is the view of the Commission that such
      waiver is against public policy.

     

    16. Authentication.
      This
      Senior Note shall not be valid until authenticated by the manual signature
      of an
      authorized signatory of the Trustee of the Trustee.

     

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

     

    18. CUSIP
      Numbers.
      The
      Company has caused CUSIP numbers to be printed on the Senior Notes and has
      directed the Trustee to use CUSIP numbers in notices of redemption or exchange
      as a convenience to Holders of Senior Notes. No representation is made as to
      the
      correctness or accuracy of such numbers either as printed on the notice or
      on
      the Senior Notes and reliance may be placed only on the other identification
      numbers printed on the Senior Notes and, any redemption shall not be affected
      by
      any defect in or omission of such numbers.

     

    The
      Company will furnish to any Holder of a Senior Note upon written request and
      without charge a copy of the Indenture. Request may be made to:

     

    FIRST
      SECURITY BANK, as Trustee

    314
      N.
      Spring Street

    Searcy,
      AR 72143

    Attention:
      Trust Department

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    ASSIGNMENT
      FORM

     

    To
      assign
      this Senior Note, fill in the form below: (I) or (we) assign and transfer this
      Senior Note to

     

    

      
        	 
	
                (Insert
                  assignee’s social security or tax I.D. no.)

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

              

      

    

     

    and
      irrevocably appoint
      _______________________________________________________________ agent to
      transfer this Senior Note on the books of the Company. The agent may substitute
      another to act for him or her.

     

    ________________________________________________________________________________________________________

     

    
      	
              Date:

            	 	 	
              Your Signature:

            	 
	 	 	 	
              (Sign
                exactly as your name appears on the face of this Senior
                Note)

            

    

     

    Signature
      Guaranty.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    OPTION
      OF
      HOLDER TO ELECT PURCHASE

     

    If
      you
      want to elect to have all or any part of this Senior Note purchased by the
      Company pursuant to Section 3.09 of the Indenture, check the box: o

     

    If
      you
      want to have only part of the Senior Note purchased by the Company pursuant
      to
      Section 3.09 or Section 3.10 of the Indenture, state the amount you elect to
      have purchased:

     

    US$______  

     

    Date:______  

     

    
      	
              Your Signature:
                

            	 
	
              (Sign
                exactly as your name appears on the face of this Senior
                Note.)

            

    

    

    Signature
      Guaranty.

     

    
      
        
        

      

      
        10

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