Document:

Exhibit 10.41

EXECUTION COPY

PURCHASE AND SALE AGREEMENT

BY AND AMONG

ANADARKO PETROLEUM CORPORATION,

ANADARKO E&P COMPANY LP,

HOWELL PETROLEUM CORPORATION AND

KERR-MCGEE OIL & GAS ONSHORE LP

AS SELLER

AND

EXCO RESOURCES, INC.

AS PURCHASER

Executed on February 1, 2007

 

 

TABLE OF
CONTENTS

	
  

  	
   

  	
  PAGE

  
	
  ARTICLE 1 PURCHASE AND SALE

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1      Purchase and Sale.

  	
   

  	
  1

  
	
  Section 1.2      Assets.

  	
   

  	
  1

  
	
  Section 1.3      Excluded Assets.

  	
   

  	
  3

  
	
  Section 1.4      Effective Time; Proration of Costs
  and Revenues.

  	
   

  	
  4

  
	
  Section 1.5      Delivery and Maintenance of Records.

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 PURCHASE PRICE

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 2.1      Purchase
  Price.

  	
   

  	
  6

  
	
  Section 2.2      Adjustments
  to Purchase Price.

  	
   

  	
  6

  
	
  Section 2.3      Allocation
  of Purchase Price for Tax Purposes

  	
   

  	
  7

  
	
  Section 2.4      Deposit

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 TITLE MATTERS

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 3.1      Seller’s Title.

  	
   

  	
  8

  
	
  Section 3.2      Definition of Defensible Title.

  	
   

  	
  8

  
	
  Section 3.3      Definition of Permitted
  Encumbrances.

  	
   

  	
  10

  
	
  Section 3.4      Notice of Title Defect
  Adjustments.

  	
   

  	
  11

  
	
  Section 3.5      Casualty or Condemnation Loss.

  	
   

  	
  14

  
	
  Section 3.6      Limitations on Applicability.

  	
   

  	
  15

  
	
  Section 3.7      Government Approvals Respecting
  Assets.

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 ENVIRONMENTAL MATTERS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 4.1      Assessment.

  	
   

  	
  16

  
	
  Section 4.2      NORM, Wastes and Other
  Substances.

  	
   

  	
  17

  
	
  Section 4.3      Environmental Defects.

  	
   

  	
  18

  
	
  Section 4.4      Inspection Indemnity.

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF
  SELLER

  	
   

  	
  19

  
	
  Section 5.1      Generally.

  	
   

  	
  19

  
	
  Section 5.2      Existence and Qualification.

  	
   

  	
  19

  
	
  Section 5.3      Power.

  	
   

  	
  20

  
	
  Section 5.4      Authorization and Enforceability.

  	
   

  	
  20

  
	
  Section 5.5      No Conflicts.

  	
   

  	
  20

  
	
  Section 5.6      Liability for Brokers’ Fees.

  	
   

  	
  20

  
	
  Section 5.7      Litigation.

  	
   

  	
  20

  
	
  Section 5.8      Taxes and Assessments.

  	
   

  	
  21

  
	
  Section 5.9      Compliance with Laws.

  	
   

  	
  21

  
	
  Section 5.10    Contracts.

  	
   

  	
  21

  
	
  Section 5.11    Payments
  for Hydrocarbon Production.

  	
   

  	
  21

  

 

 ii
 

 

 

	
  Section 5.12    Governmental
  Authorizations.

  	
   

  	
  22

  
	
  Section 5.13    Preference
  Rights and Transfer Requirements.

  	
   

  	
  22

  
	
  Section 5.14    Payout
  Balances.

  	
   

  	
  22

  
	
  Section 5.15    Outstanding
  Capital Commitments.

  	
   

  	
  22

  
	
  Section 5.16    Imbalances.

  	
   

  	
  22

  
	
  Section 5.17    Condemnation.

  	
   

  	
  23

  
	
  Section 5.18    Bankruptcy.

  	
   

  	
  23

  
	
  Section 5.19    PUHCA/NGA.

  	
   

  	
  23

  
	
  Section 5.20    Investment
  Company.

  	
   

  	
  23

  
	
  Section 5.21    Production
  Allowables.

  	
   

  	
  23

  
	
  Section 5.22    Plugging
  and Abandonment.

  	
   

  	
  24

  
	
  Section 5.23    Foreign
  Person.

  	
   

  	
  24

  
	
  Section 5.24    Collective
  Bargaining Agreements.

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF
  PURCHASER

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 6.1      Existence and Qualification.

  	
   

  	
  24

  
	
  Section 6.2      Power.

  	
   

  	
  24

  
	
  Section 6.3      Authorization and Enforceability.

  	
   

  	
  25

  
	
  Section 6.4      No Conflicts.

  	
   

  	
  25

  
	
  Section 6.5      Liability for Brokers’ Fees.

  	
   

  	
  25

  
	
  Section 6.6      Litigation.

  	
   

  	
  25

  
	
  Section 6.7      Financing.

  	
   

  	
  25

  
	
  Section 6.8      Limitation.

  	
   

  	
  25

  
	
  Section 6.9      SEC Disclosure.

  	
   

  	
  26

  
	
  Section 6.10    Bankruptcy.

  	
   

  	
  26

  
	
  Section 6.11    Qualification.

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 COVENANTS OF THE PARTIES

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 7.1      Access.

  	
   

  	
  26

  
	
  Section 7.2      Government Reviews.

  	
   

  	
  27

  
	
  Section 7.3      Notification of Breaches.

  	
   

  	
  28

  
	
  Section 7.4      Letters-in-Lieu; Assignments;
  Operatorship.

  	
   

  	
  28

  
	
  Section 7.5      Public Announcements.

  	
   

  	
  29

  
	
  Section 7.6      Operation of Business.

  	
   

  	
  29

  
	
  Section 7.7      Preference Rights and Transfer
  Requirements.

  	
   

  	
  30

  
	
  Section 7.8      Tax Matters.

  	
   

  	
  32

  
	
  Section 7.9      Further Assurances.

  	
   

  	
  33

  
	
  Section 7.10    Reserved.

  	
   

  	
  33

  
	
  Section 7.11    Insurance;
  Financial Information.

  	
   

  	
  33

  

 

 iii
 

 

 

	
  Section 7.12    No
  Solicitation of Transactions.

  	
   

  	
  33

  
	
  Section 7.13    Transition
  Services Agreement.

  	
   

  	
  34

  
	
  Section 7.14    Employees.

  	
   

  	
  34

  
	
  Section 7.15    Hedges.

  	
   

  	
  34

  
	
  Section 7.16    Contribution
  of Oklahoma Assets.

  	
   

  	
  34

  
	
  Section 7.17    [RESERVED].

  	
   

  	
  35

  
	
  Section 7.18    Cure
  of Misrepresentations.

  	
   

  	
  35

  
	
  Section 7.19    NAGS.

  	
   

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 CONDITIONS TO CLOSING

  	
   

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 8.1      Conditions of Seller to Closing.

  	
   

  	
  35

  
	
  Section 8.2      Conditions of Purchaser to
  Closing.

  	
   

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 CLOSING

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 9.1      Time and Place of Closing.

  	
   

  	
  37

  
	
  Section 9.2      Obligations of Seller at Closing.

  	
   

  	
  37

  
	
  Section 9.3      Obligations of Purchaser at
  Closing.

  	
   

  	
  38

  
	
  Section 9.4      Closing Adjustments.

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 TERMINATION

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 10.1    Termination.

  	
   

  	
  40

  
	
  Section 10.2    Effect
  of Termination.

  	
   

  	
  41

  
	
  Section 10.3    Distribution
  of Deposit Upon Termination.

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 POST-CLOSING OBLIGATIONS; INDEMNIFICATION;
  LIMITATIONS; DISCLAIMERS AND WAIVERS

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 11.1    Receipts.

  	
   

  	
  41

  
	
  Section 11.2    Expenses.

  	
   

  	
  42

  
	
  Section 11.3    Assumed
  Seller Obligations.

  	
   

  	
  42

  
	
  Section 11.4    Survival.

  	
   

  	
  43

  
	
  Section 11.5    Indemnification
  by Seller.

  	
   

  	
  44

  
	
  Section 11.6    Indemnification
  by Purchaser.

  	
   

  	
  44

  
	
  Section 11.7    Indemnification
  Proceedings.

  	
   

  	
  45

  
	
  Section 11.8    Limitations
  on Indemnities.

  	
   

  	
  46

  
	
  Section 11.9    Release.

  	
   

  	
  47

  
	
  Section 11.10  Disclaimers.

  	
   

  	
  47

  
	
  Section 11.11  Waiver
  of Trade Practices Acts.

  	
   

  	
  49

  
	
  Section 11.12  Redhibition
  Waiver.

  	
   

  	
  49

  
	
  Section 11.13  Recording.

  	
   

  	
  49

  

 

 iv
 

 

 

	
  

  	
   

  	
   

  
	
  ARTICLE 12 MISCELLANEOUS

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 12.1    Counterparts.

  	
   

  	
  50

  
	
  Section 12.2    Notice.

  	
   

  	
  50

  
	
  Section 12.3    Sales
  or Use Tax Recording Fees and Similar Taxes and Fees.

  	
   

  	
  51

  
	
  Section 12.4    Expenses.

  	
   

  	
  51

  
	
  Section 12.5    Change
  of Name.

  	
   

  	
  51

  
	
  Section 12.6    Replacement
  of Bonds, Letters of Credit and Guarantees.

  	
   

  	
  51

  
	
  Section 12.7    Governing
  Law and Venue.

  	
   

  	
  52

  
	
  Section 12.8    Captions.

  	
   

  	
  52

  
	
  Section 12.9    Waivers.

  	
   

  	
  52

  
	
  Section 12.10  Assignment.

  	
   

  	
  52

  
	
  Section 12.11  Entire
  Agreement.

  	
   

  	
  52

  
	
  Section 12.12  Amendment.

  	
   

  	
  52

  
	
  Section 12.13  No
  Third-Party Beneficiaries.

  	
   

  	
  53

  
	
  Section 12.14  References.

  	
   

  	
  53

  
	
  Section 12.15  Construction.

  	
   

  	
  53

  
	
  Section 12.16  Conspicuousness.

  	
   

  	
  54

  
	
  Section 12.17  Severability.

  	
   

  	
  54

  
	
  Section 12.18  Time
  of Essence.

  	
   

  	
  54

  
	
  Section 12.19  Affiliate
  Liability.

  	
   

  	
  54

  
	
  Section 12.20  Schedules.

  	
   

  	
  54

  
	
  Section 12.21  Limitation
  on Damages.

  	
   

  	
  54

  

 

 v
 

 

 

EXHIBITS

 

	
  Exhibit “A”

  	
  Leases and Mineral Interests

  
	
   

  	
   

  
	
  Exhibit
  “A-1”

  	
  Wells, Future Wells and Units

  
	
   

  	
   

  
	
  Exhibit
  “A-2”

  	
  Equipment

  
	
   

  	
   

  
	
  Exhibit
  “B”

  	
  Conveyance

  
	
   

  	
   

  
	
  Exhibit
  “C”

  	
  Indemnity Agreement

  
	
   

  	
   

  
	
  Exhibit
  “D”

  	
  Seismic License

  

 

 

SCHEDULES

 

 

	
  Schedule 1.2(d)

  	
  Contracts

  
	
   

  	
   

  
	
  Schedule
  1.2(e)

  	
  Surface Contracts

  
	
   

  	
   

  
	
  Schedule
  1.2(g)

  	
  Pipelines

  
	
   

  	
   

  
	
  Schedule
  1.3(e)

  	
  Excluded Items

  
	
   

  	
   

  
	
  Schedule
  1.4

  	
  Effective Time; Proration of Costs and Revenues

  
	
   

  	
   

  
	
  Schedule
  5.7(a)

  	
  Party Proceedings

  
	
   

  	
   

  
	
  Schedule
  5.7(b)

  	
  Non-Party Proceedings

  
	
   

  	
   

  
	
  Schedule
  5.8

  	
  Taxes and Assessments

  
	
   

  	
   

  
	
  Schedule
  5.9

  	
  Compliance with Laws

  
	
   

  	
   

  
	
  Schedule
  5.10

  	
  Certain Contract Matters

  
	
   

  	
   

  
	
  Schedule
  5.11

  	
  Hydrocarbon Production Payments

  
	
   

  	
   

  
	
  Schedule
  5.12

  	
  Governmental Authorizations

  
	
   

  	
   

  
	
  Schedule
  5.13

  	
  Preference Rights and Transfer Requirements

  
	
   

  	
   

  
	
  Schedule
  5.14

  	
  Payout Balances

  
	
   

  	
   

  
	
  Schedule
  5.15

  	
  Outstanding Capital Commitments

  
	
   

  	
   

  
	
  Schedule
  5.16

  	
  Imbalances

  
	
   

  	
   

  

 

 vi
 

 

 

	
  Schedule 5.22

  	
  Plugging and Abandonment

  
	
   

  	
   

  
	
  Schedule
  7.6

  	
  Operation of Business

  
	
   

  	
   

  
	
  Schedule
  7.15

  	
  Hedging Transactions

  

 

 

 vii

 

DEFINITIONS

“1031 Assets” has the meaning set forth in
Section 7.8(c).

“actual knowledge” has the meaning set forth in Section 5.1(a).

“Adjusted Purchase Price” shall mean the
Purchase Price after calculating and applying the adjustments set forth in Section 2.2.

“Adjustment Period” has the meaning set forth in
Section 2.2(a).

“AFE” means authority for expenditure.

“Affiliates” with respect to any Person, means
any Person that directly or indirectly controls, is controlled by or is under
common control with such Person.  The
concept of control, controlling or controlled as used in the aforesaid context
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of another, whether through the ownership
of voting securities, by contract or otherwise. 
No Person shall be deemed an Affiliate of any Person by reason of the
exercise or existence of rights, interests or remedies under this Agreement.

“Aggregate Benefit Deductible” has the meaning
set forth in Section 3.4(j).

“Aggregate Defect Deductible” has the meaning
set forth in Section 3.4(j).

“Agreed Accounting Firm” has the meaning set
forth in Section 9.4(b).

“Agreed Interest Rate” means the rate of
interest published in the Wall Street Journal
from time to time, as the one month London Interbank Offered Rate (LIBOR) plus
75 basis points, with adjustments in that rate to be made on the same day as
any change in that rate.

“Agreement” means this Purchase and Sale
Agreement.

“Allocated Value” has the meaning set forth in Section 3.4(a).

“AEP” has the meaning set forth in the preamble
hereto.

“APC” has the meaning set forth in the preamble
hereto.

“Assessment” has the meaning set forth in Section 4.1.

“Assets” has the meaning set forth in Section 1.2.

“Assumed Seller Obligations” has the meaning set
forth in Section 11.3.

“Audited Financial Statements” has the meaning
set forth in Section 7.1(c).

“Business Day” means each calendar day except
Saturdays, Sundays, and Federal holidays.

“CERCLA” has the meaning set forth in the
definition of Environmental Laws.

“Claim Notice” has the meaning set forth in Section 11.4(b).

 

 viii
 

 

“Closing” has the meaning set forth in Section 9.1(a).

“Closing Date” has the meaning set forth in Section 9.1(b).

“Closing Payment” has the meaning set forth in Section 9.4(a).

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

“Confidentiality Agreement” has the meaning set
forth in Section 7.1(a).

“Contracts” has the meaning set forth in Section 1.2(d).

“Conveyance” has the meaning set forth in Section 3.1(b).

“Counterparties” has the meaning set forth in Section 7.15.

“Cure Period” has the meaning set forth in Section 3.4(c).

“Deductible” has the meaning set forth in Section 11.8(a).

“Defensible Title” has the meaning set forth in Section 3.2.

“Deposit” has the meaning set forth in Section 2.4.

“DTPA” has the meaning set forth in Section 11.11(a).

“Earned” has the meaning set forth in Section 1.4(b).

“Effective Time” has the meaning set forth in Section 1.4(a).

“Environmental Claim Date” has the meaning set
forth in Section 4.3.

“Environmental Defect” has the meaning set forth
in Section 4.3.

“Environmental Defect Amount” has the meaning
set forth in Section 4.3.

“Environmental Defect Notice” has the meaning
set forth in Section 4.3.

“Environmental Laws” means, as the same may have
been amended, any federal, state or local statute, law, regulation, ordinance,
rule, order or decree including any rule of common law, relating to (i) the
control of any potential pollutant or protection of the environment, including
air, water or land, (ii) the generation, handling, treatment, storage, disposal
or transportation of waste materials, or (iii) the regulation of or exposure to
hazardous, toxic or other substances alleged to be harmful, including, but not
limited to, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. § 9601 et seq. (“CERCLA”); the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (“RCRA”); the
Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean
Air Act, 42 U.S.C. § 7401 et seq. the Hazardous Materials Transportation
Act, 49 U.S.C. § 1471 et seq.; the Toxic Substances Control Act, 15
U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.;
the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et
seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. 

 ix
 

 

§ 651 et seq.; the Atomic Energy
Act, 42 U.S.C. § 2011 et seq.; and all applicable related law, whether
local, state, territorial, or national, of any Governmental Body having
jurisdiction over the property in question addressing pollution or protection
of human health, safety, natural resources or the environment and all
regulations implementing the foregoing. 
The term “Environmental Laws” includes all judicial and administrative
decisions, orders, directives, and decrees issued by a Governmental Body
pursuant to the foregoing.

“Environmental Liabilities” shall mean any and
all environmental response costs (including costs of remediation), damages,
natural resource damages, settlements, consulting fees, expenses, penalties,
fines, orphan share, prejudgment and post-judgment interest, court costs,
attorneys’ fees, and other liabilities incurred or imposed (i) pursuant to any
order, notice of responsibility, directive (including requirements embodied in
Environmental Laws), injunction, judgment or similar act (including
settlements) by any Governmental Body to the extent arising out of any
violation of, or remedial obligation under, any Environmental Laws which are
attributable to the ownership or operation of the Assets prior to the Effective
Time or (ii) pursuant to any claim or cause of action by a Governmental Body or
other Person for personal injury, property damage, damage to natural resources,
remediation or response costs to the extent arising out of any violation of, or
any remediation obligation under, any Environmental Laws which is attributable
to the ownership or operation of the Assets prior to the Closing.

“Equipment” has the meaning set forth in Section 1.2(f).

“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended.

“Event” has the meaning set forth in definition
of Material Adverse Effect.

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

“Excluded Assets” has the meaning set forth in Section 1.3.

“Excluded Seller Obligations” has the meaning
set forth in Section 11.3.

“Final Purchase Price” has the meaning set forth
in Section 9.4(b).

“Final Settlement Date” has the meaning set
forth in Section 9.4(b).

“Fundamental Representations” has the meaning
set forth in Section 11.4(a).

“Future Well” means a well to be drilled in the
future on a Future Well Location, which (for the purposes of determining
Defensible Title thereto and any Title Defects associated therewith pursuant to
this Agreement) shall be treated as if such well had been drilled and completed
and was in existence at or prior to the Effective Time.

“Future Well Location” means each drilling
location identified on Exhibit A-1,
subject to any depth restriction set forth in such Exhibit A-1
with respect to such location.

“GAAP” means generally accepted accounting
principles in effect in the United States as amended from time to time.

“Governmental Authorizations” has the meaning
set forth in Section 5.12.

 x
 

 

“Governmental Body” or “Governmental Bodies”
means any federal, state, local, municipal, or other government; any
governmental, regulatory or administrative agency, commission, body, arbitrator
or arbitration panel or other authority exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power; and any court or governmental tribunal.

“Hazardous Material” means (i) any “hazardous
substance,” as defined by CERCLA, (ii) any “hazardous waste” or “solid waste,”
in either case as defined by RCRA, and any analogous state statutes, and any
regulations promulgated thereunder, (iii) any solid,  hazardous, dangerous or toxic chemical,
material, waste or substance, within the meaning of and regulated by any
applicable Environmental Laws, (iv) any radioactive material, including any
naturally occurring radioactive material, and any source, special or byproduct
material as defined in 42 U.S.C. 2011 et seq. and any amendments or
authorizations thereof, (v) any regulated asbestos-containing materials in any
form or condition, (vi) any regulated polychlorinated biphenyls in any form or
condition, and (vii) petroleum, petroleum hydrocarbons or any fraction or
byproducts thereof.

“Hedging Transactions” has the meaning set forth
in Section 7.15.

“Howell” has the meaning set forth in the
preamble hereto.

“HSR Act” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

“Hydrocarbons” means oil, gas, casinghead gas,
condensate and other gaseous and liquid hydrocarbons or any combination thereof
and sulphur and other minerals extracted from or produced with the foregoing.

“Imbalance” or “Imbalances” means any
over-production, under-production, over-delivery, under-delivery or similar
imbalance of Hydrocarbons produced from or allocated to the Assets, regardless
of whether such over-production, under-production, over-delivery under-delivery
or similar imbalance arises at the platform, wellhead, pipeline, gathering
system, transportation system, processing plant or other location.

“incurred” has the meaning set forth in Section 1.4(b).

“Indemnified Party” has the meaning set forth in
Section 11.7(a).

“Indemnifying Party” has the meaning set forth
in Section 11.7(a).

“Indemnity Agreement” has the meaning set forth
in Section 3.4(d)(ii).

“Independent Expert” has the meaning set forth
in Section 4.3.

“Individual Benefit Deductible” has the meaning
set forth in Section 3.4(j).

“Individual Environmental Deductible” has the
meaning set forth in Section 4.3.

“Individual Title Deductible” has the meaning
set forth in Section 3.4(j).

“Invasive Activity” has the meaning set forth in
Section 4.1.

“KMOG” has the meaning set forth in the preamble
hereto.

 xi
 

“Lands” has the meaning set forth in Section 1.2(a).

“Laws” means all statutes, laws, rules,
regulations, ordinances, orders, and codes of Governmental Bodies.

“Leases” has the meaning set forth in Section 1.2(a).

“Like-Kind Exchange” has the meaning set forth Section 7.8(c).

“Losses” means any and all debts, obligations
and other liabilities (whether absolute, accrued, contingent, fixed or
otherwise, or whether known or unknown, or due or to become due or otherwise),
diminution in value, monetary damages, fines, fees, Taxes, penalties, interest
obligations, deficiencies, losses and expenses (including amounts paid in
settlement, interest, court costs, costs of investigators, reasonable fees and
expenses of attorneys, accountants, financial advisors and other experts, and
other actual out of pocket expenses incurred in investigating and preparing for
or in connection with any Proceeding).

“Lowest Cost Response” means the response
required or allowed under Environmental Laws that addresses the condition
present at the lowest cost (considered as a whole taking into consideration any
material negative impact such response may have on the operations of the
relevant assets and any potential material additional costs or liabilities that
may likely arise as a result of such response) as compared to any other
response that is required or allowed under Environmental Laws.

“Material Adverse Effect” means any change,
inaccuracy, circumstance, effect, event, result, occurrence, condition or fact
(each an “Event”) (whether or not (i) foreseeable or known as of the date of
this Agreement or (ii) covered by insurance) that has had, or could reasonably
be expected to have, a material adverse effect on (i) the ownership, operation
or value of the Assets, taken as a whole, or (ii) the ability of Seller to
consummate the transactions contemplated hereby.  Excluded from such Events for the purposes of
determining whether a “Material Adverse Affect” has occurred or could
reasonably be expected to occur are (A) Events resulting from entering into
this Agreement or the announcement of the transactions contemplated by this
Agreement, (B) Events resulting from changes in general market, economic,
financial or political conditions or any outbreak of hostilities or war, (C)
Events that affect the Hydrocarbon exploration, production, development,
processing, gathering and/or transportation industry generally (including
changes in commodity prices or general market prices in the Hydrocarbon
exploration, production, development, processing, gathering and/or
transportation industry generally), and (D) any effect resulting from a change
in Laws or regulatory policies.

“Material Contracts” has the meaning set forth
in Section 5.10.

“Maximum Indemnity Amount” has the meaning set
forth in Section 11.8(a).

“Mineral Interests” has the meaning set forth in
Section 1.2(a).

“NAGS” means those certain gathering assets
owned by Anadarko Gathering Company that are subject to the NAGS Agreement.

 xii
 

 

“NAGS Agreement” means that certain Gas Purchase
and Sales Contract dated September 1, 1993, between APC and Anadarko Gathering
Company, as amended, that is described on Schedule 1.2(d).

“NGA” has the meaning set forth in Section 5.19.

“NGPA” has the meaning set forth in Section 5.19.

“Net Revenue Interest” has the meaning set forth
in Section 3.2(a).

“NORM” means naturally occurring radioactive
material.

“Notice Period” has the meaning set forth in Section 11.7(a).

“Permitted Encumbrances” has the meaning set
forth in Section 3.3.

“Permitted NAGS Buyer” means any of Oneok, Inc.,
Kinder Morgan, Inc., DCP Midstream Partners, LP or any of their respective
wholly-owned subsidiaries.

“Person” means any individual, firm,
corporation, partnership, limited liability company, joint venture,
association, trust, unincorporated organization, Governmental Body or any other
entity.

“Personal Property” has the meaning set forth in
Section 1.2(g).

“Pipelines” has the meaning set forth in Section 1.2(g).

“Preference Property” has the meaning set forth
in Section 7.7(b).

“Preference Right” means any right or agreement
that enables any Person to purchase or acquire any Asset or any interest
therein or portion thereof as a result of or in connection with (i) the sale,
assignment or other transfer of any Asset or any interest therein or portion thereof
or (ii) the execution or delivery of this Agreement or the consummation or
performance of the terms and conditions contemplated by this Agreement.

“Proceeding” or “Proceedings” has the meaning
set forth in Section 5.7.

“Properties” has the meaning set forth in Section 1.2(c).

“Property Costs” has the meaning set forth in Section 1.4(b).

“Proprietary Seismic Data” means all of Seller’s
proprietary geophysical, seismic and geological data collected or obtained from
any 3D seismic surveys, covering the Lands, including any processed or
reprocessed data.

“Purchase Price” has the meaning set forth in Section 2.1.

“Purchaser” has the meaning set forth in the
preamble hereto.

“Purchaser Indemnified Persons” has the meaning
set forth in Section 11.5.

“Q1” has the meaning set forth in Section 7.8(c).

 xiii
 

 

“RCRA” has the meaning set forth in the
definition of Environmental Laws.

“Records” has the meaning set forth in Section 1.2(i).

“REGARDLESS OF FAULT” means WITHOUT
REGARD TO THE CAUSE OR CAUSES OF ANY CLAIM, INCLUDING, WITHOUT LIMITATION, EVEN
THOUGH A CLAIM IS CAUSED IN WHOLE OR IN PART BY:

OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
THE NEGLIGENCE (WHETHER SOLE, JOINT, CONCURRENT, COMPARATIVE, CONTRIBUTORY,
ACTIVE OR PASSIVE), STRICT LIABILITY, OR OTHER FAULT OF THE SELLER INDEMNIFIED
PERSONS; AND/OR

A PRE-EXISTING DEFECT, WHETHER PATENT OR LATENT,
OF THE PREMISES OF PURCHASER’S PROPERTY OR SELLER’S PROPERTY (INCLUDING WITHOUT
LIMITATION THE ASSETS), INVITEES AND/OR THIRD PARTIES; AND/OR

THE UNSEAWORTHINESS OF ANY VESSEL OR
UNAIRWORTHINESS OF ANY AIRCRAFT OF A PARTY WHETHER CHARTERED, OWNED, OR
PROVIDED BY THE PURCHASER INDEMNIFIED PERSONS, SELLER INDEMNIFIED PERSONS,
INVITEES AND/OR THIRD PARTIES.

“Retained Asset” has the meaning set forth in Section 7.7(c).

“Retained Employee Liabilities” shall mean any
liabilities of Seller or any of its Affiliates (i) to employees of Seller or
any of its Affiliates arising under the Worker Adjustment and Retraining
Notification Act of 1988, as amended (or similar state or local law), as a
result of actions taken by Seller or any of its Affiliates on or prior to the
Closing, (ii) arising out of claims by or on behalf of employees of Seller or
any of its Affiliates with respect to events that occur on or prior to the Closing
and that relate to their employment with, or the terminations of their
employment from, Seller, (iii) with respect to employees of Seller or any of
its Affiliates arising under any “employee benefit plan” (as defined in Section
3(3) of ERISA) that is or has been sponsored by, contributed to, or maintained
by, Seller or any of its Affiliates, or (iv) arising under ERISA for which
Purchaser may have any liability under ERISA solely as a result of the
consummation of the transaction contemplated by this Agreement.

“Royalty Actions” means each Proceeding listed
under Category 3 on Schedule 5.7(a)
other than the Proceeding listed in item 6 and item 7 under the same category.

“Royalty Amounts” has the meaning set forth in Section 11.3.

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

“Seismic License” means that certain seismic
license covering Proprietary Seismic Data in the form attached hereto as Exhibit D.

“Seller” has the meaning set forth in the
preamble hereto.

“Seller Indemnified Persons” has the meaning set
forth in Section 11.6.

“Seller Operated Assets” means Assets operated
by Seller.

 xiv
 

 

“Statements of Revenues and Expenses” has the
meaning set forth in Section 7.1(b).

“Surface Contracts” has the meaning set forth in
Section 1.2(e).

“Tax Allocated Value” has the meaning set forth
in Section 2.3.

“Taxes” means all federal, state, local, and
foreign income, profits, franchise, sales, use, ad valorem, property,
severance, production, excise, stamp, documentary, real property transfer or
gain, gross receipts, goods and services, registration, capital, transfer, or
withholding taxes or other governmental fees or charges imposed by any
Governmental Body, including any interest, penalties or additional amounts
which may be imposed with respect thereto.

“Tax Returns” has the meaning set forth in Section 5.8(a).

“Termination Date” has the meaning set forth in Section 10.1(b)(i).

“Third Party Claim” has the meaning set forth in
Section 11.7(a).

“Title Arbitrator” has the meaning set forth in Section 3.4(i).

“Title Benefit” has the meaning set forth in Section 3.2(d).

“Title Benefit Amount” has the meaning set forth
in Section 3.4(e).

“Title Benefit Notice” has the meaning set forth
in Section 3.4(b).

“Title Claim Date” has the meaning set forth in Section 3.4(a).

“Title Defect” has the meaning set forth in Section 3.2(d).

“Title Defect Amount” has the meaning set forth
in Section 3.4(d)(i).

“Title Defect Notice” has the meaning set forth
in Section 3.4(a).

“Title Defect Property” has the meaning set forth
in Section 3.4(a).

“Transfer Requirement” means any consent,
approval, authorization or permit of, or filing with or notification to, any
Person which is required to be obtained, made or complied with for or in
connection with any sale, assignment or transfer of any Asset or any interest
therein; provided, however, that “Transfer Requirement” shall not include any
consent of, notice to, filing with, or other action by any Governmental Body in
connection with the sale or conveyance of oil and/or gas leases or interests
therein or Surface Contracts or interests therein, if they are not required
prior to the assignment of such oil and/or gas leases, Surface Contracts or
interests or they are customarily obtained subsequent to the sale or conveyance
(including consents from state agencies).

“Transfer Taxes” has the meaning set forth in Section 12.3.

“Transition Services Agreement” has the meaning
set forth in Section 7.13.

“Units” has the meaning set forth in Section 1.2(c).

“UTPCPL” has the meaning set forth in Section 11.11(a).

 xv
 

 

“Warranty Well” means a Well or a Future Well, as the context requires.

 

“Wells” has the meaning set forth in Section 1.2(b).

 

 xvi

 

PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement is executed on
February 1, 2007, by and among Anadarko Petroleum Corporation, a Delaware
corporation (“APC”), Anadarko E&P Company LP, a Delaware limited
partnership (“AEP”), Howell Petroleum Corporation, a Delaware corporation (“Howell”),
and Kerr-McGee Oil & Gas Onshore LP, a Delaware limited partnership (“KMOG”;
APC, AEP, Howell and KMOG are collectively called “Seller”), and EXCO
Resources, Inc., a Texas corporation (“Purchaser”).

RECITALS

A.            Seller
owns the Assets as more fully described in Section 1.2 and
the exhibits hereto.

B.            Seller
desires to sell to Purchaser and Purchaser desires to purchase from Seller the
properties and rights of Seller hereafter described, in the manner and upon the
terms and conditions hereafter set forth.

NOW, THEREFORE, in consideration of the premises and
of the mutual promises, representations, warranties, covenants, conditions and
agreements contained herein, and for other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound by the terms hereof, agree as follows:

ARTICLE 1

PURCHASE AND SALE

Section 1.1            Purchase
and Sale.

At the Closing, and upon the terms and subject to the
conditions of this Agreement, Seller agrees to sell, transfer and convey the
Assets to Purchaser and Purchaser agrees to purchase, accept and pay for the
Assets and to assume the Assumed Seller Obligations.

Section 1.2            Assets.

As used herein, the term “Assets” means, subject to
the terms and conditions of this Agreement, all of Seller’s right, title,
interest and estate, real or personal, recorded or unrecorded, movable or
immovable, tangible or intangible, in and to the following (but excluding the
Excluded Assets):

(a)           All (i) of the oil and gas leases; subleases and other
leaseholds; carried interests; farmout rights; options; and other properties
and interests described on Exhibit A,
subject to such depth limitations and other restrictions as may be set forth on
Exhibit A (collectively, the “Leases”)
and (ii) fee mineral interests, fee royalty interests and other fee interests
in oil, gas and other minerals described on Exhibit
A (collectively, the “Mineral Interests”), (in each case) together
with each and every kind and character of right, title, claim, and interest
that Seller has in and to the lands covered by the Leases and the Mineral
Interests and the interests currently pooled, unitized, communitized or
consolidated therewith (the “Lands”);

(b)           All oil, gas, water or injection wells located on the
Lands, whether producing, shut-in, or temporarily abandoned, including the
interests in the wells shown on Exhibit A-1
attached hereto (collectively, the “Wells”);

 1
 

 

(c)           All interests of Seller in or to any currently existing
pools or units which include any Lands or all or a part of any Leases or
Mineral Interests or include any Wells, including those pools or units shown on
Exhibit A-1 (the “Units”; the
Units, together with the Leases, Mineral Interests, Lands and Wells, being
hereinafter referred to as the “Properties”), and including all interests of
Seller in production of Hydrocarbons from any such Unit, whether such Unit
production of Hydrocarbons comes from Wells located on or off of a Lease or the
Mineral Interests, and all tenements, hereditaments and appurtenances belonging
to the Leases, the Mineral Interests and Units;

(d)           All contracts, agreements and instruments by which the
Properties are bound or subject, or that relate to or are otherwise applicable
to the Properties, only to the extent applicable to the Properties rather than
Seller’s or any of its Affiliates’ other properties, including but not limited
to, operating agreements, unitization, pooling and communitization agreements,
declarations and orders, joint venture agreements, farmin and farmout
agreements, exploration agreements, participation agreements, exchange
agreements, transportation or gathering agreements, agreements for the sale and
purchase of oil, gas or casinghead gas and processing agreements to the extent
applicable to the Properties or the production of Hydrocarbons produced in
association therewith from the Properties, including those identified on Schedule 1.2(d) (hereinafter collectively
referred to as “Contracts”), but excluding any contracts, agreements and
instruments to the extent transfer would result in a violation of applicable
Law or is restricted by any Transfer Requirement that is not waived by
Purchaser or satisfied pursuant to Section
7.7 and provided that “Contracts” shall not include the instruments
constituting the Leases;

(e)           All easements, permits, licenses, servitudes,
rights-of-way, surface leases and other surface rights (“Surface Contracts”)
appurtenant to, and used or held for use in connection with the Properties
(including those identified on Schedule
1.2(e)), but excluding any permits and other rights to the extent
transfer would result in a violation of applicable Law or is restricted by any
Transfer Requirement that is not waived by Purchaser or satisfied pursuant to Section 7.7;

(f)            All
treatment and processing plants and equipment, machinery, fixtures and other
tangible personal property and improvements located on the Properties or used
or held for use in connection with the operation of the Properties, including
those identified on Exhibit A-2
(“Equipment”);

(g)           All
flow lines, pipelines, gathering systems and appurtenances thereto located on
the Properties or used, or held for use, in connection with the operation of
the Properties, including those identified on Schedule
1.2(g) (“Pipelines” and, together with the Equipment and Wells, “Personal
Property”);

(h)           All
Hydrocarbons produced from or attributable to the Leases, Mineral Interests,
Lands, and Wells from and after the Effective Time, together with Imbalances
associated with the Properties;

(i)            All
lease files; land files; well files; gas and oil sales contract files; gas
processing files; division order files; abstracts; title opinions; land
surveys; logs; maps; engineering data and reports; interpretive data, technical
evaluations and technical outputs; and other books, records, data, files, and
accounting records, in each case to the extent related to the Assets, or used
or held for use in connection with the maintenance or operation thereof, but
excluding (i) any books, records, data, files, logs, maps, evaluations,
outputs, and accounting records to the 

 

 2
 

 

extent disclosure or transfer would result in a violation of applicable
Law or is restricted by any Transfer Requirement that is not satisfied pursuant
to Section 7.7, (ii) computer or
communications software or intellectual property (including tapes, codes, data
and program documentation and all tangible manifestations and technical
information relating thereto), (iii) attorney-client privileged communications
and work product of Seller’s or any of its Affiliates’ legal counsel (other
than title opinions), (iv) reserve studies and evaluations, and (v) records
relating to the negotiation and consummation of the sale of the Assets (subject
to such exclusions, the “Records”); provided, however, that Seller may retain
the originals of such Records as Seller has reasonably determined may be
required for existing litigation, tax, accounting, and auditing purposes; and

(j)            All
vehicles or vessels used exclusively in connection with the Assets.

Section 1.3            Excluded
Assets.

Notwithstanding the foregoing, the Assets shall not
include, and there is excepted, reserved and excluded from the transaction
contemplated hereby (collectively, the “Excluded Assets”):

(a)           except
to the extent necessary to satisfy Seller’s obligations under Section 7.1(b), (i) all corporate,
financial, income and franchise tax and legal records of Seller that relate to
Seller’s business generally (whether or not relating to the Assets), (ii) all
books, records and files that relate to the Excluded Assets, (iii) those
records retained by Seller pursuant to Section
1.2(i) and (iv) copies of any other Records retained by Seller
pursuant to Section 1.5;

(b)           subject
to the Seismic License, all geological and geophysical data (including all
seismic data, including reprocessed data), reserve estimates, economic
estimates, and, to the extent excluded from Section
1.2(i), all logs, interpretive data, technical evaluations and
technical outputs;

(c)           all
rights to any refund related to the Excluded Seller Obligations or Taxes or
other costs or expenses borne by Seller or Seller’s predecessors in interest
and title attributable to periods prior to the Effective Time;

(d)           Seller’s
area-wide bonds, permits and licenses or other permits, licenses or
authorizations used in the conduct of Seller’s business generally;

(e)           those
items listed in Schedule 1.3(e);

(f)            all
trade credits, account receivables, note receivables, take-or-pay amounts
receivable, and other receivables attributable to the Assets with respect to
any period of time prior to the Effective Time;

(g)           all
claims and causes of action described in Schedule
5.7;

(h)           except
to the extent specifically provided in Section
1.2(j), all right, title and interest of Seller in and to vehicles
or vessels used in connection with the Assets;

(i)            all
rights, titles, claims and interests of Seller or any Affiliate of Seller (i)
to or under any policy or agreement of insurance or any insurance proceeds; except
to the extent provided in Section 3.5,
and (ii) to or under any bond or bond proceeds;

 3
 

 

(j)            subject
to Section 12.5, any patent,
patent application, logo, service mark, copyright, trade name or trademark of
or associated with Seller or any Affiliate of Seller or any business of Seller
or of any Affiliate of Seller;

(k)           a
nonexclusive right to freely use any copies of any logs, interpretive data,
technical outputs, technical evaluations, maps, engineering data and reports,
reserve studies and evaluations, and other data and information being
transferred as a part of the Assets that Seller is entitled to retain pursuant
to Section 1.5; and

(l)            all
Retained Assets not conveyed to Purchaser pursuant to Section 7.7 and any Property excluded
pursuant to Section 3.4(d)(iii).

Section 1.4            Effective
Time; Proration of Costs and Revenues.

(a)           Subject
to Section 1.5, possession of the
Assets shall be transferred from Seller to Purchaser at the Closing, but
certain financial benefits and burdens of the Assets shall be transferred
effective as of 7:00 A.M., local time, where the respective Assets are located,
on January 1, 2007 (the “Effective Time”), as described below.

(b)           Purchaser
shall be entitled to all Hydrocarbon production from or attributable to the
Properties at and after the Effective Time (and all products and proceeds
attributable thereto), and to all other income, proceeds, receipts and credits
earned with respect to the Assets at or after the Effective Time, and shall be
responsible for (and entitled to any refunds with respect to) all Property
Costs incurred at and after the Effective Time. Seller shall be entitled to all
Hydrocarbon production from or attributable to the Properties prior to the
Effective Time (and all products and proceeds attributable thereto), and to all
other income, proceeds, receipts and credits earned with respect to the Assets
prior to the Effective Time, and shall be responsible for (and entitled to any
refunds with respect to) all Property Costs incurred prior to the Effective Time.
“Earned” and “incurred”, as used in this Agreement, shall be interpreted in
accordance with GAAP and Council of Petroleum Accountants Society (COPAS)
standards, as applicable. “Property Costs” means all costs attributable to the
ownership and operation of the Assets (including without limitation costs of
insurance relating specifically to the Assets and ad valorem, property,
severance, Hydrocarbon production and similar Taxes based upon or measured by
the ownership or operation of the Assets or the production of Hydrocarbons
therefrom, but excluding any other Taxes) and capital expenditures incurred in
the ownership and operation of the Assets in the ordinary course of business
and, where applicable, in accordance with the relevant operating or unit agreement,
if any, and overhead costs charged to the Assets under the relevant operating
agreement or unit agreement, if any, or, if none, the amounts shown under Schedule 1.4 shall be the overhead amounts
deemed charged to the Assets, but excluding without limitation liabilities,
losses, costs, and expenses attributable to (i) claims for personal injury or
death, property damage or violation of any Law, (ii) obligations to plug wells
or dismantle, abandon and salvage facilities, (iii) obligations to remediate
any contamination of groundwater, surface water, soil, Equipment or Pipelines
under applicable Environmental Laws, (iv) obligations to furnish make-up gas
according to the terms of applicable gas sales, gathering or transportation
contracts, (v) gas balancing obligations and (vi) obligations to pay working
interests, royalties, overriding royalties or other interests held in suspense,
all of which are addressed in Article 11
or elsewhere in this Agreement.  For
purposes of this Section 1.4,
determination of whether Property Costs are attributable to the period before
or after the Effective Time shall be based on when services are rendered, when
the goods are delivered, or when the work is performed.  For clarification, the date an item or work
is ordered is not the date of a pre-Effective Time transaction for settlement
purposes, but 

 4
 

 

rather the date on which the item ordered is delivered to the job site,
or the date on which the work ordered is performed, shall be the relevant
date.  For purposes of allocating
Hydrocarbon production (and accounts receivable with respect thereto), under
this  Section
1.4, (i) liquid Hydrocarbons shall be deemed to be “from or
attributable to” the Properties when they are placed into the storage
facilities and (ii) gaseous Hydrocarbons shall be deemed to be “from or
attributable to” the Properties when they pass through the delivery point sales
meters on the pipelines through which they are transported. Seller shall
utilize reasonable interpolative procedures to arrive at an allocation of
Hydrocarbon production when exact meter readings or gauging and strapping data
is not available. Seller shall provide to Purchaser, no later than three (3)
Business Days prior to Closing, all data necessary to support any estimated
allocation, for purposes of establishing the adjustment to the Purchase Price
pursuant to Section 2.2 hereof
that will be used to determine the Closing Payment.  Property Costs that are paid periodically
shall be prorated based on the number of days in the applicable period falling
before and the number of days in the applicable period falling at or after the
Effective Time, except that Hydrocarbon production, severance and similar Taxes
shall be prorated based on the number of units actually produced, purchased or
sold or proceeds of sale, as applicable, before, and at or after, the Effective
Time. In each case, Purchaser shall be responsible for the portion allocated to
the period at and after the Effective Time and Seller shall be responsible for
the portion allocated to the period before the Effective Time.

Section 1.5            Delivery
and Maintenance of Records.

Seller, at Seller’s sole cost and expense, shall
deliver the Records (FOB Seller’s office) to Purchaser within thirty (30) days
following Closing; provided, however, that Seller shall be entitled to retain those
original Records necessary to comply with its obligations under the Transition
Services Agreement for so long as is reasonably necessary to comply with its
obligations under the Transition Services Agreement and Seller, at Purchaser’s
sole expense, shall provide Purchaser with copies of any such original Records
retained by Seller as soon as reasonably practicable.  Other than any original Records retained by
Seller pursuant to Section 1.2(i),
Purchaser shall be entitled to all original Records maintained by Seller (other
than such Records maintained at the Grogans Mill offsite storage facility,
which is addressed below)  ,and a scanned
copy of all of the original Records and, to the extent available and specifically
identifiable to the Assets, original Records maintained by Seller at its
Grogans Mill offsite storage facility. 
Seller shall be entitled to keep a copy or copies of all Records;
provided, however, that Seller shall not sell or otherwise allow third parties
to review, copy or otherwise use (for any purpose) any Records retained by
Seller for their own account.  Purchaser
shall preserve the Records for a period of ten (10) years following the Closing
and will allow Seller and its representatives, consultants and advisors
reasonable access, during normal business hours and upon reasonable notice, to
the Records for any legitimate business reason of Seller, including in order
for Seller to comply with a Tax or other legally required reporting obligation
or Tax or legal dispute; provided, however, that Purchaser shall not be
required to grant access to Seller or any of its representatives, consultants
or advisors, to any Records that are subject to an attorney/client or attorney
work product privilege or that would cause Purchaser to violate any obligation
to any third party or breach any restriction legally binding on Purchaser.  Any such access shall be at the sole cost and
expense of Seller.  Unless otherwise
consented to in writing by Seller, for a period of ten (10) years following the
Closing Date, Purchaser shall not and shall cause its Affiliates not to,
destroy, alter or otherwise dispose of the Records, or any portions thereof,
without first giving at least thirty (30) days prior written notice to Seller
and offering to surrender to Seller the Records or such portions thereof.

 5
 

 

ARTICLE 2

PURCHASE PRICE

Section 2.1            Purchase
Price.

The purchase price for the Assets (the “Purchase Price”)
shall be $860,000,000 adjusted as provided in Section 2.2.

Section 2.2            Adjustments
to Purchase Price.

The Purchase Price for the Assets shall be adjusted in
the manner specified below (without duplication), with all such amounts being
determined in accordance with GAAP and Council of Petroleum Accountants Society
(COPAS) standards, as applicable, in order to reach the Adjusted Purchase
Price:

(a)           Reduced
by the aggregate amount of the following proceeds received by Seller between
(and including) the Effective Time and the Closing Date (with the period
between the Effective Time and the Closing Date referred to as the “Adjustment
Period”): (i) proceeds from the sale of Hydrocarbons (net of any royalties,
overriding royalties or other burdens on or payable out of production,
gathering, processing and transportation costs and any production, severance,
sales, excise or similar Taxes not reimbursed to Seller by the purchaser of
production) produced from or attributable to the Properties during the
Adjustment Period, and (ii) other proceeds earned with respect to the Assets during
the Adjustment Period;

(b)           Reduced
to the extent provided in Section 7.7
with respect to Preference Rights and Retained Assets;

(c)           (i)
If the parties make the election under Section
3.4(d)(i) with respect to a Title Defect, subject to the Individual
Title Deductible and the Aggregate Defect Deductible, reduced by the Title
Defect Amount with respect to such Title Defect if the Title Defect Amount has
been determined prior to Closing and (ii) subject to the Individual Benefit
Deductible and the Aggregate Benefit Deductible, increased by the Title Benefit
Amount with respect to each Title Benefit for which the Title Benefit Amount
has been determined prior to Closing;

(d)           Increased
by the amount of all Property Costs and other costs attributable to the
ownership and operation of the Assets which are paid by Seller and incurred
during the Adjustment Period (including any overhead costs under Schedule 1.4 deemed charged to the Assets
with respect to the Adjustment Period even though not actually paid), except
any Property Costs and other such costs already deducted in the determination
of proceeds in Section 2.2(a);

(e)           Reduced
to the extent provided in Section 3.4(d)(iii)
for any Properties excluded from the Assets pursuant to Section 3.4(d)(iii) and reduced to the
extent provided in Section 4.3 for
Environmental Defects;

(f)            Reduced
by the aggregate amounts payable to owners of working interests, royalties and
overriding royalties and other interests in the Properties held in suspense by
Seller as of the Closing Date;

(g)           Increased
or reduced as mutually agreed upon in writing prior to Closing by Seller and
Purchaser;

 6
 

 

(h)           Increased
by the value of the amount of merchantable Hydrocarbons stored in tanks and
pipelines attributable to the ownership and operation of the Assets that belong
to Seller as of the Effective Time (which value shall be computed at the
applicable third-party contract prices for the month of December 2006 for such
stored Hydrocarbons); and

(i)            Reduced
by the actual net aggregate Imbalances, if any, owed by Seller to
third-parties, as of the Effective Time, multiplied by a price of $3.00 per
MMBtu.

Each adjustment made pursuant to Section
2.2(a) shall serve to satisfy, up to the amount of the adjustment,
Purchaser’s entitlement under Section 1.4 to
Hydrocarbon production from or attributable to the Properties during the
Adjustment Period, and to the value of other income, proceeds, receipts and
credits earned with respect to the Assets during the Adjustment Period, and as
such, Purchaser shall not have any separate rights to receive any Hydrocarbon
production or income, proceeds, receipts and credits with respect to which an
adjustment has been made. Similarly, the adjustment described in Section 2.2(d) shall serve to satisfy, up to the amount of
the adjustment, Purchaser’s obligation under Section 1.4
to pay Property Costs and other costs attributable to the ownership and
operation of the Assets which are incurred during the Adjustment Period, and as
such, notwithstanding anything in this Agreement to the contrary, Purchaser
shall not be separately obligated to pay for any Property Costs or other such
costs with respect to which an adjustment has been made.

The Purchase Price less the Deposit provided for in Section 2.4, adjusted as set forth in (a) through (i), shall
be increased by simple interest thereon from the Effective Time to the Closing
Date, computed at the Agreed Interest Rate.

Section 2.3            Allocation
of Purchase Price for Tax Purposes

Purchaser and Seller will use commercially reasonable
efforts to agree, on or before the Closing Date, upon an allocation of the
unadjusted Purchase Price among each of the Assets, in compliance with the
principles of Section 1060 of the Code, and the Treasury regulations
thereunder.  Such allocation of value
shall be generally treated as Class V assets for purposes of Internal Revenue
Service Form 8594 to the extent possible consistent with the character of the
Assets involved. The “Tax Allocated Value” for any Asset equals the portion of
the unadjusted Purchase Price to be allocated to such Asset by the parties
pursuant to this Section  2.3,
increased or reduced as described in this Article 2.  Any adjustments to the Purchase Price other
than the adjustments provided for in Sections 2.2(b),
2.2(c), and 2.2(e)
shall be applied on a pro rata basis to the amounts agreed to by the parties
pursuant to this Section 2.3 for all Assets to the
maximum extent possible consistent with the character of the adjustments.  After all such adjustments are made, any adjustments
to the Purchase Price pursuant to Sections 2.2(b), 2.2(c), and 2.2(e) shall be
applied to the amounts agreed to by the parties pursuant to this Section 2.3 for the particular affected Assets. After Seller
and Purchaser have agreed on the Tax Allocated Values for the Assets, Seller
will be deemed to have accepted such Tax Allocated Values for purposes of this
Agreement and the transactions contemplated hereby, but otherwise makes no
representation or warranty as to the accuracy of such values. Seller and
Purchaser agree (i) that the Tax Allocated Values shall be used by Seller and
Purchaser as the basis for reporting asset values and other items for purposes
of all federal, state, and local Tax Returns, including without limitation
Internal Revenue Service Form 8594 and (ii) that neither they nor their
Affiliates will take positions inconsistent with the Tax Allocated Values in
notices to Governmental Bodies, in audit or other proceedings with respect to
Taxes unless required by applicable Law or with the consent of the other
party.  Purchaser and Seller agree that
each shall furnish the other a copy of Form 8594 (Asset Acquisition Statement
under Section 1060) 

 7
 

 

proposed to be filed with
the Internal Revenue Service by such party or any Affiliate thereof within ten
(10) days prior to such filing.

Section 2.4            Deposit

On or before 12:00 p.m. on
February 2, 2007, Purchaser will pay to Seller an earnest money deposit
in an amount equal to $43,000,000 (the “Deposit”).  The Deposit shall be non-interest bearing and
applied against the Purchase Price if the Closing occurs or shall be otherwise
distributed in accordance with the terms of this Agreement.

ARTICLE 3

TITLE MATTERS

Section 3.1            Seller’s
Title.

(a)           Except
for the special warranty of title referenced in Section 3.1(b) and without limiting Purchaser’s right to
adjust the Purchase Price by operation of this Article 3, Seller makes no warranty or representation,
express, implied, statutory or otherwise, with respect to Seller’s title to any
of the Assets, and Purchaser hereby acknowledges and agrees that the sole
remedy for any defect of title, including any Title Defect, with respect to any
of the Assets (i) before Closing, shall be as set forth in Section 3.4(d) and (ii) after Closing,
shall be pursuant to the special warranty of title referenced in Section 3.1(b).

(b)           The
conveyance covering the Assets to be delivered by Seller to Purchaser shall be
substantially in the form of Exhibit B
hereto (the “Conveyance”).  The
Conveyance shall contain a special warranty of Defensible Title by, through and
under Seller and its Affiliates, but not otherwise, to the Units, Warranty
Wells and other Assets shown on Exhibit A-1,
subject to the Permitted Encumbrances, but shall otherwise be without warranty
of title of any kind, express, implied or statutory or otherwise.

(c)           Purchaser
shall not be entitled to protection under Seller’s special warranty of title in
the Conveyance against any Title Defect reported by Purchaser under Section 3.4(a) and/or any Title Defect actually
known by any officer of Purchaser or any of its Affiliates prior to the Title
Claim Date.

(d)           Notwithstanding
anything herein provided to the contrary, if a Title Defect under this Article 3 results from any matter which
could also result in the breach of any representation or warranty of Seller set
forth in Article 5, then Purchaser
shall only be entitled to assert such matter (i) before Closing, as a Title
Defect to the extent permitted by this Article
3, or (ii) after Closing, as a breach of Seller’s special warranty
of title contained in the Conveyance to the extent permitted by this Section 3.1, and shall be precluded from
also asserting such matter as the basis of the breach of any such
representation or warranty.

Section 3.2            Definition
of Defensible Title.

As used in this Agreement, the term “Defensible Title”
means that title of Seller with respect to the Units, Warranty Wells or other
Assets shown in Exhibit A-1 that, except for and
subject to Permitted Encumbrances:

(a)           Entitles Seller to receive a share of the Hydrocarbons
produced, saved and marketed from any Unit, Warranty Well or other Asset shown
in Exhibit A-1 throughout the 

 8
 

 

duration of the productive life of such Unit,
Warranty Well or other Asset (after satisfaction of all royalties, overriding
royalties, net profits interests or other similar burdens on or measured by
production of Hydrocarbons) (a “Net Revenue Interest”), of not less than the
Net Revenue Interest shown in Exhibit A-1
for such Unit, Warranty Well or other Asset, except (solely to the extent that
such actions do not cause a breach of Seller’s covenants under Section 7.6) for decreases in connection
with those operations in which Seller may from and after the Effective Time
become a non-consenting co-owner, decreases resulting from the establishment or
amendment from and after the Effective Time of pools or units, and decreases
required to allow other working interest owners to make up past underproduction
or pipelines to make up past under deliveries, and except as stated in such Exhibit A-1;

(b)           Obligates Seller to bear a percentage of the costs and
expenses for the maintenance and development of, and operations relating to,
(i) any Unit, Warranty Well or other Asset shown in Exhibit A-1  not greater
than the “working interest” shown in Exhibit
A-1 for such Unit, Warranty Well or other Asset without increase
throughout the productive life of such Unit, Warranty Well or other Asset,
except as stated in Exhibit  A-1 and except for increases resulting from
contribution requirements with respect to non-consenting co-owners under
applicable operating agreements and increases that are accompanied by at least
a proportionate increase in Seller’s Net Revenue Interest; and

(c)           Is free and clear of liens, encumbrances, obligations,
security interests, irregularities, pledges, or other defects.

(d)           As used in this Agreement, the term “Title Defect” means
any lien, charge, encumbrance, obligation (including contract obligation),
defect, or other matter (including without limitation a discrepancy in Net
Revenue Interest or working interest) that causes Seller not to have Defensible
Title in and to the Units, Warranty Wells or other Assets shown on Exhibit A-1 as of the Effective Time and
the Closing. As used in this Agreement, the term “Title Benefit” shall mean any
right, circumstance or condition that operates to increase the Net Revenue
Interest of Seller in any Unit, Warranty Well or other Asset shown on Exhibit A-1, without causing a greater than
proportionate increase in Seller’s working interest above that shown in Exhibit A-1 as of the Effective Time.
Notwithstanding the foregoing, the following shall not be considered Title
Defects:

(i)                                     defects
based solely on (1) lack of information in Seller’s files, or (2) references to
a document(s) if such document(s) is not in Seller’s files;

(ii)                                  defects
arising out of lack of corporate or other entity authorization unless Purchaser
provides affirmative evidence that the action was not authorized;

(iii)                               defects
based on failure to record Leases issued by any state or federal Governmental
Body, or any assignments of such Leases, in the real property, conveyance or
other records of the county or parish in which such Property is located;

(iv)                              defects
based on a gap in Seller’s chain of title in the county or parish records as to
Leases, unless such gap is affirmatively shown to exist in such records by an
abstract of title, title opinion or landman’s title chain which documents shall
be included in a Title Defect Notice; and

(v)                                 defects
that have been cured by applicable Laws of limitation or prescription.

 9
 

 

Section 3.3            Definition
of Permitted Encumbrances.

As used herein, the term “Permitted Encumbrances”
means any or all of the following:

(a)           Royalties and any overriding royalties, reversionary
interests and other burdens on production, to the extent that any such burden
does not reduce Seller’s Net Revenue Interest below that shown in Exhibit A-1 or increase Seller’s working
interest above that shown in Exhibit A-1
without a proportionate increase in the Net Revenue Interest;

(b)           All Leases, unit agreements, pooling agreements, operating
agreements, Hydrocarbon production sales contracts, division orders and other
contracts, agreements and instruments applicable to the Assets, to the extent
that they do not, individually or in the aggregate, reduce Seller’s Net Revenue
Interest below that shown in Exhibit A-1
or increase Seller’s working interest above that shown in Exhibit A-1 without a proportionate
increase in the Net Revenue Interest;

(c)           Preference Rights applicable to this or any future
transaction;

(d)           Transfer Requirements applicable to this or any future
transaction;

(e)           Liens for current Taxes or assessments not yet delinquent;

(f)            Materialman’s, mechanic’s, repairman’s, employee’s, contractor’s,
operator’s and other similar liens or charges arising in the ordinary course of
business for amounts not yet delinquent (including any amounts being withheld
as provided by Law);

(g)           All rights to consent by, required notices to, filings
with, or other actions by Governmental Bodies in connection with the sale or
conveyance of the Assets or interests therein pursuant to this or to any future
transaction if they are not required or customarily obtained prior to the sale
or conveyance;

(h)           Rights of reassignment arising upon final intention to
abandon or release the Assets, or any of them;

(i)            Easements, rights-of-way, servitudes, permits, surface
leases and other rights in respect of surface operations, to the extent that
they do not (i) reduce Seller’s Net Revenue Interest below that shown in Exhibit A-1, (ii) increase Seller’s working
interest above that shown in Exhibit A-1
without a proportionate increase in Net Revenue Interest, or (iii) detract in
any material respect from the value of, or interfere in any material respect
with the use, ownership or operation of, the Assets subject thereto or affected
thereby (as currently used, owned and operated) and which would be acceptable
by a reasonably prudent purchaser engaged in the business of owning and
operating oil and gas properties;

(j)            Calls on Hydrocarbon production under existing Contracts
that are listed on Schedule 1.2(d);

(k)           All rights reserved to or vested in any Governmental Body
to control or regulate any of the Assets in any manner, and all obligations and
duties under all applicable Laws or under any franchise, grant, license or
permit issued by any such Governmental Body;

 

 10

(l)            Any
encumbrance on or affecting the Assets which is discharged by Seller at or
prior to Closing;

(m)          Any
matters shown on Exhibit A-1;

(n)           Any
other liens, charges, encumbrances, defects or irregularities which do not,
individually or in the aggregate, detract in any material respect from the
value of, or interfere in any material respect with the use or ownership of,
the Assets subject thereto or affected thereby (as currently used or owned),
which would be accepted by a reasonably prudent purchaser engaged in the
business of owning and operating oil and gas properties, and which do not
reduce Seller’s Net Revenue Interest below that shown in Exhibit A-1, or increase Seller’s working
interest above that shown in Exhibit A-1
without a proportionate increase in Net Revenue Interest;

(o)           Matters
that would otherwise be considered Title Defects but that do not meet the
Individual Title Deductible set forth in Section
3.4(j);

(p)           Imbalances
associated with the Assets; and

(q)           Liens
granted under applicable joint operating agreements.

Section 3.4            Notice
of Title Defect Adjustments.

(a)           To
assert a claim of a Title Defect prior to Closing, Purchaser must deliver claim
notices to Seller (each a “Title Defect Notice”) on or before April 2, 2007
(the “Title Claim Date”); provided, however, that Purchaser agrees that it
shall furnish Seller once every two (2) weeks, commencing on the  fourteenth (14th) day following  the date of this Agreement until the Title
Claim Date with a Title Defect Notice if any officer of Purchaser or its
Affiliates discover or learn of any Title Defect during such two (2) week
period.  Each Title Defect Notice shall
be in writing and shall include (i) a description of the alleged Title
Defect(s), (ii) the Units, Warranty Wells or other Assets in Exhibit A-1 affected by the Title Defect
(each a “Title Defect Property”), (iii) the Allocated Value of each Title
Defect Property, (iv) supporting documents reasonably necessary for Seller (as
well as any title attorney or examiner hired by Seller) to verify the existence
of the alleged Title Defect(s), and (v) the amount by which Purchaser
reasonably believes the Allocated Value of each Title Defect Property is
reduced by the alleged Title Defect(s) and the computations and information
upon which Purchaser’s belief is based. Notwithstanding any other provision of
this Agreement to the contrary, but subject to Purchaser’s rights in connection
with the special warranty of title referenced in Section 3.1(b), Purchaser shall be deemed to have waived its
right to assert Title Defects of which Seller has not been given notice on or
before the Title Claim Date.  For
purposes hereof, the “Allocated Value” of an Asset shall mean the portion of
the Purchase Price that has been allocated to a particular Unit, Warranty Well
or other Asset in Exhibit A-1.

(b)           Seller
shall have the right, but not the obligation, to deliver to Purchaser on or
before the Title Claim Date, with respect to each Title Benefit, a notice (a “Title
Benefit Notice”) including (i) a description of the Title Benefit, (ii) the
Units, Warranty Wells or other Assets in Exhibit
A-1 affected, (iii) the Allocated Values of the Units, Warranty
Wells or other Assets in Exhibit A-1
subject to such Title Benefit and (iv) the amount by which Seller reasonably
believes the Allocated Value of those Units, Warranty Wells or other Assets is
increased by the Title Benefit, and the computations and information upon which
Seller’s belief is based. Seller 

 11
 

shall be deemed to have waived all Title Benefits of which it has not
given notice to Purchaser on or before the Title Claim Date.

(c)           Seller
shall have the right, but not the obligation, to attempt, at its sole cost, to
cure or remove at any time prior to Closing (the “Cure Period”), unless the
parties otherwise agree, any Title Defects of which it has been advised in
writing by Purchaser.

(d)           Remedies
for Title Defects.

In the event that any Title Defect is not waived by Purchaser or cured
on or before Closing, Purchaser and Seller shall mutually elect to have one of
the following remedies apply:

(i)                                     subject
to the Individual Title Deductible and the Aggregate Defect Deductible, have
the Purchase Price reduced by an amount agreed upon (“Title Defect Amount”)
pursuant to Section 3.4(g) or Section 3.4(i) by Purchaser and Seller as
being the value of such Title Defect, taking into consideration the Allocated
Value of the Property subject to such Title Defect, the portion of the Property
subject to such Title Defect and the legal effect of such Title Defect on the
Property affected thereby; provided, however, that the methodology, terms and
conditions of Section 3.4(g) shall
control any such determination;

(ii)                                  indemnify
Purchaser against all liability, loss, cost and expense resulting from such
Title Defect pursuant to an indemnity agreement (the “Indemnity Agreement”) in
the form attached hereto as Exhibit C;
or

(iii)                               have
Seller retain the entirety of the Property that is subject to such Title
Defect, together with all associated Assets, in which event the Purchase Price
shall be reduced by an amount equal to the Allocated Value of such Property.

In the event that
Purchaser and Seller cannot mutually agree upon one of the foregoing remedies
with respect to a Title Defect asserted by Purchaser pursuant to Section 3.4(a) prior to Closing, then Seller shall, at its
sole election, select the remedy set forth in subsection (i) or (iii) above as
the remedy for such Title Defect.

(e)           With
respect to each Unit, Warranty Well or other Asset in Exhibit A-1 affected by Title Benefits
reported under Section 3.4(b),
subject to the Individual Benefit Deductible and the Aggregate Defect
Deductible, the Purchase Price shall be increased by an amount (the “Title
Benefit Amount”) equal to the increase in the Allocated Value for such Unit, Warranty
Well or other Asset in Exhibit A-1
caused by such Title Benefits, as determined pursuant to Section 3.4(h).

(f)            Section 3.4(d) shall be the exclusive right
and remedy of Purchaser with respect to Title Defects asserted by Purchaser
pursuant to Section 3.4(a).

(g)           The
Title Defect Amount resulting from a Title Defect shall be the amount by which
the Allocated Value of the Title Defect Property is reduced as a result of the
existence of such Title Defect and shall be determined in accordance with the
following methodology, terms and conditions:

 12
 

(i)                                     if
Purchaser and Seller agree on the Title Defect Amount, that amount shall be the
Title Defect Amount;

(ii)                                  if
the Title Defect is a lien, encumbrance or other charge which is undisputed and
liquidated in amount, then the Title Defect Amount shall be the amount
necessary to be paid to remove the Title Defect from the Title Defect Property;

(iii)                               if
the Title Defect represents a discrepancy between (A) the Net Revenue Interest
for any Title Defect Property and (B) the Net Revenue Interest stated on Exhibit A-1, then the Title Defect Amount
shall be the product of the Allocated Value of such Title Defect Property
multiplied by a fraction, the numerator of which is the Net Revenue Interest
decrease and the denominator of which is the Net Revenue Interest stated on Exhibit A-1;

(iv)                              if
the Title Defect represents an obligation, encumbrance, burden or charge upon
or other defect in title to the Title Defect Property of a type not described
in subsections (i), (ii) or (iii) above, the Title Defect Amount shall be
determined by taking into account the Allocated Value of the Title Defect
Property, the portion of the Title Defect Property affected by the Title
Defect, the legal effect of the Title Defect, the potential economic effect of
the Title Defect over the life of the Title Defect Property, the values placed
upon the Title Defect by Purchaser and Seller and such other factors as are
necessary to make a proper evaluation; and

(v)                                 notwithstanding
anything to the contrary in this Article 3,
the aggregate Title Defect Amounts attributable to the effects of all Title
Defects upon any Title Defect Property shall not exceed the Allocated Value of
the Title Defect Property.

(h)           The
Title Benefit Amount for any Title Benefit shall be the product of the
Allocated Value of the affected Unit, Warranty Well or other Asset in Exhibit A-1 multiplied by a fraction, the
numerator of which is the Net Revenue Interest increase and the denominator of
which is the Net Revenue Interest stated on Exhibit
A-1.

(i)            Seller
and Purchaser shall attempt in good faith to agree on all Title Defect Amounts
and Title Benefit Amounts prior to Closing. 
If Seller and Purchaser are unable to agree by Closing, the Title Defect
Amounts and Title Benefit Amounts in dispute shall be exclusively and finally
resolved by arbitration pursuant to this Section
3.4(i). There shall be a single arbitrator, who shall be a title
attorney with at least ten (10) years experience in oil and gas titles
involving properties in the regional area in which the Properties are located,
as selected by mutual agreement of Purchaser and Seller within fifteen (15)
Business Days after the end of the Cure Period, and absent such mutual
agreement, by the Houston office of the American Arbitration Association (the “Title
Arbitrator”). The arbitration proceeding shall be held in Houston, Texas and
shall be conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, to the extent such rules do not conflict with
the terms of this Section. The Title Arbitrator’s determination shall be made
within fifteen (15) Business Days after submission of the matters in dispute
and shall be final and binding upon both parties, without right of appeal. In
making his determination, the Title Arbitrator shall be bound by the rules set
forth in Section 3.4(g) and Section 3.4(h) and may consider such other
matters as in 

 13
 

the opinion of the Title Arbitrator are necessary or helpful to make a
proper determination. Additionally, the Title Arbitrator may consult with and
engage disinterested third parties to advise the arbitrator, including without
limitation petroleum engineers.  The
Title Arbitrator shall act as an expert for the limited purpose of determining
the specific disputed Title Defect Amounts and Title Benefit Amounts submitted
by either party and may not award damages, interest or penalties to either
party with respect to any matter. Seller and Purchaser shall each bear its own
legal fees and other costs of presenting its case.  Each party shall bear one-half of the costs
and expenses of the Title Arbitrator, including any costs incurred by the Title
Arbitrator that are attributable to such third party consultation.  Within ten (10) days after the Title Arbitrator
delivers written notice to Purchaser and Seller of his award with respect to a
Title Defect Amount or a Title Benefit Amount, (i) Purchaser shall pay to
Seller the amount, if any, so awarded by the Title Arbitrator to Seller, plus
interest payable on such amount at the Agreed Interest Rate from (but not
including) the Closing Date to (and including) the date on which such amount is
paid to Seller and (ii) Seller shall pay to Purchaser the amount, if any,
so awarded by the Title Arbitrator to Purchaser, plus interest payable on such
amount at the Agreed Interest Rate from (but not including) the Closing Date to
(and including) the date on which such amount is paid to Purchaser.

(j)            Notwithstanding
anything to the contrary, (i) in no event shall there be any adjustments to the
Purchase Price or other remedies provided by Seller for any individual uncured
Title Defect for which the Title Defect Amount therefor does not exceed $50,000
(“Individual Title Deductible”); and (ii) in no event shall there be any adjustments
to the Purchase Price or other remedies provided by Seller for uncured Title
Defects unless the aggregate Title Defect Amounts attributable to all uncured
Title Defects, taken together with the aggregate Environmental Defect Amounts
attributable to all uncured Environmental Defects, exceeds a deductible in an
amount equal to $17,000,000 (“Aggregate Defect Deductible”), after which point
adjustments to the Purchase Price or other remedies shall be made or available
to Purchaser only with respect to uncured Title Defects and uncured
Environmental Defects where the aggregate Title Defect Amounts and
Environmental Defect Amounts attributable thereto are in excess of such
Aggregate Defect Deductible.  Notwithstanding
anything to the contrary, (i) in no event shall there be any adjustments to the
Purchase Price for any individual Title Benefit for which the Title Benefit
Amount does not exceed $50,000 (“Individual Benefit Deductible”); and (ii) in
no event shall there be any adjustments to the Purchase Price for any Title
Benefit unless the aggregate Title Benefit Amounts attributable to all such
Title Benefits, exceeds a deductible in an amount equal to $17,000,000 (“Aggregate
Benefit Deductible”), after which point adjustments to the Purchase Price shall
be made only with respect to such Title Benefit Amounts in excess of such
Aggregate Benefit Deductible.

Section 3.5            Casualty
or Condemnation Loss.

(a)           From
and after the Effective Time, but subject to the provisions of Section 3.5(b) and (c) below, Purchaser shall assume all risk
of loss with respect to and any change in the condition of the Assets and for
production of Hydrocarbons through normal depletion (including but not limited
to the watering out of any Well, collapsed casing or sand infiltration of any
Well) and the depreciation of personal property due to ordinary wear and tear
with respect to the Assets.

(b)           Subject
to the provisions of Section 8.1(e)
and Section 8.2(e) hereof, if,
after the date of this Agreement but prior to the Closing Date, any portion of
the Assets is destroyed by fire or other casualty or is taken in condemnation
or under right of eminent domain, and the loss as a result of such individual
casualty or taking, taken together with all other casualty losses and 

 14
 

takings, exceeds $2,600,000,  the
transactions evidenced by this Agreement shall nevertheless be consummated and
Purchaser shall elect by written notice to Seller prior to Closing either (i)
to cause the Assets affected by any casualty or taking to be repaired or
restored to at least its condition prior to such casualty, at Seller’s sole
cost, as promptly as reasonably practicable (which work may extend after the
Closing Date), (ii) to have Seller indemnify Purchaser through a document
reasonably acceptable to Seller and Purchaser against any costs or expenses
that Purchaser reasonably incurs to repair the Assets subject to any casualty
or taking or (iii) to treat such casualty or taking as a Title Defect with
respect to the affected Property or Properties under Section 3.4; provided, however, that notwithstanding anything
herein provided to the contrary, Purchaser cannot require Seller to comply with
the remedy set forth in item (i) of this Section
3.5(b) without Seller’s prior written consent.  In each case, Seller shall retain all rights
to insurance and other claims against third parties with respect to the
casualty or taking except to the extent the parties otherwise agree in writing.

(c)           If,
after the date of this Agreement but prior to the Closing Date, any portion of
the Assets is destroyed by fire or other casualty or is taken in condemnation
or under right of eminent domain, and the loss to the Assets as a result of
such individual casualty or taking, taken together with all other casualty
losses and takings, is $2,600,000 or less, the transaction evidenced by this
Agreement shall nevertheless be consummated and Seller shall, at Closing, pay
to Purchaser all sums paid to Seller by third parties by reason of such
casualty or taking and shall assign, transfer and set over to Purchaser all of
Seller’s right, title and interest (if any) in insurance claims, unpaid awards,
and other rights against third parties (other than Affiliates of Seller and its
and their directors, officers, employees and agents) arising out of the casualty
or taking.

Section 3.6            Limitations
on Applicability.

Subject to the following sentence, the right of
Purchaser to assert a Title Defect under this Agreement shall terminate as of
the Title Claim Date, provided there shall be no termination of Purchaser’s or
Seller’s rights under Section 3.4
with respect to any bona fide Title Defect properly reported in a Title Defect
Notice or bona fide Title Benefit Claim properly reported in a Title Benefit
Notice on or before the Title Claim Date. Thereafter, Purchaser’s sole and
exclusive rights and remedies with regard to title to the Assets shall be as
set forth in, and arising under, the Conveyance transferring the Assets from
Seller to Purchaser.

Section 3.7            Government
Approvals Respecting Assets.

(a)           Federal
and State Approvals.  Purchaser
shall, within thirty (30) days after Closing and at Purchaser’s own expense,
file for approval with the applicable Governmental Bodies all assignment
documents and other state and federal transfer documents required to effectuate
the transfer of the Assets.  Purchaser
further agrees, promptly after Closing, to take all other actions reasonably
required of it by federal or state agencies having jurisdiction to obtain all
requisite regulatory approvals with respect to this transaction, and to use its
commercially reasonable efforts to obtain the approval by such federal or state
agencies, as applicable, of Seller’s assignment documents requiring federal or
state approval in order for Purchaser to be recognized by the federal or state
agencies as the owner of the Assets. 
Purchaser shall provide Seller with the resignation and designation of
operator instruments, and approved copies of the assignment documents and other
state and federal transfer documents, as soon as they are available.

 15
 

(b)           Title
Pending Governmental Approvals. 
Until all of the governmental approvals provided for in Section 3.7(a) have been obtained, the
following shall occur with respect to the affected portion of the Assets:

(i)                                     Seller
shall continue to hold record title to the affected Leases and other affected
portion of the Assets as nominee for Purchaser;

(ii)                                  Purchaser
shall be responsible for all Seller Assumed Obligations with respect to the
affected Leases and other affected portion of the Assets as if Purchaser was
the record owner of such Leases and other portion of the Assets as of the
Effective Time; and

(iii)                               Seller
shall act as Purchaser’s nominee but shall be authorized to act only upon and
in accordance with Purchaser’s instructions, and Seller shall have no
authority, responsibility or discretion to perform any tasks or functions with
respect to the affected Leases and other affected portion of the Assets other
than those which are purely administrative or ministerial in nature, unless
otherwise specifically requested and authorized by Purchaser in writing.

(c)           Denial
of Required Governmental Approvals. 
If the federal or state agency fails to do so within twenty-four (24)
months after the Closing, Seller may continue to hold record title to the
affected Leases and other affected Assets as Purchaser’s nominee or, at Seller’s
option, it may terminate this Agreement and all its obligations hereunder as to
the affected Leases and other affected portion of the Assets by giving sixty
(60) days written notice to Purchaser. 
Upon such termination:  (i) this
Agreement shall be null and void and terminated as to the affected Leases and
other affected portion of the Assets, (ii) Purchaser shall promptly reassign
and return to Seller the assignment documents and any and all other documents,
materials and data previously delivered to Purchaser with respect to the
affected  Leases and other affected
portion of the Assets, and (iii) Seller shall pay to Purchaser the Allocated
Value of the affected Property (without interest), less the proceeds of
Hydrocarbon production received by Purchaser (which Purchaser may retain as its
sole property) net of all expenses, overhead, royalties, and costs of
operations (including plugging and abandonment expenses but excluding mortgage
interest and any burdens, liens, or encumbrances created by Purchaser which
must be released prior to this payment) attributable to the affected Leases or
other affected portion of the Assets from the Effective Time forward, plus
interest payable on such net amount at the Agreed Interest Rate from (but not
including) the Closing Date to (and including) the date on which such amount is
paid to Purchaser.  In no event, however,
shall Seller ever be required to reimburse Purchaser for any expenditures
associated with workovers, recompletions, sidetracks, or the drilling,
completion or plugging and abandonment of wells drilled or work performed by
Seller or any of its Affiliates.

ARTICLE 4

ENVIRONMENTAL MATTERS

Section 4.1            Assessment.

From and after the date of execution of this Agreement
until the Closing Date, Seller shall afford to Purchaser and its officers,
employees, agents and authorized representatives reasonable access to the
Assets, including the Records in accordance with Section 7.1.  During such period, Seller shall also make
available to Purchaser, upon reasonable notice during 

 16
 

normal business hours,
Seller’s personnel knowledgeable with respect to the Assets in order that
Purchaser may make such diligent investigation as Purchaser considers
desirable.  Upon notice to Seller,
Purchaser shall have the right to conduct an environmental assessment of all or
any portion of the Properties (the “Assessment”), to be conducted by a
reputable environmental consulting or engineering firm approved in advance in
writing by Seller (such approval not to be unreasonably withheld), but only to
the extent that Seller may grant such right without violating any obligations
to any third party (provided that Seller shall use its commercially reasonable
efforts to obtain any necessary third party consents to any Assessment to be
conducted by Purchaser).  The Assessment
shall be conducted at the sole cost and expense of Purchaser, and shall be
subject to the indemnity provisions of Section 4.4.  Prior to conducting any sampling, boring,
drilling or other invasive investigative activity with respect to the
Properties (“Invasive Activity”), Purchaser shall furnish for Seller’s review a
proposed scope of such Invasive Activity, including a description of the
activities to be conducted and a description of the approximate locations of
such activities.  If any of the proposed
activities may unreasonably interfere with normal operation of the Properties,
Seller may request an appropriate modification of the proposed Invasive
Activity.  Seller shall have the right to
be present during any Assessment of the Properties and shall have the right, at
its option and expense, to split samples with Purchaser.  After completing any Assessment of the
Properties, Purchaser shall, at its sole cost and expense, restore the
Properties to their condition prior to the commencement of such Assessment,
unless Seller requests otherwise, and shall promptly dispose of all drill
cuttings, corings, or other investigative-derived wastes generated in the
course of the Assessment.  Purchaser
shall maintain, and shall cause its officers, employees, representatives,
consultants and advisors to maintain, all information obtained by Purchaser
pursuant to any Assessment or other due diligence activity as strictly
confidential until the Closing occurs, unless disclosure of any facts
discovered through such Assessment is required under any Laws.  Purchaser shall provide Seller with a copy of
the final draft of all environmental reports prepared by, or on behalf of,
Purchaser with respect to any Assessment or Invasive Activity conducted on the
Properties.  In the event that any
necessary disclosures under applicable Laws are required with respect to
matters discovered by any Assessment conducted by, for or on behalf of
Purchaser, Purchaser agrees that Seller shall be the responsible party for
disclosing such matters to the appropriate Governmental Bodies; provided that,
if Seller fails to promptly make such disclosure and Purchaser or any of its
Affiliates is legally obligated to make such disclosure, such Person shall have
the right to fully comply with such legal obligation.

Section 4.2            NORM,
Wastes and Other Substances.

Purchaser acknowledges that the Assets have been used
for the exploration, development, and production of Hydrocarbons and that there
may be petroleum, produced water, wastes, or other substances or materials
located in, on or under the Properties or associated with the Assets.  Equipment and sites included in the Assets
may contain Hazardous Materials, including NORM.  NORM may affix or attach itself to the inside
of wells, materials, and equipment as scale, or in other forms.  The wells, materials, and equipment located
on the Properties or included in the Assets may contain Hazardous Materials,
including NORM.  Hazardous Materials,
including NORM, may have come in contact with various environmental media,
including without limitation, water, soils or sediment.  Special procedures may be required for the
assessment, remediation, removal, transportation, or disposal of environmental
media and Hazardous Materials, including NORM, from the Assets.

 17
 

Section 4.3            Environmental
Defects.

If, as a result of its investigation pursuant to Section 4.1, Purchaser determines that with respect to the
Assets, there exists a violation of an Environmental Law (other than with
respect to NORM) (in each case, an “Environmental Defect”), then on or prior to
April 17, 2007 (the “Environmental Claim Date”), Purchaser may notify Seller in
writing of such Environmental Defect (an “Environmental Defect Notice”).  For all purposes of this Agreement, Purchaser
shall be deemed to have waived any Environmental Defect which Purchaser fails
to assert as an Environmental Defect by an Environmental Defect Notice received
by Seller on or before the Environmental Claim Date.  To be effective, each such notice shall set
forth (i) a description of the matter constituting the alleged Environmental
Defect, (ii) the Units/Warranty Wells and associated Assets affected by the
Environmental Defect, (iii) the estimated Lowest Cost Response to eliminate the
Environmental Defect in question (the “Environmental Defect Amount”), and (iv)
supporting documents reasonably necessary for Seller to verify the existence of
the alleged Environmental Defect and the Environmental Defect Amount.  Commencing on February 15, 2007, Purchaser
shall furnish Seller once every two (2) weeks until the Environmental Claim
Date with an Environmental Defect Notice if any officer of Purchaser or its
Affiliates discover or become aware of an Environmental Defect during such two
(2) week period.  Seller shall have the
right, but not the obligation, to cure any Environmental Defect before Closing
or, provided that the parties shall have agreed to the general plan of
remediation with respect to such Environmental Defect and the time period by
which such remediation shall take place, after Closing.  If Seller disagrees with any of Purchaser’s
assertions with respect to the existence of an Environmental Defect or the
Environmental Defect Amount, Purchaser and Seller will attempt to resolve the
dispute prior to Closing.  If the dispute
cannot be resolved within ten (10) days of the first meeting of Purchaser and
Seller, either party may submit the dispute to an environmental consultant
approved in writing by Seller and Purchaser that is experienced in
environmental corrective action at oil and gas properties in the relevant
jurisdiction and that shall not have performed professional services for either
party or any of their respective Affiliates during the previous five years (the
“Independent Expert”).  The Independent
Expert may elect to conduct the dispute resolution proceeding by written
submissions from Purchaser and Seller with exhibits, including interrogatories,
supplemented with appearances by Purchaser and Seller, if necessary, as the
Independent Expert may deem necessary. 
After the parties and Independent Expert have had the opportunity to
review all such submissions, the Independent Expert shall call for a final,
written offer of resolution from each party. 
The Independent Expert shall render its decision within twenty (20)
Business Days of receiving such offers by selecting one or the other of the
offers. The Independent Expert may not award damages, interest or penalties to
either party with respect to any matter. 
The decision of the Independent Expert shall be final and binding upon
both parties, without right of appeal. 
Seller and Purchaser shall each bear its own legal fees and other costs
of presenting its case to the Independent Expert. Each party shall bear
one-half of the costs and expenses of the Independent Expert.  The parties shall adjust the Purchase Price
to reflect the Environmental Defect Amounts, as agreed by the parties or as
determined by the Independent Expert, for all uncured Environmental Defects;
provided, that notwithstanding anything to the contrary, (a) in no event shall
there be any adjustments to the Purchase Price for any individual uncured
Environmental Defect for which the Environmental Defect Amount therefor does
not exceed $100,000 (“Individual Environmental Deductible”); and (b) in no
event shall there be any adjustments to the Purchase Price for any uncured Environmental
Defect unless the aggregate Environmental Defect Amount attributable to all
such Environmental Defects, taken together with the aggregate Title Defect
Amounts attributable to all uncured Title Defects, exceeds the Aggregate Defect
Deductible, after which point Purchaser shall be entitled to adjustments to the
Purchase Price or other remedies only with respect to uncured Title Defects and
uncured 

 18
 

Environmental Defects
where the aggregate Title Defect Amounts and Environmental Defect Amounts
attributable thereto are in excess of such Aggregate Defect Deductible.  To the extent the Independent Expert fails to
determine any disputed Environmental Defect Amounts prior to Closing, then,
within ten (10) days after the Independent Expert delivers written notice to
Purchaser and Seller of his award with respect to an Environmental Defect
Amount, Seller shall pay to Purchaser the amount, if any, so awarded by the
Independent Examiner, plus interest payable on such amount at the Agreed
Interest Rate from (but not including) the Closing Date to (and including) the
date on which such amount is paid to Purchaser.

Section 4.4            Inspection
Indemnity.

PURCHASER HEREBY AGREES TO
DEFEND, INDEMNIFY, RELEASE, PROTECT, SAVE AND HOLD HARMLESS THE SELLER
INDEMNIFIED PERSONS FROM AND AGAINST ANY AND ALL LOSSES ARISING OUT OF OR
RELATING TO ANY DUE DILIGENCE ACTIVITY CONDUCTED BY PURCHASER OR ITS AGENTS,
WHETHER BEFORE OR AFTER THE EXECUTION OF THIS AGREEMENT, REGARDLESS OF FAULT.  The
indemnity obligation set forth in this Section 4.4
shall survive the Closing or termination of this Agreement.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SELLER

Section 5.1            Generally.

(a)           Any
representation or warranty qualified “to the knowledge of Seller” or “to Seller’s
knowledge” or with any similar knowledge qualification is limited to matters
within the actual knowledge of the officers of Seller or its Affiliates or
those employees of Seller or any of its Affiliates who have responsibility for
the Assets and who have the following titles: 
General Manager and Production Engineering Manager.  “Actual knowledge” for purposes of this
Agreement means information actually personally known by such Persons.

(b)           Inclusion
of a matter on a Schedule in relation to a representation or warranty which
addresses matters having a Material Adverse Effect shall not be deemed an
indication that such matter does, or may, have a Material Adverse Effect.
Likewise, the inclusion of a matter on a Schedule in relation to a
representation or warranty shall not be deemed an indication that such matter
necessarily would, or may, breach such representation or warranty absent its
inclusion on such Schedule. Matters may be disclosed on a Schedule to this
Agreement for purposes of information only.

(c)           Subject
to the foregoing provisions of this Section
5.1, the disclaimers and waivers contained in Sections 11.10, 11.11 and 11.12
and the other terms and conditions of this Agreement, Seller represents and
warrants to Purchaser the matters set out in the remainder of this Article 5.

Section 5.2            Existence
and Qualification.

Each of APC and Howell is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to do business as a foreign corporation where
the Assets owned by it are located, except where the failure to so qualify
would not have a Material Adverse Effect. 
Each of AEP and KMOG is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of 

 19
 

Delaware and is duly
qualified to do business as a foreign limited partnership where the Assets
owned by it are located, except where the failure to so qualify would not have
a Material Adverse Effect.

Section 5.3            Power.

Seller has the corporate or partnership power to enter
into and perform this Agreement and consummate the transactions contemplated by
this Agreement.

Section 5.4            Authorization
and Enforceability.

The execution, delivery and performance of this
Agreement, and the performance of the transactions contemplated hereby, have
been duly and validly authorized by all necessary corporate or partnership
action on the part of Seller. This Agreement has been duly executed and
delivered by Seller (and all documents required hereunder to be executed and
delivered by Seller at Closing will be duly executed and delivered by Seller)
and this Agreement constitutes, and at the Closing such documents will
constitute, the valid and binding obligations of Seller, enforceable against
Seller in accordance with their terms except as such enforceability may be
limited by applicable bankruptcy or other similar laws affecting the rights and
remedies of creditors generally as well as to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law).

Section 5.5            No
Conflicts.

Subject to compliance with the Preference Rights and
Transfer Requirements set forth in Schedule 5.13 and
the HSR Act, the execution, delivery and performance of this Agreement by
Seller, and the transactions contemplated by this Agreement will not (i)
violate any provision of the certificate of incorporation, bylaws, limited
partnership agreement or similar governing documents of Seller, (ii) result in
default (with due notice or lapse of time or both) or the creation of any lien
or encumbrance or give rise to any right of termination, cancellation or
acceleration under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license or agreement to which Seller is a party or
which affect the Assets, (iii) violate any judgment, order, ruling, or decree
applicable to Seller as a party in interest, (iv) violate any Laws applicable
to Seller or any of the Assets, except for (a) rights to consent by, required
notices to, filings with, approval or authorizations of, or other actions by
any Governmental Body where the same are not required prior to the assignment
of the related Asset or they are customarily obtained subsequent to the sale or
conveyance thereof and (b) any matters described in clauses (ii), (iii) or (iv)
above which would not have a Material Adverse Effect.

Section 5.6            Liability
for Brokers’ Fees.

Purchaser shall not directly or indirectly have any
responsibility, liability or expense, as a result of undertakings or agreements
of Seller or its Affiliates, for brokerage fees, finder’s fees, agent’s commissions
or other similar forms of compensation in connection with this Agreement or any
agreement or transaction contemplated hereby.

Section 5.7            Litigation.

With respect to the Assets and Seller’s or any of its
Affiliates’ ownership, operation, development, maintenance, or use of any of
the Assets, except as set forth in: (i) Schedule 5.7(a),
no proceeding, arbitration, action, suit, pending settlement, or other legal
proceeding of

 

 20

any kind or nature before
or by any Governmental Body (each, a “Proceeding,” and collectively “Proceedings”)
(including any take-or-pay claims) to which Seller or any of its Affiliates is
a party and which relates to the Assets is pending or, to Seller’s knowledge,
threatened against Seller or any of its Affiliates; (ii) Schedule 5.7(a), to Seller’s knowledge, no Proceeding or
investigation to which Seller is not a party which relates to the Assets is
pending or threatened; and (iii) Schedule 5.7(b),
no notice in writing from any third party (including any Governmental Body) has
been received by Seller or any of its Affiliates threatening any Proceeding
relating to the Assets which could have a Material Adverse Effect (excluding
any notices relating to any Environmental Liabilities or Environmental Law).

Section 5.8            Taxes
and Assessments.

(a)           With
respect to all Taxes related to the Assets, except as set forth on Schedule 5.8, (i) all reports, returns,
statements (including estimated reports, returns or statements), and other
similar filings (the “Tax Returns”) relating to the Assets required to be filed
by Seller with respect to such Taxes have been timely filed with the
appropriate Governmental Body in all jurisdictions in which such Tax Returns
are required to be filed; and (ii) such Tax Returns are true and correct in all
material respects, and (iii) all Taxes due with respect to such Tax Returns
have been paid, except those being contested in good faith.

(b)           With
respect to all Taxes related to the Assets, except as set forth on Schedule 5.8, (i) there are not currently
in effect any extensions or waivers of any statute of limitations of any
jurisdiction regarding the assessment or collection of any such Tax; (ii) there
are no Proceedings against the Assets or Seller by any Governmental Body; and
(iii) there are no Tax liens on any of the Assets except for liens for Taxes
not yet due.

Section 5.9            Compliance
with Laws.

Except as disclosed on Schedule 5.9,
the Assets are, and the ownership, operation, development, maintenance, and use
of any of the Assets are, in compliance with the provisions and requirements of
all Laws of all Governmental Bodies having jurisdiction with respect to the
Assets, or the ownership, operation, development, maintenance, or use of any of
the Assets, except where the failure to so comply would not have a Material
Adverse Effect.  Notwithstanding the
foregoing, Seller makes no representation or warranty, express or implied,
under this Section 5.9 relating to any
Environmental Liabilities or Environmental Law.

Section 5.10          Contracts.

Except as disclosed on Schedule
5.10, to the knowledge of Seller, Seller has paid its share of all
costs (including all Property Costs) payable by it under the contracts and
agreements described in Schedule 1.2(d),
or otherwise included in the Contracts. 
Seller is in compliance and, to Seller’s knowledge, all counterparties
are in compliance under all Contracts, except as disclosed on Schedule 5.10 and except for such non-compliance as would
not, individually or the aggregate, have a Material Adverse Effect.

Section 5.11          Payments
for Hydrocarbon Production.

Except as set forth on Schedule
5.11, (a) to the knowledge of Seller, all rentals, royalties, excess
royalty, overriding royalty interests, Hydrocarbon production payments, and
other payments due and payable by Seller to overriding royalty holders and
other interest owners under or with respect to the Assets and the Hydrocarbons
produced therefrom or 

 21
 

attributable thereto,
have been paid, and (b) Seller is not obligated under any contract or agreement
for the sale of gas from the Assets containing a take-or-pay, advance payment,
prepayment, or similar provision, or under any gathering, transmission, or any
other contract or agreement with respect to any of the Assets to gather,
deliver, process, or transport any gas 
without then or thereafter receiving full payment therefor.

Section 5.12          Governmental
Authorizations.

To Seller’s knowledge, except as disclosed on Schedule 5.12, Seller has obtained and is maintaining all
material federal, state and local governmental licenses, permits, franchises,
orders, exemptions, variances, waivers, authorizations, certificates, consents,
rights, privileges and applications therefor (the “Governmental Authorizations”)
that are presently necessary or required for the ownership and operation of the
Seller Operated Assets as currently owned and operated (excluding Governmental
Authorizations required by Environmental Law). To Seller’s knowledge, except as
disclosed in Schedule 5.7(a), Schedule 5.7(b) or Schedule 5.12,
(i) Seller has operated the Seller Operated Assets in all material respects in
accordance with the conditions and provisions of such Governmental
Authorizations, and (ii) no written notices of material violation have been
received by Seller, and no Proceedings are pending or, to Seller’s knowledge,
threatened in writing that might result in any material modification,
revocation, termination or suspension of any such Governmental Authorizations
or which would require any material corrective or remediation action by Seller.

Section 5.13          Preference
Rights and Transfer Requirements.

To the knowledge of Seller, Schedule
5.13 sets forth all Preference Rights and Transfer Requirements
contained in easements, rights-of-way or equipment leases included in the
Assets. None of the other Assets, or any portion thereof, is subject to any
Preference Right or Transfer Requirement which may be applicable to the
transactions contemplated by this Agreement, except for Preference Rights and
Transfer Requirements as are set forth on Schedule 5.13.

Section 5.14          Payout
Balances.

To Seller’s knowledge, Schedule
5.14 contains a complete and accurate list of the status of any “payout”
balance, as of the respective dates set forth therein, for the Wells and Units
listed on Exhibit A-1 subject to a reversion or
other adjustment at some level of cost recovery or payout (or passage of time
or other event other than termination of a Lease by its terms).

Section 5.15          Outstanding
Capital Commitments.

As of the date hereof, there are no outstanding AFEs
or other commitments to make capital expenditures which are binding on the
Assets and which Seller reasonably anticipates will individually require
expenditures by the owner of the Assets after the Effective Time in excess of
$250,000  other than those shown on Schedule 5.15.

Section 5.16          Imbalances.

To Seller’s knowledge, Schedule
5.16 accurately sets forth in all material respects all of Seller’s
Imbalances as of the respective dates set forth therein, arising with respect
to the Assets and, except as disclosed in Schedule 5.16,
(i) no Person is entitled to receive any 

 22
 

material portion of
Seller’s Hydrocarbons produced from the Assets or to receive material cash or
other payments to “balance” any disproportionate allocation of Hydrocarbons
produced from the Assets under any operating agreement, gas balancing or
storage agreement, gas processing or dehydration agreement, gas transportation
agreement, gas purchase agreement, or other agreements, whether similar or
dissimilar, (ii) Seller is not obligated to deliver any material quantities of
gas or to pay any material penalties or other material amounts, in connection
with the violation of any of the terms of any gas contract or other agreement
with shippers with respect to the Assets, and (iii) Seller is not obligated to
pay any material penalties or other material payments under any gas
transportation or other agreement as a result of the delivery of quantities of
gas from the Wells in excess of the contract requirements.  Except as set forth on Schedule
5.16, Seller has not received, or is not obligated to receive,
prepayments (including payments for gas not taken pursuant to “take or pay”
arrangements) for any of Seller’s share of the Hydrocarbons produced from the
Properties, as a result of which the obligation exists to deliver Hydrocarbons
produced from the Properties after the Effective Time without then or
thereafter receiving payment therefor.

Section 5.17          Condemnation.

To Seller’s knowledge, there is no actual or
threatened taking (whether permanent, temporary, whole or partial) of any part
of the Properties by reason of condemnation or the threat of condemnation.

Section 5.18          Bankruptcy.

There are no bankruptcy, reorganization, or
receivership proceedings pending against, or, to Seller’s knowledge, being
contemplated by or threatened against Seller.

Section 5.19          PUHCA/NGA.

Seller is not a “holding company,” or a “subsidiary
company” of a “holding company,” or an “affiliate” of a “holding company,” or
an “affiliate” of a “subsidiary” of a “holding company,” or a “public-utility
company” within the meaning of the Public Utility Holding Company Act of 2005,
as amended. No consent is required in connection with the transaction
contemplated hereby under the Natural Gas Policy Act of 1978, as amended (“NGPA”).
Seller is not a natural gas company within the meaning of the Natural Gas Act
of 1938 (“NGA”), and neither Seller nor any of its Affiliates has operated any
of the Assets in a manner that would subject Seller or any of its Affiliates to
the jurisdiction of, or invoke regulation by, the Federal Energy Regulatory
Commission under the NGPA or the NGA with respect to the Assets.

Section 5.20          Investment
Company.

Seller is not an investment company or a company
controlled by an investment company within the meaning of the Investment
Company Act of 1940, as amended.

Section 5.21          Production
Allowables.

To Seller’s knowledge, Seller has not received written
notice that there has been any change proposed in the production allowables for
any Wells listed on Exhibit A-1.

 23
 

Section 5.22          Plugging
and Abandonment.

To Seller’s knowledge, since the Effective Time
through the date of this Agreement, Seller has not abandoned, and is not in the
process of abandoning, any Wells (nor has it removed, nor is it in the process
of removing, any material items of Personal Property, except those replaced by
items of substantially equivalent suitability and value).  Except as set forth in Schedule
5.22 or as otherwise would not have a Material Adverse Effect, there
are no Wells located on the Leases or the Lands that:

(a)           Seller
has received an order from any Governmental Body requiring that such Well be
plugged and abandoned;

(b)           formerly
produced but that are currently shut in or temporarily abandoned; and

(c)           have
been plugged and abandoned but have not been plugged in accordance with all
applicable requirements of each Governmental Body having jurisdiction over the
Properties.

Section 5.23          Foreign
Person.

Seller is not a “foreign person” within the meaning of
Section 1445 of the Code.

Section 5.24          Collective
Bargaining Agreements.

Neither Seller or any of its Affiliates has agreed to
recognize any labor union or other collective bargaining representative of, nor
has any labor union or other collective bargaining representative been
certified as the exclusive bargaining representative of, any individual
employed or otherwise engaged by Seller (or an Affiliate thereof) who is
primarily involved in the business associated with the Assets.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Seller the
following:

Section 6.1            Existence
and Qualification.

Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation;
and Purchaser is duly qualified to do business as a foreign corporation in
every jurisdiction in which it is required to qualify in order to conduct its
business, except where the failure to so qualify would not have a material
adverse effect on Purchaser; and Purchaser is or will be as of Closing duly
qualified to do business as a foreign corporation in the respective
jurisdictions where the Assets are located.

Section 6.2            Power.

Purchaser has the corporate power to enter into and
perform this Agreement and consummate the transactions contemplated by this
Agreement.

 24
 

Section 6.3            Authorization
and Enforceability.

The execution, delivery and performance of this
Agreement, and the performance of the transaction contemplated hereby, have
been duly and validly authorized by all necessary corporate action on the part
of Purchaser. This Agreement has been duly executed and delivered by Purchaser
(and all documents required hereunder to be executed and delivered by Purchaser
at Closing will be duly executed and delivered by Purchaser) and this Agreement
constitutes, and at the Closing such documents will constitute, the valid and
binding obligations of Purchaser, enforceable against Purchaser in accordance
with their terms except as such enforceability may be limited by applicable
bankruptcy or other similar laws affecting the rights and remedies of creditors
generally as well as to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

Section 6.4            No
Conflicts.

Subject to compliance with the HSR Act, the execution,
delivery and performance of this Agreement by Purchaser, and the  transactions contemplated by this Agreement
will not (i) violate any provision of the organizational documents of
Purchaser, (ii) result in a default (with due notice or lapse of time or both)
or the creation of any lien or encumbrance or give rise to any right of
termination, cancellation or acceleration under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license or agreement to
which Purchaser is a party, (iii) violate any judgment, order, ruling, or
regulation applicable to Purchaser as a party in interest, or (iv) violate any
Law applicable to Purchaser or any of its assets, or (v) require any filing
with, notification of or consent, approval or authorization of any Governmental
Body or authority, except any matters described in clauses (ii), (iii), (iv) or
(v) above which would not have a material adverse effect on Purchaser or the
transactions contemplated hereby.

Section 6.5            Liability
for Brokers’ Fees.

Seller shall not directly or indirectly have any
responsibility, liability or expense, as a result of undertakings or agreements
of Purchaser or its Affiliates, for brokerage fees, finder’s fees, agent’s
commissions or other similar forms of compensation in connection with this
Agreement or any agreement or transaction contemplated hereby.

Section 6.6            Litigation.

There are no Proceedings pending, or to the actual
knowledge of Purchaser, threatened in writing before any Governmental Body
against Purchaser or any Affiliate of Purchaser which are reasonably likely to
impair materially Purchaser’s ability to perform its obligations under this
Agreement.

Section 6.7            Financing.

At Closing, Purchaser will have sufficient sources of
immediately available funds (in United States dollars) to enable it to pay the
Closing Payment to Seller at the Closing and to otherwise satisfy its
obligations under this Agreement.

 25
 

Section 6.8            Limitation.

Except for the representations and warranties
expressly made by Seller in Article 5 of
this Agreement, in the Conveyance or confirmed in any certificate furnished or
to be furnished to Purchaser pursuant to this Agreement, Purchaser represents
and acknowledges that (i) there are no representations or warranties, express,
statutory or implied, as to the Assets or prospects thereof, and (ii) Purchaser
has not relied upon any oral or written information provided by Seller.  Without limiting the generality of the
foregoing, subject to Section 5.7,
Purchaser represents and acknowledges that Seller has made and will make no
representation or warranty regarding any matter or circumstance relating to
Environmental Laws, Environmental Liabilities, the release of materials into
the environment or protection of human health, safety, natural resources or the
environment or any other environmental condition of the Assets.  Purchaser further represents and acknowledges
that it is knowledgeable of the oil and gas business and of the usual and
customary practices of producers such as Seller and that it has had access to
the Assets, the officers and employees of Seller, and the books, records and
files made available by Seller relating to the Assets, and in making the
decision to enter into this Agreement and consummate the transactions
contemplated hereby, Purchaser has relied solely on the basis of its own
independent due diligence investigation of the Assets and Seller’s
representations and warranties contained in this Agreement.

Section 6.9            SEC
Disclosure.

Purchaser is acquiring the Assets for its own account
for use in its trade or business, and not with a view toward or for sale
associated with any distribution thereof, nor with any present intention of
making a distribution thereof within the meaning of the Securities Act of 1933,
as amended, and applicable state securities laws.

Section 6.10          Bankruptcy.

There are no bankruptcy, reorganization or
receivership proceedings pending against, or, to the knowledge of Purchaser,
being contemplated by, or threatened against Purchaser.

Section 6.11          Qualification.

As of Closing, Purchaser will be qualified to own and
assume operatorship of federal and state oil, gas and mineral leases in all
jurisdictions where the Assets to be transferred to it are located, and the
consummation of the transactions contemplated in this Agreement will not cause
Purchaser to be disqualified as such an owner or operator.  To the extent required by the applicable Law,
as of the Closing, Purchaser will have lease bonds, area-wide bonds or any
other surety bonds as may be required by, and in accordance with, such state or
federal regulations governing the ownership and operation of the Assets.

ARTICLE 7

COVENANTS OF THE PARTIES

Section 7.1            Access.

(a)           From the date of this Agreement until the Closing, Seller
shall cooperate with Purchaser and provide Purchaser and its representatives,
consultants and advisors, reasonable access to the Assets and access to the
Records, but only to the extent that Seller may do so without violating any
obligations to any third party and to the extent that Seller has authority to
grant such access without breaching any restriction legally binding on
Seller.  Purchaser shall conduct all such
inspections and other information gathering described above only (i) (x) during

 26
 

regular business hours and (y) during any
weekends and after hours requested by Purchaser that can be reasonably
accommodated by Seller, and (ii) in a manner which will not unduly interfere
with Seller’s operation of the Assets. 
All information obtained by Purchaser and its representatives pursuant
to this Section 7.1 shall be subject to the terms of that certain
confidentiality agreement dated December 7, 2006 (the “Confidentiality
Agreement”), by and between APC and Purchaser.

(b)           Seller
shall use its commercially reasonable efforts to prepare, at the sole cost and
expense of Purchaser, either (i) if relief is granted by the U.S. Securities
and Exchange Commission, statements of revenues and direct operating expenses
and all notes thereto related to the Assets or (ii) if such relief is not
granted by the U.S. Securities and Exchange Commission, the financial
statements required by the U.S. Securities and Exchange Commission (such
financial statements set forth in the foregoing clauses (i) and (ii), as
applicable, the “Statements of Revenues and Expenses”) in each case of clauses
(i) and (ii), that will be required of Purchaser or any of its Affiliates in
connection with reports, registration statements and other filings to be made
by Purchaser or any of its Affiliates related to the transactions contemplated
by this Agreement with the U.S. Securities and Exchange Commission pursuant to
the Securities Act, or the Exchange Act, in such form that such statements and
the notes thereto can be audited.  Seller
(x) shall cooperate with and permit Purchaser to reasonably participate in the
preparation of the Statements of Revenues and Expenses and (y) shall provide Purchaser
and its representatives with reasonable access to the personnel of Seller and
its Affiliates who engage in the preparation of the Statements of Revenues and
Expenses.

(c)           Promptly
after the date of this Agreement, Seller shall engage KPMG, LLP to perform an
audit of the Statements of Revenues and Expenses and shall use commercially
reasonable efforts to cause KPMG, LLP to issue unqualified opinions with
respect to Statements of Revenues and Expenses (the Statements of Revenues and
Expenses and related audit opinions being hereinafter referred to as the “Audited
Financial Statements”) and provide its written consent for the use of its audit
reports with respect to Statements of Revenues and Expenses in reports filed by
Purchaser or any of its Affiliates under the Exchange Act or the Securities
Act, as needed.  Purchaser shall
reimburse Seller for all fees charged by KPMG, LLP pursuant to such
engagement.  Seller shall take all action
as may be necessary to facilitate the completion of such audit and delivery of
the Audited Financial Statements to Purchaser or any of its Affiliates as soon
as reasonably practicable, but no later than ten (10) days prior to the date
that such Audited Financial Statements would be required to be filed by
Purchaser or any of its Affiliates with a report on Form 8-K or an amendment
thereto under the Exchange Act.  Seller
shall provide to Purchaser a draft of the Audited Financial Statements no later
than fifteen (15) days prior to the date that such Audited Financial Statements
would be required to be filed by Purchaser or any of its Affiliates with a
report on Form 8-K or an amendment thereto under the Exchange Act.  Seller shall keep Purchaser regularly
informed regarding the progress of such audit and also shall periodically
provide Purchaser with copies of drafts of the Audited Financial Statements and
related audit opinions.

Section 7.2            Government
Reviews.

(a)           Other
than with respect to filings, negotiations and applications with respect to the
HSR Act, which are addressed in Section
7.2(b), Seller and Purchaser shall in a timely manner (a) make all
required filings, if any, with and prepare applications to and conduct
negotiations with, each Governmental Body as to which such filings,
applications or negotiations are necessary or appropriate in the consummation
of the transactions contemplated hereby and 

 27
 

(b) provide such information as each may reasonably request to make
such filings, prepare such applications and conduct such negotiations.  Each party shall cooperate with and use all
commercially reasonable efforts to assist the other with respect to such
filings, applications and negotiations.

(b)           As
promptly as practicable, and in any event not more than thirty (30) days
following the date of this Agreement, Seller and Purchaser will file with the
Federal Trade Commission and the Department of Justice, as applicable, the
required notification and report forms and will as promptly as practicable
furnish any supplemental information which may be requested in connection
therewith.  Seller and Purchaser will request
expedited treatment (i.e., early termination) of such filing.  Seller and Purchaser shall use commercially
reasonable efforts to make all other filings and submissions on a prompt and
timely basis in connection with the filings required by this Section 7.2(b) and cooperate with each
other and use all commercially reasonable efforts to assist the other with
respect to such filings, applications and negotiations.  All filing fees incurred in connection with
the filings made pursuant to this Section 7.2
shall be borne fifty (50) percent by Seller and fifty (50) percent by
Purchaser.

Section 7.3            Notification
of Breaches.

Until the Closing,

(a)           Purchaser
shall notify Seller promptly after Purchaser obtains actual knowledge that any
representation or warranty of Seller, as applicable, contained in this
Agreement is untrue in any material respect or will be untrue in any material
respect as of the Closing Date, or that any covenant or agreement to be
performed or observed by Seller prior to or on the Closing Date has not been so
performed or observed in any material respect.

(b)           Seller
shall notify Purchaser promptly after Seller obtains actual knowledge that any
representation or warranty of Purchaser contained in this Agreement is untrue
in any material respect or will be untrue in any material respect as of the
Closing Date, or that any covenant or agreement to be performed or observed by
Purchaser prior to or on the Closing Date has not been so performed or observed
in any material respect.

(c)           If
any of Purchaser’s or Seller’s representations or warranties is untrue or shall
become untrue in any material respect between the date of execution of this
Agreement and the Closing Date, or if any of Purchaser’s or Seller’s covenants
or agreements to be performed or observed prior to or on the Closing Date shall
not have been so performed or observed in any material respect, but if such
breach of representation, warranty, covenant or agreement shall (if curable) be
cured by the Closing, then such breach shall be considered not to have occurred
for all purposes of this Agreement.  No
such notification shall affect the representations or warranties of the parties
or the conditions to their respective obligations hereunder.

(d)           There
shall be no breach of the covenants in this Section as a result of a party’s
failure to report a breach of any representation or warranty or a failure to
perform or observe any covenant or agreement of which it had knowledge if the
party subject to the breach or failure also had knowledge thereof prior to
Closing.

 28
 

Section 7.4            Letters-in-Lieu;
Assignments; Operatorship.

(a)           Seller
will execute on the Closing Date letters in lieu of division and transfer
orders relating to the Assets, on forms prepared by Seller and reasonably
satisfactory to Purchaser, to reflect the transaction contemplated hereby.

(b)           Seller
will prepare and execute, and Purchaser will execute, on the Closing Date, all
assignments necessary to convey to Purchaser all federal and state Leases in
the form as prescribed by the applicable Governmental Body and otherwise
acceptable to Purchaser and Seller.

(c)           Seller
makes no representations or warranties to Purchaser as to transferability or
assignability of operatorship of any Seller Operated Assets.  Rights and obligations associated with
operatorship of such Properties are governed by operating and similar
agreements covering the Properties and will be determined in accordance with
the terms of such agreements. However, Seller will assist Purchaser in
Purchaser’s efforts to succeed Seller as operator of any Wells and Units
included in the Assets.  Purchaser shall,
promptly following Closing, file all appropriate forms and declarations or
bonds with federal and state agencies relative to its assumption of
operatorship.  For all Seller Operated
Assets, Seller shall execute and deliver to Purchaser, and Purchaser shall
promptly file the appropriate forms (including a change of operator card on the
form established by the Department of Conservation, duly executed by Seller and
naming Purchaser as the successor operator) with the applicable regulatory
agency transferring operatorship of such Assets to Purchaser.

Section 7.5            Public
Announcements.

Until the Closing, neither Seller nor Purchaser shall
make any press release or other public announcement regarding the existence of
this Agreement, the contents hereof or the transactions contemplated hereby
without the prior written consent of the others; provided, however, the
foregoing shall not restrict disclosures by Purchaser or Seller which are
required by applicable securities or other laws or regulations or the
applicable rules of any stock exchange having jurisdiction over the disclosing
party or its Affiliates; and provided, further, that, Purchaser may disclose
the existence and contents of this Agreement, the transactions contemplated
hereby and information regarding the Assets to the Standard & Poor’s and
Moody’s rating agencies and any actual or potential lenders or other financing
sources of Purchaser.  At or after
Closing, the content of any press release or public announcement first
announcing the consummation of this transaction shall be subject to the prior
review and reasonable approval of Seller and Purchaser; provided, however, the
foregoing shall not restrict disclosures by Purchaser or Seller which are
required by applicable securities or other laws or regulations or the
applicable rules of any stock exchange having jurisdiction over the disclosing
party or its Affiliates.

Section 7.6            Operation
of Business.

Except as set forth on Schedule 7.6,
until the Closing, Seller (i) will operate the Assets and the business thereof
in the ordinary course, (ii) will not, without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld, commit to any
operation, or series of related operations thereon, reasonably anticipated to
require future capital expenditures by Purchaser as owner of the Assets in
excess of $150,000, or make any capital expenditures in respect of the Assets
in excess of $150,000, or terminate, materially amend, execute or extend any
material Contracts affecting the Assets, (iii) will maintain insurance coverage
on the Assets presently furnished by nonaffiliated third parties in the amounts
and of the types presently in force, (iv) will use commercially reasonable
efforts to maintain in full force 

 29
 

and effect all Leases,
(v) will maintain all material governmental permits and approvals affecting the
Assets, (vi) will not transfer, farmout, sell, hypothecate, encumber or
otherwise dispose of any Assets, except for (A) sales and dispositions of
Hydrocarbon production in the ordinary course of business consistent with past
practices or (B) transfers, farmouts, hypothecations, encumbrances or other
dispositions of Assets, in one or more transactions, not exceeding $500,000 of
consideration (in any form), in the aggregate, (vii) will not enter into any
settlement or agreement with respect to Taxes, or make or change any election
with respect to Taxes, relating to the Assets and (viii) will not commit to do
any of the foregoing. Purchaser’s approval of any action restricted by this Section 7.6 shall be considered granted within ten (10) days
(unless a shorter time is reasonably required by the circumstances and such
shorter time is specified in Seller’s written notice) of Seller’s written
notice to Purchaser requesting such consent unless Purchaser notifies Seller to
the contrary in writing during that period. In the event of an emergency,
Seller may take such action as a prudent operator would take and shall notify
Purchaser of such action promptly thereafter.

Purchaser acknowledges that Seller may own an
undivided interest in certain of the Assets, and Purchaser agrees that the acts
or omissions of the other working interest owners who are not affiliated with
Seller shall not constitute a violation of the provisions of this Section 7.6 nor shall any action required by a vote of
working interest owners constitute such a violation so long as Seller has voted
its interest in a manner consistent with the provisions of this Section 7.6.

Section 7.7            Preference
Rights and Transfer Requirements.

(a)           The
transactions contemplated by this Agreement are expressly subject to all
validly existing and applicable Preference Rights and Transfer
Requirements.  Prior to the Closing Date,
Seller shall initiate all procedures which are reasonably required to comply
with or obtain the waiver of all Preference Rights and Transfer Requirements
set forth in Schedule 5.13 with
respect to the transactions contemplated by this Agreement.  Seller shall use its commercially reasonable
efforts to obtain all applicable consents and to obtain waivers of applicable
Preference Rights; provided, however, Seller shall not be obligated to pay any
consideration to (or incur any cost or expense for the benefit of) the holder
of any Preference Right or Transfer Requirement in order to obtain the waiver
thereof or compliance therewith.

(b)           If
the holder of a Preference Right elects prior to Closing to purchase the Asset
subject to a Preference Right (a “Preference Property”) in accordance with the
terms of such Preference Right, and Seller receives written notice of such
election prior to the Closing, such Preference Property will be eliminated from
the Assets and the Purchase Price shall be reduced by the Allocated Value of
the Preference Property.

(c)           If

(i)                                     a
third party brings any suit, action or other proceeding prior to the Closing
seeking to restrain, enjoin or otherwise prohibit the consummation of the
transactions contemplated hereby in connection with a claim to enforce a
Preference Right;

(ii)                                  an
Asset is subject to a Transfer Requirement that provides that transfer of such
Asset without compliance with such Transfer Requirement will result in
termination or other material impairment of any rights in relation 

 30
 

to such Asset,
and such Transfer Requirement is not waived, complied with or otherwise
satisfied prior to the Closing Date; or

(iii)                               the
holder of a Preference Right does not elect to purchase such Preference
Property or waive such Preference Right with respect to the transactions
contemplated by this Agreement prior to the Closing Date and the time in which
the Preference Right may be exercised has not expired,

then, unless otherwise agreed by Seller and Purchaser,
the Asset or portion thereof affected by such Preference Right or Transfer
Requirement (a “Retained Asset”) shall be held back from the Assets to be
transferred and conveyed to Purchaser at Closing and the Purchase Price to be
paid at Closing shall be reduced by the Allocated Value of such Retained Asset
pursuant to Section 7.7(b). Any Retained Asset
so held back at the initial Closing will be conveyed to Purchaser at a delayed
Closing (which shall become the new Closing Date with respect to such Retained
Asset), within ten (10) days following the date on which the suit, action or
other proceeding, if any, referenced in clause (i) above is settled or a
judgment is rendered (and no longer subject to appeal) permitting transfer of
the Retained Asset to Purchaser pursuant to this Agreement and Seller obtains,
complies with, obtains a waiver of or notice of election not to exercise or
otherwise satisfies all remaining Preference Rights and Transfer Requirements
with respect to such Retained Asset as contemplated by this Section (or if
multiple Assets are Retained Assets, on a date mutually agreed to by the
parties in order to consolidate, to the extent reasonably possible, the number
of Closings).  At the delayed Closing,
Purchaser shall pay Seller a purchase price equal to the amount by which the
Purchase Price was reduced on account of the holding back of such Retained
Asset (as adjusted pursuant to Section 2.2
through the new Closing Date therefor); provided, however, if all such
Preference Rights and Transfer Requirements with respect to any Retained Asset
so held back at the initial Closing are not obtained, complied with, waived or
otherwise satisfied as contemplated by this Section within one hundred eighty
(180) days after the initial Closing has occurred with respect to any Asset,
then such Retained Asset shall be eliminated from the Assets and shall become
an Excluded Asset and this Agreement, unless Seller and Purchaser agree to
proceed with a closing on such Retained Asset, in which case Purchaser and
Purchaser shall be deemed to have waived any objection (and shall be obligated
to indemnify the Seller Indemnified Persons for all Losses) with respect to
non-compliance with such Preference Rights and Transfer Requirements with
respect to such Retained 

Asset(s).

(d)           Purchaser
acknowledges that Seller desires to sell all of the Assets to Purchaser and
would not have entered into this Agreement but for Purchaser’s agreement to
purchase all of the Assets as herein provided. 
Accordingly, it is expressly understood and agreed that Seller does not
desire to sell any Property affected by a Preference Right to Purchaser unless
the sale of all of the Assets is consummated by the Closing Date in accordance
with the terms of this Agreement.  In
furtherance of the foregoing, Seller’s obligation hereunder to sell the
Preference Properties to Purchaser is expressly conditioned upon the
consummation by the Closing Date of the sale of all of the Assets (other than
Retained Assets or other Assets excluded pursuant to the express provisions of
this Agreement) in accordance with the terms of this Agreement, either by
conveyance to Purchaser or conveyance pursuant to an applicable Preference
Right; provided that, nothing herein is intended or shall operate to extend or
apply any Preference Right to any portion of the Assets which is not otherwise
burdened thereby.  Time is of the essence
with respect to the parties’ agreement to consummate the sale of the Assets by
the Closing Date (or by the delayed Closing Date pursuant to Section 7.7(c)).

 

 31

Section 7.8            Tax
Matters.

(a)           Subject to the provisions of Section 12.3, Seller shall be responsible for all Taxes
related to the Assets (other than ad valorem, property, severance, Hydrocarbon
production and similar Taxes based upon or measured by the ownership or
operation of the Assets or the production of Hydrocarbons therefrom, which are
addressed in Section 1.4)
attributable to any period of time at or prior to the Closing Date, and
Purchaser shall be responsible for all such Taxes related to the Assets
attributable to any period of time after the Closing Date.  Notwithstanding the foregoing, Seller shall
handle payment to the appropriate Governmental Body of all Taxes with respect
to the Assets which are required to be paid prior to Closing (and shall file
all Tax Returns with respect to such Taxes). 
If requested by Purchaser, Seller will assist Purchaser with preparation
of all ad valorem and property Tax Returns for periods ending on or before the
Closing Date (including any extensions requested).  Seller shall deliver to Purchaser within
thirty (30) days of filing copies of all Tax Returns to be filed by Seller
relating to the Assets and any supporting documentation to be provided by
Seller to Governmental Bodies for Purchaser’s approval, which shall not be
unreasonably withheld, excluding Tax Returns related to income tax, franchise
tax, or other similar Taxes.  Purchaser
shall file all Tax Returns covering Taxes treated as Property Costs that are
required to be filed after the Closing Date unless covered above.  With respect to such Tax Returns covering a
taxable period which includes the Effective Date, Purchaser shall provide a
copy of such Tax Return to Seller within 30 days of filing for Seller’s
approval, which shall not be unreasonably withheld.

(b)           Purchaser and Seller shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the filing
of any Tax Returns and any audit, litigation or other Proceeding with respect
to Taxes.  Such cooperation shall include
the retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or
other Proceeding and making employees available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder.  Each of Purchaser and Seller
agrees (i) to retain all books and records with respect to Tax matters
pertinent to the acquired assets relating to any taxable period beginning
before the Closing Date until the expiration of the statute of limitations
(and, to the extent notified by Purchaser or Seller, any extensions thereof) of
the respective taxable periods, and to abide by all record retention agreements
entered into with any Governmental Body, and (ii) to give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if the other party so requests, each party shall
allow the other party the option of taking possession of such books and records
prior to their disposal.  Purchaser and
Seller further agree, upon request, to use their commercially reasonable
efforts to obtain any certificate or other document from any Governmental Body
or any other Person as may be necessary to mitigate, reduce or eliminate any
Tax that could be imposed with respect to the transactions contemplated.

(c)           Purchaser and Seller shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection of accommodating
a 1031 exchange (as provided for under IRC Section 1031 of the Code).  Purchaser or Seller reserves the right, at or
prior to Closing, to assign its rights under this Agreement with respect to all
or a portion of the Purchase Price, and that portion of the Assets associated
therewith (“1031 Assets”), to a Qualified Intermediary (“QI”) (as that term is
defined in Section 1.1031(k)-1(g)(4)(v) of the Treasury Regulations) to
accomplish this transaction, in whole or in part, in a manner that will comply
with the requirements of a like-kind exchange (“Like-Kind Exchange”) pursuant
to Section 1031 of the Code.  If
Purchaser so elects, Purchaser may assign its rights under this Agreement to
the 

 32
 

1031 Assets to the QI. 
Seller hereby (i) consents to Purchaser’s assignment of its rights in
this Agreement with respect to the 1031 Assets, and (ii) if such an assignment
is made, agrees to transfer all or a portion of the Assets into the qualified
trust account at Closing as directed in writing by Purchaser.  Purchaser acknowledges and agrees that a
whole or partial assignment of this Agreement to a QI shall not release
Purchaser from any of its respective liabilities and obligations to Seller or
expand any liabilities or obligations of Seller under this Agreement.  Neither party represents to the other that
any particular tax treatment will be given to either party as a result of the
Like-Kind Exchange.  Seller shall not be
obligated to pay any additional costs or incur any additional obligations in
its sale of the Assets if such costs are the result of Purchaser’s Like-Kind
Exchange, and Purchaser shall hold harmless and indemnify Seller from and
against all claims, losses and liabilities (including reasonable attorneys’
fees, court costs and related expenses), if any, resulting from such a
Like-Kind Exchange.

Section 7.9            Further
Assurances.

After Closing, Seller and Purchaser each agrees to
take such further actions and to execute, acknowledge and deliver all such
further documents as are reasonably requested by the other party for carrying
out the purposes of this Agreement or of any document delivered pursuant to
this Agreement.

Section 7.10          Reserved.

Section 7.11          Insurance;
Financial Information.

(a)           Effective as of the Closing Date, Purchaser shall cause
the following insurance to be carried and maintained with respect to the
Assets: (i) general liability insurance with combined single limits per
occurrence of not less than $1,000,000.00 for bodily injury and property
damage, including property damage by blowout and cratering, completed
operations, and contractual liability as respects any contract into which
Purchaser may enter under the terms of this Agreement; and (ii) operators extra
expense insurance with limits of not less than $1,000,000.00 per occurrence,
covering the costs of controlling a blowout, and certain other related and/or
resulting costs and seepage and pollution liability.

(b)           Between the date of this Agreement and the Closing Date,
Seller shall deliver to the Chief Operating Officer of Purchaser copies of all production
reports and daily drilling reports relating to Seller’s operation of the Assets
promptly after the preparation thereof in the ordinary course of business.

Section 7.12          No
Solicitation of Transactions.

So long as Purchaser is not in default of this
Agreement or, if Purchaser is in default hereunder, Purchaser cures such
default within ten (10) days after receiving written notice thereof from
Seller, Seller shall not, directly or indirectly, through any officer,
director, stockholder, employee, agent, financial advisor, banker or other
representative or Affiliate, or otherwise, solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to any acquisition
or purchase of all or any material portion of the Assets or participate in any
negotiations regarding, or furnish to any other Person any information with
respect to, or otherwise cooperate in any way with, or assist or participate
in, facilitate, or encourage, any effort or attempt by any other Person to do
or seek any of the foregoing.  Seller
shall communicate as soon as reasonably practicable to Purchaser the material
terms of any such proposal (and the identity of the party making such proposal)
which it may receive and, if such 

 33
 

proposal is in writing, Seller shall promptly deliver
a copy of such proposal to Purchaser. 
Seller agrees not to release any third party from, or waive any
provision of, any confidentiality agreement relating to the Assets to which
Seller or any of its Affiliates is a party. 
Seller immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing.

Section 7.13          Transition
Services Agreement.

Between the date hereof and the Closing Date, each of
Seller and Purchaser shall use its reasonable efforts to negotiate in good
faith a form of transition services agreement on terms that are mutually
acceptable to Seller and Purchaser to be executed at Closing by Seller and
Purchaser (the “Transition Services Agreement”).

Section 7.14          Employees.

As promptly as reasonably practical following the
execution of this Agreement, the parties will use reasonable efforts to work
together concerning employees.

Section 7.15          Hedges.

(a)           Seller has entered into the hedging transactions set forth
on Schedule 7.15
(the “Hedging Transactions”) with the counterparties specified therein (the “Counterparties”).  Purchaser covenants and agrees that each of
the Counterparties has agreed and will (i) allow the assignment by Seller to
Purchaser at the Closing of all of the trades that are the subject of the
Hedging Transactions and (ii) release Seller from any and all obligations and
liabilities related or attributable to such Hedging Transactions upon such
assignment.  The respective agreements
between Seller and each Counterparty shall be evidenced by a Novation Agreement
that is in form and substance reasonably acceptable to Seller.

(b)           At the Closing, Purchaser shall accept an assignment from
Seller of all of the trades that are the subject of the Hedging Transactions
and shall assume all obligations and liabilities attributable thereto pursuant
to documentation required by the Counterparties.

(c)           Within five (5) Business Days of the termination by
Purchaser or Seller, as the case may be, of this Agreement in accordance with Section 10.1, Seller shall furnish to
Purchaser written notice of whether it elects to unwind the Hedging
Transactions.  If Seller notifies
Purchaser that it does not elect to unwind the Hedging Transactions, Purchaser
shall have no further obligations whatsoever to Seller with respect to the
Hedging Transactions.  However, if Seller
notifies Purchaser that it elects to unwind the Hedging Transactions, Purchaser
shall be obligated for and shall promptly pay, and Purchaser does hereby agree
to indemnify and hold harmless Seller from and against, any and all Losses
suffered by Seller resulting from or attributable to the Hedging Transactions
and the unwind thereof unless the termination of this Agreement resulted from
the default by Seller of its obligations under this Agreement, in which case
Purchaser shall not be liable for such Losses.

Section
7.16          Contribution of Oklahoma
Assets.

Purchaser
has requested that Seller, at least ten (10) Business Days prior to Closing,
(a) form a Delaware limited liability company and (b) contribute or otherwise
transfer all of the Properties and other related Assets located in Oklahoma to
such limited liability company prior to Closing.  Although Purchaser acknowledges that Seller
is under no obligation to 

 34
 

accommodate Purchaser’s request, Seller agrees to
analyze such request and to notify Purchaser within ten (10) Business Days
after the date hereof as to whether Seller agrees to accommodate such
request.  In the event Seller elects to
accommodate Purchaser’s request, Seller shall convey all membership interests
of such Delaware limited liability company to Purchaser as part of the Assets
at Closing.  Purchaser further
acknowledges that if Seller elects not to accommodate Purchaser’s request,
Purchaser shall nonetheless be obligated to consummate the transactions
contemplated under this Agreement in accordance with the terms hereof.

Section
7.17          [RESERVED].

Section
7.18          Cure of
Misrepresentations.

If any of the representations and warranties contained
in Article 5 hereof are determined
(whether by notice from Purchaser or otherwise) to have been untrue or
incorrect as of the date of this Agreement, then any cure by Seller of same
shall be at its own expense.

Section
7.19          NAGS.

Anadarko Gathering Company shall have the right to
convey NAGS to any Permitted NAGS Buyer without the prior consent of Purchaser,
but not to any other Person without obtaining the prior written consent of
Purchaser, which consent shall not be unreasonably withheld.  As a condition to such conveyance, the
Permitted NAGS Buyer shall acquire NAGS subject to the terms of the NAGS
Agreement.

ARTICLE 8

CONDITIONS TO CLOSING

Section 8.1            Conditions
of Seller to Closing.

The obligations of Seller to consummate the
transactions contemplated by this Agreement are subject, at the option of
Seller, to the satisfaction or waiver by Seller on or prior to Closing of each
of the following conditions:

(a)           Representations. Each of the representations and
warranties of Purchaser contained in this Agreement shall be true and correct
in all material respects (other than those representations and warranties of
Purchaser that are qualified by materiality, which shall be true and correct in
all respects) as of the Closing Date as though made on and as of the Closing
Date, except to the extent that any such representation or warranty is made as
of a specified date, in which case such representation or warranty shall have
been true and correct in all material respects (other than those
representations and warranties of Purchaser that are qualified by materiality,
which shall be true and correct in all respects) as of such specified date;

(b)           Performance. 
Purchaser shall have performed and observed, in all material respects,
all covenants and agreements to be performed or observed by it under this
Agreement prior to or on the Closing Date;

(c)           Proceedings. 
No Proceeding by a third party (including any Governmental Body) seeking
to restrain, enjoin or otherwise prohibit the consummation of the transactions
contemplated by this Agreement shall be pending before any Governmental Body
and no order, 

 35
 

writ, injunction or decree shall have been entered and
be in effect by any court or any Governmental Body of competent jurisdiction,
and no statute, rule, regulation or other requirement shall have been
promulgated or enacted and be in effect, that on a temporary or permanent basis
restrains, enjoins or invalidates the transactions contemplated hereby; provided, however, the Closing shall proceed notwithstanding
any Proceedings seeking to restrain, enjoin or otherwise prohibit consummation
of the transactions contemplated hereby brought by holders of Preference Rights
seeking to enforce such rights with respect to the Assets with aggregate Allocated
Values of less than ten percent (10%) of the total unadjusted Purchase Price,
and the Assets subject to such Proceedings shall be treated in accordance with Section 7.7;

(d)           Deliveries. 
Purchaser shall have delivered (or be ready, willing and able to
immediately deliver) to Seller duly executed counterparts of the Conveyance and
all other documents and certificates to be delivered by Purchaser under Section 9.3 and shall have performed (or be
ready, willing and able to immediately perform) the other obligations required
to be performed by it under Section 9.3;

(e)           Title Defects. 
The sum of all asserted but uncured Title Defect Amounts for Title
Defects determined under Section 3.4(g)
prior to Closing, less the sum of all Title Benefit Amounts for Title Benefits
determined under Section 3.4(h)
prior to the Closing, plus Environmental Defects Amounts attributable to
Environmental Defects and plus Losses from casualties to and takings of the
Assets, determined or asserted in accordance with this Agreement, shall be less
than ten percent (10%) of the total unadjusted Purchase Price; and

(f)            HSR Act. 
Any waiting period applicable to the consummation of the transaction
contemplated by this Agreement under the HSR Act shall have lapsed or
terminated (by early termination or otherwise).

Section 8.2            Conditions
of Purchaser to Closing.

The obligations of Purchaser to consummate the
transactions contemplated by this Agreement are subject, at the option of
Purchaser, to the satisfaction or waiver by Purchaser on or prior to Closing of
each of the following conditions:

(a)           Representations. Each of the representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects (other than those representations and warranties of
Seller that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the Closing Date as though
made on and as of the Closing Date, except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct in all material
respects (other than those representations and warranties of Seller that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of such specified date;

(b)           Performance. Seller shall have performed and
observed, in all material respects, all covenants and agreements to be
performed or observed by it under this Agreement prior to or on the Closing
Date;

(c)           Proceedings. 
No Proceeding by a third party (including any Governmental Body) seeking
to restrain, enjoin or otherwise prohibit the consummation of the transactions
contemplated by this Agreement shall be pending before any Governmental Body
and no order, 

 36
 

writ, injunction or decree shall have been entered and
be in effect by any court or any Governmental Body of competent jurisdiction,
and no statute, rule, regulation or other requirement shall have been
promulgated or enacted and be in effect, that on a temporary or permanent basis
restrains, enjoins or invalidates the transactions contemplated hereby; provided, however, the Closing shall proceed notwithstanding
any Proceedings seeking to restrain, enjoin or otherwise prohibit consummation
of the transactions contemplated hereby brought by holders of Preference Rights
seeking to enforce such rights with respect to the Assets with aggregate
Allocated Values of less than ten percent (10%) of the total unadjusted
Purchase Price, and the Assets subject to such Proceedings shall be treated in
accordance with Section 7.7;

(d)           Deliveries. 
Seller shall have delivered (or be ready, willing and able to
immediately deliver) to Purchaser duly executed counterparts of the Conveyance
and all other documents and certificates to be delivered by Seller under Section 9.2;

(e)           Title Defects. 
The sum of all asserted but uncured Title Defect Amounts for Title
Defects determined under Section 3.4(g)
prior to the Closing, less the sum of all Title Benefit Amounts for Title
Benefits determined under Section 3.4(h)
prior to the Closing, plus Environmental Defects Amounts attributable to
Environmental Defects and plus Losses from casualties to and takings of the
Assets, determined or asserted in accordance with this Agreement, shall be less
than ten percent (10%) of the unadjusted Purchase Price;

(f)            HSR Act. 
Any waiting period applicable to the consummation of the transaction
contemplated by this Agreement under the HSR Act shall have lapsed or terminated
(by early termination or otherwise); and

(g)           Required Transfer Requirements.  The sum of all Allocated Values for all
Retained Assets resulting from Transfer Requirements that have not been
obtained or waived prior to Closing shall not exceed $17,200,000.

ARTICLE 9

CLOSING

Section 9.1            Time
and Place of Closing.

(a)           Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Article 10, and subject to the satisfaction
or waiver of the conditions set forth in Article
8 (other than conditions the fulfillment of which by their nature is
to occur at the completion of the transactions contemplated by this Agreement
(the “Closing”)), the Closing shall take place at 10:00 a.m., local time, on
May 2, 2007, at the offices of Fulbright & Jaworski L.L.P.,
Houston, Texas, unless another date, time or place is mutually agreed to in
writing by Purchaser and Seller.  If any
of the conditions (other than conditions the fulfillment of which by their
nature is to occur at the Closing) set forth in Article 8 are not satisfied or waived at the time the Closing
is to occur pursuant to the foregoing sentence of this Section 9.1(a), then the Closing shall
occur on a date thereafter that is the third Business Day after the
satisfaction or waiver of all such conditions.

(b)           The date on which the Closing occurs is herein referred to
as the “Closing Date.”

 37
 

Section 9.2            Obligations
of Seller at Closing.

At the Closing, upon the terms and subject to the
conditions of this Agreement, Seller shall deliver or cause to be delivered to
Purchaser, or perform or cause to be performed, the following:

(a)           the Conveyance in sufficient duplicate originals to allow
recording in all appropriate jurisdictions and offices, duly executed by
Seller;

(b)           letters-in-lieu of transfer orders covering the Assets,
duly executed by Seller;

(c)           a certificate duly executed by an authorized corporate
officer of Seller, dated as of Closing, certifying on behalf of Seller that the
conditions set forth in Section 8.2(a) and
Section 8.2(b) have been
fulfilled;

(d)           a legal opinion of APC’s Associate General Counsel, dated
as of the Closing, regarding the due authorization, execution, delivery and
performance by Seller of this Agreement and the transactions contemplated
hereby, in form and substance reasonably satisfactory to Purchaser;

(e)           the Transition Services Agreement, duly executed by
Seller; and

(f)            the Seismic License, duly executed by Seller.

Section 9.3            Obligations
of Purchaser at Closing.

At the Closing, upon the terms and subject to the
conditions of this Agreement, Purchaser shall deliver or cause to be delivered
to Seller, or perform or caused to be performed, the following:

(a)           a wire transfer of the Closing Payment, in same-day funds;

(b)           the Conveyance, duly executed by Purchaser;

(c)           letters-in-lieu of transfer orders covering the Assets,
duly executed by Purchaser;

(d)           a certificate by an authorized corporate officer of
Purchaser, dated as of Closing, certifying on behalf of Purchaser that the
conditions set forth in Section 8.1(a)
and Section 8.1(b) have been
fulfilled;

(e)           a legal opinion of counsel to Purchaser, dated as of the
Closing, regarding the due authorization, execution, delivery and performance
by Purchaser of this Agreement and the transactions contemplated hereby, in
form and substance reasonably satisfactory to Seller;

(f)            the Transition Services Agreement, duly executed by
Purchaser; and

(g)           the Seismic License, duly executed by Purchaser.

Section 9.4            Closing
Adjustments.

(a)           Not later than three (3) Business Days prior to the
Closing Date, Seller shall prepare and deliver to Purchaser, based upon the
best information available to Seller, a preliminary settlement statement
estimating the Adjusted Purchase Price after giving effect to all adjustments
listed in Section 2.2.  The estimate delivered in accordance with
this Section 

 38
 

9.4(a) shall constitute the
dollar amount to be paid by Purchaser to Seller at the Closing (the “Closing
Payment”). Until one (1) Business Day before the Closing Date, Purchaser shall
have the opportunity to review and discuss the preliminary settlement statement
with Seller; provided, however, Seller shall not be required to make any change
thereto to which Seller does not agree.

(b)           As soon as reasonably practicable after the Closing but
not later than ninety (90) days following the Closing Date, Seller shall
prepare and deliver to Purchaser a statement setting forth the final
calculation of the Agreed Purchase Price and showing the calculation of each
adjustment, based, to the extent possible, on actual credits, charges, receipts
and other items before and after the Effective Time and taking into account all
adjustments provided for in this Agreement (the “Final Purchase Price”). Seller
shall, at Purchaser’s request, supply reasonable documentation available to
support any credit, charge, receipt or other item.  Seller shall afford Purchaser and its
representatives the opportunity to review such statement and the supporting
schedules, analyses, workpapers, and other underlying records or documentation
as are reasonably necessary and appropriate in Purchaser’s review of such
statement.  Each party shall cooperate
fully and promptly with the other and their respective representatives in such
examination with respect to all reasonable requests related thereto.  As soon as reasonably practicable but not
later than the 30th day following receipt of Seller’s statement hereunder,
Purchaser shall deliver to Seller a written report containing any changes that
Purchaser proposes be made to such statement. Seller and Purchaser shall
undertake to agree on the final statement of the Final Purchase Price no later
than one hundred eighty (180) days after the Closing Date (the “Final
Settlement Date”).  In the event that Seller
and Purchaser cannot reach agreement by the Final Settlement Date, either party
may refer the remaining matters in dispute to Ernst & Young LLP, or such
other nationally-recognized independent accounting firm as may be mutually
accepted by Purchaser and Seller, for review and final determination (the “Agreed
Accounting Firm”).  If issues are
submitted to the Agreed Accounting Firm for resolution, Seller and Purchaser
shall each enter into a customary engagement letter with the Agreed Accounting
Firm at the time the issues remaining in dispute are submitted to the Agreed
Accounting Firm.  The Agreed Accounting
Firm will be directed to (i) review the statement setting forth Seller’s
calculation of the Final Purchase Price and the records relating thereto only
with respect to items identified by Purchaser in its written report containing
changes to such statement that remain disputed immediately following the Final
Settlement Date and (ii) determine the final adjustments.  Each party shall furnish the Agreed
Accounting Firm such work papers and other records and information relating to
the objections in dispute as the Agreed Accounting Firm may reasonably request
and that are available to such party or its Affiliates (and such parties’
independent public accountants).  The
parties will, and will cause their representatives to, cooperate and assist in
the conduct of any review by the Agreed Accounting Firm, including, but not
limited to, making available books, records and, as available, personnel as
reasonably required.  The Agreed
Accounting Firm shall conduct the arbitration proceedings in Houston, Texas in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, to the extent such rules do not conflict with the terms of this Section 9.4.  The Agreed Accounting Firm’s determination
shall be made within thirty (30) days after submission of the matters in
dispute and shall be final and binding on both parties, without right of appeal
and such decision shall constitute an arbitral award upon which a judgment may
be entered by a court having jurisdiction thereof.  In determining the proper amount of any
adjustment to the Final Purchase Price, the Agreed Accounting Firm shall not
increase the Final Purchase Price more than the increase proposed by Seller nor
decrease the Final Asset Value more than the decrease proposed by Purchaser, as
applicable, and may not award damages or penalties to either party with respect
to any matter. Seller and Purchaser shall each bear its own legal fees and
other costs of presenting its case. Each party shall bear one-half of the costs
and expenses 

 39
 

of the accounting firm. Within ten (10) Business Days
after the date on which the parties or the Agreed Accounting Firm, as
applicable, finally determines the disputed matters, (x) Purchaser shall pay to
Seller the amount by which the Final Purchase Price exceeds the Closing Payment
or (y) Seller shall pay to Purchaser the amount by which the Closing Payment
exceeds the Final Purchase Price, as applicable. Any post-Closing payment
pursuant to this Section 9.4(b) shall bear interest
at the Agreed Interest Rate from (but not including) the Closing Date to (and
including) the date both Purchaser and Seller have executed the final
settlement statement.

(c)           All payments made or to be made hereunder to Seller shall
be by electronic transfer of immediately available funds to the account of
Anadarko Petroleum Corporation, Account No. 5762707 at JPMorgan Chase, Chicago,
IL, ABA No. 021000021, for the credit of Seller or to such other bank and
account as may be specified by Seller in writing. All payments made or to be
made hereunder to Purchaser shall be by electronic transfer of immediately
available funds to a bank and account specified by Purchaser in writing to Seller.

ARTICLE 10

TERMINATION

Section 10.1          Termination.

This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:

(a)           by mutual written consent of Seller and Purchaser;

(b)           by either Seller or Purchaser, if:

(i)                                     the Closing shall
not have occurred on or before June 1, 2007 (the “Termination Date”); provided,
however, that the right to terminate this Agreement under this Section 10.1(b)(i) shall not be available
(A) to Seller, if any breach of this Agreement by Seller has been the principal
cause of, or resulted in, the failure of the Closing to occur on or before the
Termination Date or (B) to Purchaser, if any breach of this Agreement by
Purchaser has been the principal cause of, or resulted in, the failure of the
Closing to occur on or before the Termination Date; or

(ii)                                  there shall be any
Law that makes consummation of the transactions contemplated hereby illegal or
otherwise prohibited or a Governmental Body shall have issued an order, decree,
or ruling or taken any other action permanently restraining, enjoining, or
otherwise prohibiting the consummation of the transactions contemplated hereby,
and such order, decree, ruling, or other action shall have become final and non
appealable;

(c)           by Seller, if (i) any of the representations and
warranties of Purchaser contained in this Agreement shall not be true and
correct in all material respects (provided that any such representation or
warranty that is already qualified by a materiality standard or a material
adverse effect qualification shall not be further qualified); or (ii) Purchaser
shall have failed to fulfill in any material respect any of its obligations
under this Agreement; and, in the case of each of clauses (i) and (ii), such
misrepresentation, or breach of warranty, if curable, has not been cured within
ten (10) days after written notice thereof from Seller to Purchaser; provided 

 40
 

that any cure period shall not extend beyond the
Termination Date and shall not extend the Termination Date; or

(d)           by Purchaser, if (i) any of the representations and
warranties of Seller contained in this Agreement shall not be true and correct
in all material respects (provided that any such representation or warranty
that is already qualified by a materiality or Material Adverse Effect
qualification shall not be further qualified); or (ii) Seller shall have failed
to fulfill in any material respect any of its obligations under this Agreement,
and, in the case of each of clauses (i) and (ii), such misrepresentation,
breach of warranty or failure, if curable, has not been cured within ten (10)
days after written notice thereof from Purchaser to Seller; provided that any
cure period shall not extend beyond the Termination Date and shall not extend
the Termination Date.

Section 10.2          Effect
of Termination.

If this Agreement is terminated pursuant to Section 10.1, this Agreement shall become void and of no
further force or effect (except for the provisions of Section 4.4,
Section 5.6, Section 6.5, Section 7.5, Section 7.15, Section 11.10, Section 11.11 and Section
11.12 of this Agreement and this Article 10,
the Section entitled “Definitions,” and Article 12
(other than Section 12.6), all of which shall
continue in full force and effect). 
Notwithstanding the foregoing, nothing contained in this Section 10.2 shall relieve any party from liability for
Losses resulting from its breach of this Agreement.

Section 10.3          Distribution
of Deposit Upon Termination.

(a)           If Seller terminates this Agreement (i) because Purchaser
has failed to comply with any provision of
Sections 8.1(a), 8.1(b) or 8.1(d);  or
(ii) as the result of any default or breach by Purchaser of Purchaser’s
obligations hereunder, then Seller may retain the Deposit, as its sole and
exclusive remedy as liquidated damages, free of any claims by Purchaser or any
other Person with respect thereto.  It is
expressly stipulated by the parties that the actual amount of damages resulting
from such a termination would be difficult if not impossible to determine
accurately because of the unique nature of this Agreement, the unique nature of
the Assets, the uncertainties of applicable commodity markets and differences
of opinion with respect to such matters, and that the liquidated damages
provided for herein are a reasonable estimate by the parties of such damages.

(b)           If this Agreement is terminated for any reason other than
the reasons set forth in Section 10.3(a),  then Seller shall deliver the Deposit to
Purchaser without interest thereon, free of any claims by Seller or any other
Person with respect thereto after Purchaser has satisfied its obligations under Section 7.15.

(c)           Notwithstanding anything to the contrary in this
Agreement, Purchaser shall not be entitled to receive interest on the Deposit,
whether the Deposit is applied against the Purchase Price or returned to
Purchaser pursuant to this Section 10.3.

 41
 

ARTICLE 11

POST-CLOSING OBLIGATIONS; INDEMNIFICATION;

LIMITATIONS; DISCLAIMERS AND WAIVERS

Section 11.1          Receipts.

Except as otherwise provided in this Agreement, any
Hydrocarbons produced from or attributable to the Assets (and all products and
proceeds attributable thereto) and any other income, proceeds, receipts and
credits attributable to the Assets which are not reflected in the adjustments
to the Purchase Price following the final adjustment pursuant to Section 9.4(b) shall be treated as follows: (a) all
Hydrocarbons produced from or attributable to the Assets (and all products and
proceeds attributable thereto) and all other income, proceeds, receipts and
credits earned with respect to the Assets to which Purchaser is entitled under Section 1.4 shall be the sole property and entitlement of
Purchaser, and, to the extent received by Seller, Seller shall fully disclose,
account for and remit the same promptly to Purchaser, and (b) all Hydrocarbons
produced from or attributable to the Assets (and all products and proceeds
attributable thereto) and all other income, proceeds, receipts and credits
earned with respect to the Assets to which Seller is entitled under Section 1.4 shall be the sole property and entitlement of
Seller and, to the extent received by Purchaser, Purchaser shall fully
disclose, account for and remit  the same
promptly to Seller.

Section 11.2          Expenses.

Except for Royalty Amounts and except as otherwise
provided in this Agreement, any Property Costs which are not reflected in the
adjustments to the Purchase Price following the final adjustment pursuant to Section 9.4(b) shall be treated as follows: (a) all Property
Costs for which Seller is responsible under Section 1.4
shall be the sole obligation of Seller and Seller shall promptly pay, or if
paid by Purchaser, promptly reimburse Purchaser for and hold Purchaser harmless
from and against same; and (b) all Property Costs for which Purchaser is responsible
under Section 1.4 shall be the sole
obligation of Purchaser, and Purchaser shall promptly pay, or if paid by
Seller, promptly reimburse Seller for and hold Seller harmless from and against
same. Seller is entitled to resolve all joint interest audits and other audits
of Property Costs covering periods for which Seller is wholly responsible and
Purchaser is entitled to resolve all joint interest audits and other audits of
Property Costs covering periods for which Purchaser is in whole or in part responsible;
provided that Purchaser shall not agree to any adjustments to previously
assessed costs for which Seller is liable without the prior written consent of
Seller, such consent not to be unreasonably withheld. Purchaser shall provide
Seller with a copy of all applicable audit reports and written audit agreements
received by Purchaser and relating to periods for which Seller is partially
responsible.

Section 11.3          Assumed
Seller Obligations.

Subject to the indemnification by Seller under  Section 11.5,
on the Closing Date, Purchaser shall assume and hereby agrees to fulfill,
perform, pay and discharge (or cause to be fulfilled, performed, paid or
discharged) all of the obligations and liabilities of Seller, known or unknown,
with respect to the Assets, regardless of whether such obligations or
liabilities arose prior to, on or after the Effective Time, including but not
limited to obligations to (a) furnish makeup gas according to the terms of
applicable gas sales, gathering or transportation contracts, and to satisfy all
other gas balancing obligations, if any, (b) pay working interests, royalties,
overriding royalties and other interests held in suspense, (c) properly plug
and abandon any and all wells, including inactive wells or temporarily
abandoned wells, drilled on the Properties, as required by Law, (d) replug any
well, wellbore, or previously plugged well on the Properties to the extent
required by Governmental Body, (e) dismantle, salvage and remove any equipment,
structures, materials, platforms, flowlines, and property of whatever kind
related to or associated with operations and activities conducted on the
Properties, (f) clean up, restore and/or remediate the premises covered by or
related to the Assets in accordance with applicable agreements and Laws, (g)
perform all obligations applicable to or imposed on the

 

 42

lessee, owner, or
operator under the Leases or with respect to the Mineral Interests and related
contracts, or as required by applicable Laws, and (h) pay working interests,
royalties, overriding royalties and other interests payable to third parties on
account of production from the Assets other than any royalties owed on account
of production from the Properties before the Closing Date as a result of or
attributable to the resolution of the Royalty Actions (collectively, “Royalty
Amounts”) (all of said obligations and liabilities, subject to the exclusions
below, herein being referred to as the “Assumed Seller Obligations”); provided,
however, that the Assumed Seller Obligations shall not include, and Purchaser
shall have no obligation to assume, any obligations or liabilities of Seller to
the extent that they are (such excluded obligations and liabilities, the “Excluded
Seller Obligations”):

(i)                                     attributable
to or arise out of the Excluded Assets;

(ii)                                  except
for Royalty Amounts and except to the extent covered by Section 11.3(v)(D) below, the continuing
responsibility of Seller under Section 11.1
or Section 11.2;

(iii)                               attributable
to or arising out of matters for which Seller is required to indemnify
Purchaser under Section 11.5(c);

(iv)                              except
for Royalty Amounts, Property Costs for which Seller is responsible pursuant to
Section 1.4(b);

(v)                                 (A)
attributable to or arising out of Proceedings set forth under Category 1 on Schedule 5.7(a), (B) Losses owed as a
result of the resolution of the Proceeding listed in item 6 under Category 3 on
Schedule 5.7(a) to the extent such
Losses result from or are attributable to production from the Properties
occurring before the Closing Date, (C) Losses owed as a result of the
resolution of the Proceeding listed in item 7 under Category 3 on Schedule 5.7(a) to the extent such Losses
result from or are attributable to actions occurring before the Closing Date,
(D) royalties owed on account of production from the Properties before the
Closing Date as a result of or attributable to the resolution of the Royalty
Actions and all other Losses owed as a result of the resolution of the Royalty
Actions to the extent such Losses result from or are attributable to production
from such Properties before the Closing Date, (E) Proceedings arising out of or
attributable to Seller’s ownership or operation of the Assets arising after the
date hereof but before Closing, or (F) Proceedings that arise after Closing for
personal injury or death arising and occurring before Closing which is attributable
to Seller’s (or its Affiliates’) ownership or operation of the Assets;

(vi)                              attributable
to or arise out of any noncompliance of Law set forth on Schedule 5.7(b);

(vii)                           Retained
Employee Liabilities; or

(viii)                        attributable to or arise out of any off-site
Environmental Liabilities occurring prior to the Closing Date that relate to
the Assets.

 43
 

Section 11.4          Survival.

(a)           All
representations and warranties of Seller and Purchaser contained herein shall
survive the Closing Date and shall terminate on the first anniversary of the
Closing Date; provided, however, that the representations and warranties
contained in Section 5.3, Section 5.4, Section 5.6, Section 5.8, Section 6.2,
Section 6.3, and Section 6.5 (collectively,
the “Fundamental Representations”)  shall
survive until the expiration of the applicable statute of limitations
period.  Upon the termination of a
representation or warranty in accordance with the foregoing, such
representation or warranty shall have no further force or effect for any purpose
under this Agreement.  The covenants and
other agreements of Seller and Purchaser set forth in this Agreement shall
survive the Closing Date until fully performed.

(b)           No
party hereto shall have any indemnification obligation pursuant to this Article 11 or otherwise in respect of any
representation, warranty, covenant or agreement unless it shall have received
from the party seeking indemnification a written notice (a “Claim Notice”) of
the existence of the claim for or in respect of which indemnification in
respect of such representation, warranty, covenant or agreement is being sought
on or before the expiration of the applicable survival period set forth in Section 11.4(a).  If an Indemnified Party delivers a Claim
Notice to an Indemnifying Party before the expiration of the applicable
survival period set forth in Section 11.4(a),
then the applicable representation, warranty, covenant or agreement shall
survive until, but only for purposes of, the resolution of the matter covered
by such Claim Notice.  A Claim Notice
shall set forth with reasonable specificity (1) the basis for such claim under
this Agreement, and the facts that otherwise form the basis of such claim and
(2) to the extent reasonably estimable, an estimate of the amount of such claim
(which estimate shall not be conclusive of the final amount of such claim) and
an explanation of the calculation of such estimate.

Section 11.5          Indemnification
by Seller.

From and after the Closing, subject to the terms and
conditions of this Article 11,
Seller shall jointly and severally indemnify, defend and hold harmless
Purchaser and its directors, officers, employees, stockholders, members,
agents, consultants, advisors and other representatives (including legal
counsel, accountants and financial advisors) and Affiliates and the successors
and permitted assigns of this Agreement of Purchaser (collectively, the “Purchaser
Indemnified Persons”) from and against any and all Losses asserted against,
resulting from, imposed upon, or incurred or suffered by any Purchaser
Indemnified Person to the extent resulting from, arising out of or relating to:

(a)           any
breach of any representation or warranty of Seller contained in this Agreement
or confirmed in any certificate furnished by or on behalf of Seller in
connection with this Agreement;

(b)           any
breach or nonfulfillment of or failure to perform any covenant or agreement of
Seller contained in this Agreement or confirmed in any certificate furnished by
or on behalf of Seller in connection with this Agreement; and

(c)           any
Excluded Seller Obligations.

Section 11.6          Indemnification
by Purchaser.

From and after the Closing, subject to the terms and
conditions of this Article 11,
Purchaser shall indemnify, defend and hold harmless Seller and its directors,
officers, employees, agents, consultants, stockholders, advisors and other
representatives (including 

 44
 

legal counsel,
accountants and financial advisors), and Seller’s successors, permitted assigns
of this Agreement and Affiliates (collectively, the “Seller Indemnified Persons”)
from and against any and all Losses, asserted against, resulting from, imposed
upon, or incurred or suffered by any Seller Indemnified Person, directly or
indirectly, to the extent resulting from, arising out of, or relating to:

(a)           any
breach of any representation or warranty of Purchaser contained in this
Agreement or confirmed in any certificate furnished by or on behalf of
Purchaser to Seller in connection with this Agreement REGARDLESS OF FAULT;

(b)           any
breach or nonfulfillment of or failure to perform any covenant or agreement of
Purchaser contained in this Agreement REGARDLESS
OF FAULT or confirmed in any certificate furnished by or on behalf
of Purchaser to Seller in connection with this Agreement;

(c)           the
ownership, use or operation of the Assets after the Effective Time;

(d)           the
Assumed Seller Obligations REGARDLESS OF
FAULT; and

(e)           Environmental
Laws, Environmental Liabilities, the release of materials into the environment
or protection of human health, safety, natural resources or the environment, or
any other environmental condition of the Assets, REGARDLESS OF FAULT.

Section 11.7          Indemnification
Proceedings.

(a)           In
the event that any claim or demand for which Seller or Purchaser (such Person,
an “Indemnifying Party”) may be liable to an Purchaser Indemnified Person under
Section 11.5 or to an Seller
Indemnified Person under Section 11.6
(an “Indemnified Party”) is asserted against or sought to be collected from an
Indemnified Party by a third party (a “Third Party Claim,”) the Indemnified Party
shall with reasonable promptness notify the Indemnifying Party of such Third
Party Claim by delivery of a Claim Notice, provided that the failure or delay
to so notify the Indemnifying Party shall not relieve the Indemnifying Party of
its obligations under this Article 11,
except (and solely) to the extent that the Indemnifying Party demonstrates that
its defense of such Third Party Claim is actually and materially prejudiced
thereby.  The Indemnifying Party shall
have thirty (30) days from receipt of the Claim Notice from the Indemnified
Party (in this Section 11.7, the “Notice
Period”) to notify the Indemnified Party whether or not the Indemnifying Party
desires, at the Indemnifying Party’s sole cost and expense, to defend the
Indemnified Party against such claim or demand; provided, that the Indemnified
Party is hereby authorized prior to and during the Notice Period, and at the
cost and expense of the Indemnifying Party, to file any motion, answer or other
pleading that it shall reasonably deem necessary to protect its interests or
those of the Indemnifying Party.  The
Indemnifying Party shall have the right to assume the defense of such Third
Party Claim only if and for so long as the Indemnifying Party (i) notifies the
Indemnified Party during the Notice Period that the Indemnifying Party is
assuming the defense of such Third Party Claim, (ii) uses counsel of its own
choosing that is reasonably satisfactory to the Indemnified Party, and (iii)
conducts the defense of such Third Party Claim in an active and diligent
manner.  If the Indemnifying Party is
entitled to, and does, assume the defense of any such Third Party Claim, the
Indemnified Party shall have the right to employ separate counsel at its own
expense and to participate in the defense thereof; provided, however, that
notwithstanding the foregoing, the Indemnifying Party shall pay the reasonable
attorneys’ fees of the Indemnified Party if the Indemnified Party’s counsel
shall have advised the Indemnified Party that there is a conflict of interest
that could make it inappropriate under applicable standards of professional
conduct to 

 45
 

have common counsel for the Indemnifying Party and the Indemnified
Party (provided that the Indemnifying Party shall not be responsible for paying
for more than one separate firm of attorneys and one local counsel to represent
all of the Indemnified Parties subject to such Third Party Claim).  If the Indemnifying Party elects (and is
entitled) to assume the defense of such Third Party Claim, (i) no compromise or
settlement thereof or consent to any admission or the entry of any judgment
with respect to such Third Party Claim may be effected by the Indemnifying
Party without the Indemnified Party’s written consent (which shall not be
unreasonably withheld, conditioned or delayed) unless the sole relief provided
is monetary damages that are paid in full by the Indemnifying Party (and no
injunctive or other equitable relief is imposed upon the Indemnified Party) and
there is an unconditional provision whereby each plaintiff or claimant in such
Third Party Claim releases the Indemnified Party from all liability with
respect thereto and (ii) the Indemnified Party shall have no liability with
respect to any compromise or settlement thereof effected without its written
consent (which shall not be unreasonably withheld).  If the Indemnifying Party elects not to
assume the defense of such Third Party Claim (or fails to give notice to the
Indemnified Party during the Notice Period or otherwise is not entitled to
assume such defense), the Indemnified Party shall be entitled to assume the
defense of such Third Party Claim with counsel of its own choice, at the
expense and for the account of the Indemnifying Party; provided, however, that
the Indemnified Party shall make no settlement, compromise, admission, or
acknowledgment that would give rise to liability on the part of any
Indemnifying Party without the prior written consent of such Indemnifying
Party, which consent shall not be unreasonably withheld, conditioned or
delayed.

(b)           Notwithstanding
the foregoing, the Indemnifying Party shall not be entitled to control (but
shall be entitled to participate at its own expense in the defense of), and the
Indemnified Party, shall be entitled to have sole control over, the defense or
settlement, compromise, admission, or acknowledgment of any Third Party Claim
(i) at the reasonable expense of the Indemnifying Party, as to which the
Indemnifying Party fails to assume the defense during the Notice Period after
the Indemnified Party gives notice thereof to the Indemnifying Party or (ii) at
the reasonable expense of the Indemnifying Party, to the extent the Third Party
Claim seeks an order, injunction, or other equitable relief against the
Indemnified Party which, if successful, could materially adversely affect the
business, condition (financial or other), capitalization, assets, liabilities,
results of operations or prospects of the Indemnified Party.  The Indemnified Party shall make no
settlement, compromise, admission, or acknowledgment that would give rise to
liability on the part of the Indemnifying Party without the prior written
consent of the Indemnifying Party (which consent shall not be unreasonably
withheld, conditioned or delayed).

(c)           In
any case in which an Indemnified Party seeks indemnification hereunder and no
Third Party Claim is involved, the Indemnified Party shall deliver a Claim
Notice to the Indemnifying Party within a reasonably prompt period of time
after an officer of such Indemnified Party or its Affiliates has obtained knowledge
of the Loss giving rise to indemnification hereunder.  The failure or delay to so notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations
under this Article 11 except to
the extent such failure results in insufficient time being available to permit
the Indemnifying Party to effectively mitigate the resulting Losses or
otherwise prejudices the Indemnifying Party.

Section 11.8          Limitations
on Indemnities.

(a)           Notwithstanding
the foregoing, (i) Seller shall not be obligated to indemnify any Purchaser
Indemnified Persons for Losses pursuant to Section
11.5(a), and Purchaser shall not be obligated to indemnify the
Seller Indemnified Persons for Losses pursuant to Section 

 46
 

 

11.6(a), in each
case, pursuant to this Article 11 unless
and until the amount of all Losses incurred by any Purchaser Indemnified
Persons, or by any Seller Indemnified Persons, as the case may be, exceeds, in
the aggregate, $21,500,000 (the “Deductible”), in which event the party or
parties seeking indemnity may recover all Losses incurred in excess of the
Deductible, and (i) Seller’s maximum liability for Losses pursuant to Section 11.5(a), and Purchaser’s maximum
liability for Losses pursuant to Section
11.6(a), in each case, shall be $215,000,000 (the “Maximum Indemnity
Amount”); provided, however, that, notwithstanding the foregoing, the
Deductible and the Maximum Indemnity Amount shall not apply to (and the
Indemnified Parties shall be entitled to be indemnified for all Losses relating
to) any claims based on the occurrence of common law actual fraud and (B) any
claims asserted under Section 11.5(a),
or Section 11.6(a) insofar as such
claims relate to any breach of Fundamental Representations or any certificate
to the extent based on any such Fundamental Representation.

(b)           Solely
for purposes of calculating the amount of Losses incurred arising out of or
relating to any breach or inaccuracy of a representation or warranty (and not
for determining whether a breach has occurred), the references to “Material
Adverse Effect” or other materiality qualifications (or correlative terms)
shall be disregarded.

(c)           The
liability of any party under Article 11
shall be in addition to, and not exclusive of, any other liability that such
party may have at Law or equity based on such party’s common law actual
fraud.  None of the provisions set forth
in this Agreement, including, but not limited to, the provisions set forth in Section 3.4(j) (relating to the Individual
Defect Deductible), Section 11.4(b) (relating
to limitations on the period during which a claim for indemnification may be
brought)  or Section 11.8(a) (relating to the
Deductible), shall be deemed a waiver by any party to this Agreement of any
right or remedy which such party may have at Law or equity based on any other
party’s common law actual fraud, nor shall any such provisions limit, or be
deemed to limit, (i) the amounts of recovery sought or awarded in any such
claim for common law actual fraud, (ii) the time period during which a
claim for common law actual fraud may be brought or (iii) the recourse which
any such party may seek against another party with respect to a claim for
common law actual fraud; provided, that with respect to such rights and
remedies at law or equity, the parties further acknowledge and agree that none
of the provisions of this Section 11.8(c),
nor any reference to this Section 11.8(c)
throughout this Agreement, shall be deemed a waiver of any defenses which may
be available in respect of actions or claims for common law actual fraud,
including but not limited to, defenses of statutes of limitations or
limitations of damages.

Section 11.9          Release.

EXCEPT WITH RESPECT TO SECTION 5.7 AND
POST-CLOSING REMEDIATION AGREED TO PURSUANT TO SECTION 4.3, PURCHASER HEREBY
RELEASES, REMISES AND FOREVER DISCHARGES THE SELLER INDEMNIFIED PERSONS FROM
ANY AND ALL CLAIMS, KNOWN OR UNKNOWN, WHETHER
NOW EXISTING OR ARISING IN THE FUTURE, CONTINGENT OR OTHERWISE, WHICH
PURCHASER MIGHT NOW OR SUBSEQUENTLY MAY HAVE AGAINST THE SELLER INDEMNIFIED PERSONS,
RELATING DIRECTLY OR INDIRECTLY TO THE CLAIMS ARISING OUT OF OR INCIDENT TO ENVIRONMENTAL LAWS, ENVIRONMENTAL LIABILITIES,
THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR PROTECTION OF HUMAN HEALTH,
SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, INCLUDING, WITHOUT
LIMITATION, RIGHTS TO CONTRIBUTION UNDER CERCLA, REGARDLESS OF FAULT.

 47
 

Section 11.10       Disclaimers.

(a)           EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN
THIS AGREEMENT, OR CONFIRMED IN THE CERTIFICATE OF SELLER TO BE DELIVERED
PURSUANT TO SECTION 9.2(c), IN THE CONVEYANCE, (I) SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, AND (II) SELLER
EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION,
WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING)
TO PURCHASER OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR
REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, ANY OPINION, INFORMATION,
PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO PURCHASER BY ANY OFFICER,
DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF SELLER OR
ANY OF ITS AFFILIATES).

(b)           EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 5
OF THIS AGREEMENT, OR CONFIRMED IN THE CERTIFICATE OF SELLER TO BE DELIVERED
PURSUANT TO SECTION 9.2(c), IN THE CONVEYANCE, AND WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSETS,
(II) THE CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY
REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC
DATA OR INTERPRETATION, RELATING TO THE ASSETS, (III) THE QUANTITY, QUALITY
OR  RECOVERABILITY OF PETROLEUM
SUBSTANCES IN OR FROM THE ASSETS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSETS
OR FUTURE REVENUES GENERATED BY THE ASSETS, (V) THE PRODUCTION OF HYDROCARBONS
FROM THE ASSETS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY,
DESIGN OR MARKETABILITY OF THE ASSETS, (VII) THE CONTENT, CHARACTER OR NATURE
OF ANY DESCRIPTIVE MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS
PREPARED BY THIRD PARTIES, (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY
HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO PURCHASER OR ITS AFFILIATES, OR ITS
OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
DISCUSSION OR PRESENTATION RELATING THERETO, AND FURTHER DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY,
FREEDOM FROM REDHIBITORY VICES OR DEFECTS (INCLUDING THOSE CONTEMPLATED IN
LOUISIANA CIVIL CODE ARTICLES 2475, AND 2520 THROUGH 2548), FITNESS FOR A
PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY
EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT
PURCHASER SHALL BE DEEMED TO BE OBTAINING THE ASSETS IN THEIR PRESENT STATUS,
CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND THAT
PURCHASER HAS MADE OR CAUSED TO BE  MADE
SUCH INSPECTIONS AS PURCHASER DEEMS APPROPRIATE, OR (IX) ANY IMPLIED OR EXPRESS
WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT.

(c)           EXCEPT AS REPRESENTED IN SECTION 5.7, SELLER HAS NOT
AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR
CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, ENVIRONMENTAL LIABILITIES, THE
RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH,
SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL
CONDITION OF THE ASSETS, AND 

 48
 

NOTHING IN THIS AGREEMENT OR OTHERWISE SHALL
BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND PURCHASER SHALL BE
DEEMED TO BE TAKING THE ASSETS “AS IS” AND “WHERE IS” FOR PURPOSES OF THEIR
ENVIRONMENTAL CONDITION.

Section 11.11       Waiver
of Trade Practices Acts.

(a)           It
is the intention of the parties that Purchaser’s rights and remedies with
respect to this transaction and with respect to all acts or practices of
Seller, past, present or future, in connection with this transaction shall be
governed by legal principles other than the Texas Deceptive Trade Practices—Consumer
Protection Act, Tex. Bus. & Com. Code Ann. § 17.41 et seq. (the “DTPA”) or the Louisiana unfair trade practices
and consumer protection law, La. R.S. 51:1402, et seq.
(the “UTPCPL”).  As such, Purchaser
hereby waives the applicability of the DTPA and the UTPCPL to this transaction
and any and all duties, rights or remedies that might be imposed by the DTPA
and/or the UTPCPL, whether such duties, rights and remedies are applied
directly by the DTPA or the UTPCPL itself or indirectly in connection with
other statutes; provided, however, Purchaser does
not waive § 17.555 of the DTPA. 
Purchaser acknowledges, represents and warrants that it is purchasing the
goods and/or services covered by this Agreement for commercial or business use;
that it has assets of $5,000,000.00 or more according to its most recent
financial statement prepared in accordance with GAAP; that it has knowledge and
experience in financial and business matters that enable it to evaluate the
merits and risks of a transaction such as this; and that it is not in a
significantly disparate bargaining position with Seller.

(b)           Purchaser
expressly recognizes that the price for
which Seller has agreed to perform its obligations under this Agreement has
been predicated upon the inapplicability of the DTPA and the UTPCPL and this
waiver of the DTPA and the UTPCPL. 
Purchaser further recognizes that Seller, in determining to
proceed with the entering into of this Agreement, has expressly relied on this
waiver and the inapplicability of the DTPA and the UTPCPL.

Section 11.12       Redhibition
Waiver.

Purchaser
waives all rights in redhibition pursuant to Louisiana Civil Code Articles 2475
and 2520 through 2548, and acknowledges that this express waiver shall be
considered a material and integral part of this transaction and the
consideration thereof.  Purchaser
acknowledges that this waiver has been brought to its attention and has been
explained in detail and that Purchaser has voluntarily and knowingly consented
to this waiver of warranty of fitness and warranty against redhibitory vices
and defects for the Assets.

Section 11.13       Recording.

As soon as practicable after Closing, Purchaser shall
record the Conveyance in the appropriate counties and/or parishes and provide
Seller with copies of all recorded or approved instruments.  The Conveyance is intended to convey all of
the Properties being conveyed pursuant to this Agreement.  Certain Properties or specific portions of
the Properties that are leased from, or require the approval to transfer by, a
Governmental Body are conveyed under the Conveyance and also are described and
covered by other separate assignments made by Seller to Purchaser on officially
approved forms, or forms acceptable to such entity, in sufficient multiple
originals to satisfy applicable statutory and regulatory requirements.  The interests conveyed by such separate
assignments are the same, and not in addition to, the interests conveyed in the
Conveyance attached as Exhibit B.  Further, such assignments shall be deemed to
contain the special warranty of title of Seller and all of the exceptions,
reservations,

 49

rights, titles, power and
privileges set forth herein and in the Conveyance as fully and only to the
extent as though they were set forth in each such separate assignment.

ARTICLE 12

MISCELLANEOUS

Section 12.1          Counterparts.

This Agreement may be executed and delivered
(including by facsimile transmission) in counterparts, each of which shall be
deemed an original instrument, but all such counterparts together shall
constitute but one agreement.

Section 12.2          Notice.

All notices which are required or may be given
pursuant to this Agreement shall be sufficient in all respects if given in
writing and delivered personally, by telecopy or by registered or certified
mail, postage prepaid, as follows:

	
  If to Seller:

  	
  Anadarko Petroleum Corporation

  
	
   

  	
  Anadarko E&P Company LP

  
	
   

  	
  Howell Petroleum Corporation

  
	
   

  	
  Kerr-McGee Oil & Gas Onshore LP

  
	
   

  	
  1201 Lake Robbins Drive

  
	
   

  	
  The Woodlands, TX 77380

  
	
   

  	
  Attention:

  	
  Transaction Manager, Business Development 

  
	
   

  	
  Telephone:

  	
  (832)636-3088

  
	
   

  	
  Telecopy:

  	
  (832)636-5889

  
	
   

  	
   

  
	
  With a copy to (which:

  	
  Anadarko Petroleum Corporation

  
	
  shall not constitute

  	
  1201 Lake Robbins Drive

  
	
  notice to Seller):

  	
  The Woodlands, TX 77380

  
	
   

  	
  Attention:

  	
  Associate General Counsel

  
	
   

  	
   

  	
  Oil, Gas and Minerals

  
	
   

  	
  Telephone:

  	
  (832)636-7530

  
	
   

  	
  Telecopy: 

  	
  (832)636-5889

  
	
   

  	
   

  
	
  If to Purchaser:

  	
  EXCO Resources, Inc.

  
	
   

  	
  12377 Merit Drive, Suite 1700

  
	
   

  	
  Dallas, Texas 75251

  
	
   

  	
  Attention:

  	
  William L. Boeing

  
	
   

  	
  Telephone:

  	
  (214) 368-2084

  
	
   

  	
  Telecopy: 

  	
  (214) 706-3409

  
	
  With a copy to (which

  	
   

  
	
  shall not constitute

  	
   

  
	
  notice to Purchaser):

  	
  Vinson & Elkins L.L.P.

  
	
   

  	
  2001 Ross Avenue, Suite 3700

  
	
   

  	
  Dallas, Texas 75201

  
	
   

  	
  Attention:

  	
  Jeffrey A. Chapman

  
				

 

 50
 

 

	
  

  	
   

  
	
   

  	
  Telephone:

  	
  (214) 220-7797

  
	
   

  	
  Telecopy:

  	
  (214) 999-7797

  
	
   

  	
  Attention:

  	
  P. Gregory Hidalgo

  
	
   

  	
  Telephone:

  	
  (214) 220-7959

  
	
   

  	
  Telecopy:

  	
  (214) 999-7959

  
	
   

  	
   

  

Either party may change its address for notice by
notice to the other in the manner set forth above.  All notices shall be deemed to have been duly
given at the time of receipt by the party to which such notice is addressed.

Section 12.3          Sales
or Use Tax Recording Fees and Similar Taxes and Fees.

Purchaser shall bear any sales, use, excise, real
property transfer, gross receipts, goods and services, registration, capital,
documentary, stamp or transfer Taxes, recording fees and similar Taxes and fees
(collectively “Transfer Taxes”) incurred and imposed upon, or with respect to,
the transactions contemplated by this Agreement.  Seller will determine, and Purchaser will
cooperate with Seller in determining the amount of any Transfer Taxes, if any,
that is due in connection with the transactions contemplated by this Agreement
and Purchaser agrees to pay any such Transfer Tax to Seller or to the
appropriate Governmental Body.  If any of
the transactions contemplated by this Agreement are exempt from any such
Transfer Taxes upon the filing of an appropriate certificate or other evidence
of exemption, Purchaser will timely furnish to Seller such certificate or
evidence.

Section 12.4          Expenses.

Except as otherwise expressly provided in Section 12.3 or elsewhere in this Agreement, (a) all
expenses incurred by Seller in connection with or related to the authorization,
preparation or execution of this Agreement, the Conveyance delivered hereunder
and the Exhibits and Schedules hereto and thereto, and all other matters
related to the Closing, including without limitation, all fees and expenses of
counsel, accountants and financial advisers employed by Seller, shall be borne
solely and entirely by Seller, and (b) all such expenses incurred by Purchaser
shall be borne solely and entirely by Purchaser.

Section 12.5          Change
of Name.

As promptly as practicable, but in any case within
ninety (90) days after the Closing Date, Purchaser shall eliminate the names “Anadarko
Petroleum Corporation”, “Anadarko” and any variants thereof and any names of
Seller’s Affiliates and any variants thereof from the Assets acquired pursuant
to this Agreement and, except with respect to such grace period for eliminating
existing usage, shall have no right to use any logos, trademarks or trade names
belonging to Seller or any of its Affiliates.

Section 12.6          Replacement of Bonds, Letters of
Credit and Guarantees.

The parties understand
that none of the bonds, letters of credit and guarantees, if any, posted by
Seller or any of its Affiliates with Governmental Bodies and relating to the
Assets may 

 51
 

be transferable to Purchaser.  Promptly following Closing, Purchaser shall
obtain, or cause to be obtained in the name of Purchaser, replacements for such
bonds, letters of credit and guarantees, to the extent such replacements are
necessary to permit the cancellation of the bonds, letters of credit and
guarantees posted by Seller or any of its Affiliates or to consummate the
transactions contemplated by this Agreement.

Section 12.7          Governing
Law and Venue.

THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE
PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OTHERWISE
APPLICABLE TO SUCH DETERMINATIONS. 
JURISDICTION AND VENUE WITH RESPECT TO ANY DISPUTES ARISING HEREUNDER
SHALL BE PROPER ONLY IN HARRIS COUNTY, TEXAS.

Section 12.8          Captions.

The captions in this Agreement are for convenience
only and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.

Section 12.9          Waivers.

Any failure by any party or parties to comply with any
of its or their obligations, agreements or conditions herein contained may be
waived in writing, but not in any other manner, by the party or parties to whom
such compliance is owed. No waiver of, or consent to a change in, any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of,
or consent to a change in, other provisions hereof (whether or not similar),
nor shall such waiver constitute a continuing waiver unless otherwise expressly
provided.

Section 12.10       Assignment.

No party shall assign all or any part of this
Agreement, nor shall any party assign or delegate any of its rights or duties
hereunder, without the prior written consent of the other party.  Purchaser shall have the right to designate
an Affiliate to take title to the Assets located in Oklahoma and Kansas by
providing written notice thereof to Seller no later than ten (10) Business Days
prior to the Closing Date; provided, however, that no such designation shall
relieve Purchaser from any of its obligations hereunder.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

Section 12.11       Entire
Agreement.

The Confidentiality Agreement, this Agreement and the
Exhibits and Schedules attached hereto, and the documents to be executed
hereunder constitute the entire agreement between the parties pertaining to the
subject matter hereof, and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties
pertaining to the subject matter hereof.

 52
 

Section 12.12       Amendment.

(a)           This
Agreement may be amended or modified only by an agreement in writing executed
by the  parties hereto.

(b)           No
waiver of any right under this Agreement shall be binding unless executed in
writing by the party to be bound thereby.

Section 12.13       No
Third-Party Beneficiaries.

Nothing in this Agreement shall entitle any Person
other than Purchaser or Seller to any claims, remedy or right of any kind,
except as to those rights expressly provided to the Seller Indemnified Persons
and Purchaser Indemnified Persons (provided, however, any claim for indemnity
hereunder on behalf of an Seller Indemnified Person or an Purchaser Indemnified
Person must be made and administered by a party to this Agreement).

Section 12.14       References.

In this Agreement:

(a)           References
to any gender includes a reference to all other genders;

(b)           References
to the singular includes the plural, and vice versa;

(c)           Reference
to any Article or Section means an Article or Section of this Agreement;

(d)           Reference
to any Exhibit or Schedule means an Exhibit or Schedule to this Agreement, all
of which are incorporated into and made a part of this Agreement;

(e)           Unless
expressly provided to the contrary, “hereunder”, “hereof’, “herein” and words
of similar import are references to this Agreement as a whole and not any
particular Section or other provision of this Agreement;

(f)            “Include”
and “including” shall mean include or including without limiting the generality
of the description preceding such term; and

(g)           Capitalized
terms used herein shall have the meanings ascribed to them in this Agreement as
such terms are identified and/or defined in the Definitions section hereof.

Section 12.15       Construction.

Purchaser is a party capable of making such
investigation, inspection, review and evaluation of the Assets as a prudent
party would deem appropriate under the circumstances including with respect to
all matters relating to the Assets, their value, operation and suitability.
Each of Seller and Purchaser has had substantial input into the drafting and
preparation of this Agreement and has had the opportunity to exercise business
discretion in relation to the negotiation of the details of the transactions
contemplated hereby. This Agreement is the result of arm’s-length negotiations
from equal bargaining positions.  In the
event of a dispute over the meaning or application of this Agreement, it shall
be construed fairly and reasonably and neither more strongly for nor against
either party.

 53
 

Section 12.16       Conspicuousness.

The parties agree that provisions in this Agreement in
“bold” type satisfy any requirements of the “express negligence rule” and any
other requirements at law or in equity that provisions be conspicuously marked
or highlighted.

Section 12.17       Severability.

If any term or other provisions of this Agreement is
held invalid, illegal or incapable of being enforced under any rule of law, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in a materially adverse manner
with respect to either party; provided, however, that if any such term or
provision may be made enforceable by limitation thereof, then such term or
provision shall be deemed to be so limited and shall be enforceable to the
maximum extent permitted by applicable Law.

Section 12.18       Time
of Essence.

Time is of the essence in this Agreement.  If the date specified in this Agreement for
giving any notice or taking any action is not a Business Day (or if the period
during which any notice is required to be given or any action taken expires on
a date which is not a Business Day), then the date for giving such notice or
taking such action (and the expiration date of such period during which notice
is required to be given or action taken) shall be the next day which is a
Business Day.

Section 12.19       Affiliate
Liability.

Each of the following is herein referred to, for
purposes of this Section 12.19, as an “Purchaser
Affiliate”: (i) any direct or indirect holder of equity interests in Purchaser
(whether shareholders or otherwise), and (ii) any director, officer, manager,
employee, representative or agent of (a) Purchaser or (b) any Affiliate of
Purchaser.  Except to the extent that a
Purchaser Affiliate is an express signatory and party hereto, no Purchaser
Affiliate shall have any liability or obligation of any nature whatsoever in
connection with or under this Agreement, or the transactions contemplated
hereby, and Seller hereby waives and releases all claims of any such liability
and obligation.

Section 12.20       Schedules.

The disclosures in any Schedule must relate only to
the representations and warranties in the Section of this Agreement to which it
expressly relates and not to any other representation or warranty in this
Agreement, unless some other representation and warranty is specifically and
clearly referred to in such Schedule.

Section 12.21       Limitation
on Damages.

Notwithstanding any other provision contained
elsewhere in this Agreement to the contrary, the parties acknowledge that this
Agreement does not authorize one party to sue for or collect from the other
party its own punitive damages, or its own consequential or indirect damages in
connection with this Agreement and the transactions contemplated hereby and
each party expressly waives for itself and on behalf of its Affiliates, any and
all Claims it may 

 54
 

have against the other party for its own such damages
in connection with this Agreement and the transactions contemplated hereby.

[SIGNATURES BEGIN ON THE
FOLLOWING PAGE]

 55
 

IN WITNESS WHEREOF, this Agreement has been signed by
each of the parties hereto on the date first above written.

	
  SELLER:

  
	
   

  
	
  ANADARKO PETROLEUM CORPORATION

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ ALBERT L. RICHEY

  	
   

  
	
  Albert L. Richey

  
	
  Vice President,
  Corporate Development

  
	
   

  
	
   

  
	
  ANADARKO E&P COMPANY LP

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ ALBERT L. RICHEY

  	
   

  
	
  Albert L. Richey

  
	
  Vice President,
  Corporate Development

  
	
   

  
	
   

  
	
  HOWELL PETROLEUM CORPORATION

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ ALBERT L. RICHEY

  	
   

  
	
  Albert L. Richey

  
	
  Vice President,
  Corporate Development

  
	
   

  
	
   

  
	
  KERR-MCGEE OIL & GAS ONSHORE LP

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ ALBERT L. RICHEY

  	
   

  
	
  Albert L. Richey

  
	
  Vice President

  
	
   

  
	
   

  
	
   

  
	
  PURCHASER

  
	
   

  
	
  EXCO RESOURCES, INC.

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ JOHN D. JACOBI

  	
   

  
	
  Name: John D. Jacobi

  
	
  Title: Vice President , Business Development

  

 

 56Exhibit
4.6

BUNGE N.A. FINANCE L.P.,

as Issuer

BUNGE LIMITED,

as Guarantor

AND

[                           ],

as Trustee

[       ]%
Senior Notes Due [       ]

INDENTURE

Dated as of                   

TABLE OF CONTENTS

ARTICLE 1

Definitions and Incorporation by Reference

	
  Section 1.01.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.02.

  	
  Incorporation by Reference of Trust Indenture Act

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 1.03.

  	
  Rules of Construction

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  
	
  The Notes

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Form, Dating and Terms

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 2.02.

  	
  Execution and Authentication

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 2.03.

  	
  Registrar and Paying Agent

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 2.04.

  	
  Paying Agent to Hold Money in Trust

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 2.05.

  	
  Noteholder Lists

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 2.06.

  	
  Transfer and Exchange

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 2.07.

  	
  Mutilated, Destroyed, Lost or Stolen Notes

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 2.08.

  	
  Outstanding Notes

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 2.09.

  	
  Temporary Notes

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.10.

  	
  Cancellation

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.11.

  	
  Payment of Interest; Defaulted Interest

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.12.

  	
  Computation of Interest

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 2.13.

  	
  CUSIP and ISIN Numbers

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  
	
  Covenants

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Payment of Notes

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.02.

  	
  Limitation on Liens

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.03.

  	
  Limitation on Sale-Leaseback Transactions

  	
  22

  

 

 i
 

 

	
  Section 3.04.

  	
  Exclusion from Limitations

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.05.

  	
  Maintenance of Office or Agency

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 3.06.

  	
  Corporate Existence

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 3.07.

  	
  Maintenance of Properties; Insurance

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 3.08.

  	
  Payment of Taxes and Other Claims

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 3.09.

  	
  Payments for Consent

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 3.10.

  	
  Compliance Certificate

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 3.11.

  	
  Further Instruments and Acts

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 3.12.

  	
  Statement by Officers as to Default

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 3.13.

  	
  Notice of Change in Bermuda Law, Debt Ratings

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 3.14.

  	
  Offer to Repurchase Upon Change of Control

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  
	
  Successor
  Guarantor or Issuer

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Consolidation, Merger, Amalgamation and Sale of
  Assets by the Guarantor or the Company

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  
	
  Optional
  Redemption of Notes

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Optional Redemption by the Company

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.02.

  	
  Applicability of Article

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.03.

  	
  Election to Redeem; Notice to Trustee

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.04.

  	
  Selection by Trustee of Notes to Be Redeemed

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.05.

  	
  Notice of Redemption

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 5.06.

  	
  Deposit of Redemption Price

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 5.07.

  	
  Notes Payable on Redemption Date

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 5.08.

  	
  Notes Redeemed in Part

  	
  31

  

 

 ii
 

 

	
  ARTICLE 6

  
	
  Defaults and
  Remedies

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Events of Default

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 6.02.

  	
  Acceleration

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 6.03.

  	
  Other Remedies

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 6.04.

  	
  Waiver of Past Defaults

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 6.05.

  	
  Control by Majority

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.06.

  	
  Limitation on Suits

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.07.

  	
  Rights of Holders to Receive Payment

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.08.

  	
  Collection Suit by Trustee

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.09.

  	
  Trustee May File Proofs of Claim

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 6.10.

  	
  Priorities

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 6.11.

  	
  Undertaking for Costs

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  
	
  Trustee

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Duties of Trustee

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 7.02.

  	
  Rights of Trustee

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 7.03.

  	
  Individual Rights of Trustee

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 7.04.

  	
  Trustee’s Disclaimer

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 7.05.

  	
  Notice of Defaults

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 7.06.

  	
  Report by Trustee to Holders

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 7.07.

  	
  Compensation and Indemnity

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 7.08.

  	
  Replacement of Trustee

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 7.09.

  	
  Successor Trustee by Merger

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.10.

  	
  Eligibility; Disqualification

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.11.

  	
  Preferential Collection of Claims Against Company

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 7.12.

  	
  Trustee’s Application for Instruction from the
  Company

  	
  41

  

 

 iii
 

 

	
  ARTICLE 8

  
	
  Discharge of
  Indenture; Defeasance

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Discharge of Liability on Notes; Defeasance

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 8.02.

  	
  Conditions to Defeasance

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 8.03.

  	
  Application of Trust Money

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 8.04.

  	
  Repayment to Company

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 8.05.

  	
  Indemnity for U.S. Government Securities

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 8.06.

  	
  Reinstatement

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  
	
  Amendments

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Without Consent of Holders

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.02.

  	
  With Consent of Holders

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.03.

  	
  Compliance with Trust Indenture Act

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 9.04.

  	
  Revocation and Effect of Consents and Waivers

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 9.05.

  	
  Notation on or Exchange of Notes

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 9.06.

  	
  Trustee to Sign Amendments

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  
	
  Guarantee

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Guarantee

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 10.02.

  	
  No Subrogation

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 10.03.

  	
  Consideration

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 10.04.

  	
  Additional Amounts

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  
	
  Miscellaneous

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Trust Indenture Act Controls

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 11.02.

  	
  Notices

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 11.03.

  	
  Communication by Holders with Other Holders

  	
  50

  

 

 iv
 

 

	
  Section 11.04.

  	
  Certificate and Opinion as to Conditions Precedent

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 11.05.

  	
  Statements Required in Certificate or Opinion

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 11.06.

  	
  When Notes Disregarded

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 11.07.

  	
  Rules by Trustee, Paying Agent and Registrar

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 11.08.

  	
  Legal Holidays

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 11.09.

  	
  GOVERNING LAW

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 11.10.

  	
  No Recourse Against Others

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 11.11.

  	
  Successors

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 11.12.

  	
  Consent to Jurisdiction

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 11.13.

  	
  Appointment for Agent for Service of Process

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 11.14.

  	
  Waiver of Immunities

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 11.15.

  	
  Foreign Taxes

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 11.16.

  	
  Judgment Currency

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 11.17.

  	
  No Bankruptcy Petition Against the Borrower;
  Liability of the Borrower

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 11.18.

  	
  Multiple Originals

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 11.19.

  	
  Qualification of Indenture

  	
  54

  
	
   

  	
   

  	
   

  
	
  Section 11.20.

  	
  Table of Contents; Headings

  	
  54

  

 

 

	
  EXHIBIT A

  	
  Form of the Initial Note and Subsequent Note

  	
   

  
	
  SCHEDULE 1.1

  	
  Material Subsidiaries

  	
   

  
	
  SCHEDULE 3.4

  	
  Existing Liens

  	
   

  

 

 v

CROSS-REFERENCE
TABLE

	
  Trust
  Indenture

  Act Section

  	
   

  	
  Indenture

  
	
  310(a)(1)

  	
   

  	
   

  	
  Section 7.10.

  
	
  (a)(2)

  	
   

  	
  Section 7.10.

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  Section 7.08. , Section 7.10.

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  Section 7.11.

  
	
  (b)

  	
   

  	
  Section 7.11.

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  Section 2.05.

  
	
  (b)

  	
   

  	
  Section 11.03.

  
	
  (c)

  	
   

  	
  Section 11.03.

  
	
  313(a)

  	
   

  	
  Section 11.06.

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  Section 7.06.

  
	
  (c)

  	
   

  	
  Section 7.06.

  
	
  (d)

  	
   

  	
  Section 7.06.

  
	
  314(a)

  	
   

  	
  Section 3.10., Section 11.02.,

  
	
   

  	
   

  	
  Section 11.05.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  Section 11.04.

  
	
  (c)(2)

  	
   

  	
  Section 11.04.

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  Section 11.05.

  
	
  315(a)

  	
   

  	
  Section 7.01.

  
	
  (b)

  	
   

  	
  Section 7.05., Section 11.02.

  
	
  (c)

  	
   

  	
  Section 7.01.

  
	
  (d)

  	
   

  	
  Section 7.01.

  
	
  (e)

  	
   

  	
  Section 6.11.

  
	
  316(a)(last sentence)

  	
   

  	
  Section 11.06.

  
	
  (a)(1)(A)

  	
   

  	
  Section 6.05.

  
	
  (a)(1)(B)

  	
   

  	
  Section 6.04.

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  Section 6.08.

  
	
  317(a)(1)

  	
   

  	
  Section 6.08.

  
	
  (a)(2)

  	
   

  	
  Section 6.09.

  
	
  (b)

  	
   

  	
  Section 2.04.

  
	
  318(a)

  	
   

  	
  Section 11.01.

  
				

 

N.A. means Not
Applicable.

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

 i

INDENTURE dated as
of _____________, among BUNGE N.A. FINANCE L.P., a Delaware limited partnership
(the “Company”), as issuer, BUNGE LIMITED, a
company formed under the laws of Bermuda with limited liability (the “Guarantor”), as guarantor, and [ ____________________________
], [a _____________________ ] (the “Trustee”), as
trustee.

Each party agrees
as follows for the benefit of the other parties and for the equal and ratable
benefit of the Holders of (i) the Company’s [ ____ ]% Senior Notes Due [ _____
] issued on the date hereof and the guarantees thereof by the Guarantor (the “Initial Notes”) and (ii) if and when issued, additional [
____ ]% Senior Notes Due [ _____ ] which may be offered during the Subsequent
Issuance Period and the guarantees thereof by the Guarantor (the “Subsequent Notes” and together with the Initial Notes, the “Notes”).

ARTICLE
1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.  Definitions.

“Affiliate”
means, with respect to any specified Person, any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition, “control”
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms “controlling”
and “controlled” have meanings correlative to the foregoing; provided, however, that the existence of a management
contract by the Company or an Affiliate of the Company to manage another entity
shall not be deemed to be control.

“Agent Member” has the meaning ascribed to it in Section
2.01(d)(iii) hereof.

“Attributable
Indebtedness” means, when used with respect to any
Sale-Leaseback Transaction, as at the time of determination, the present value
(discounted at the rate of interest set forth in or implicit in the terms of
the lease) of the total obligations of the lessee for rental payments (other
than amounts required to be paid on account of property taxes, maintenance,
repairs, insurance, assessments, utilities, operating and labor costs and other
items that do not constitute payments for property rights) during the remaining
term of the lease included in such Sale-Leaseback Transaction (including any
period for which such lease has been extended).

“Authenticating Agent” has the
meaning ascribed to it in Section 2.02 hereof.

“Below Investment Grade
Rating Event” means the Notes are rated below an Investment Grade Rating
by both Rating Agencies on any date from the date of the public notice of an
event that would, if consummated, result in a Change of Control until the end
of the sixty (60) day period following public notice of the occurrence of the
Change of Control, which sixty (60) day period shall be extended so long as the
rating of the Notes is under publicly announced consideration for possible
downgrade by both of the Rating Agencies.

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

“Business
Day” means a day other than a Saturday, Sunday or other day
on which commercial banking institutions are authorized or required by law to
close in The City of New York, New York.

“Capital
Stock” means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options (whether or not currently
exercisable), participations or other equivalents of or interests in (however
designated) the equity (which includes, but is not limited to, common stock or
shares, preferred stock or shares and partnership and joint venture interests)
of such Person (excluding any debt securities convertible into, or exchangeable
for, such equity).

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

(1)           the Guarantor becomes
aware (by way of a report or any other filing pursuant to Section 13(d) of the
Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by
any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act, or any successor provision), including any group acting
for the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or
in a related series of transactions, by way of merger, consolidation or other
business combination or purchase of beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act, or any successor provision) of 50% or more
of the total voting power of the Voting Stock of the Guarantor or any of its
direct or indirect parent companies holding directly or indirectly 100% of the
total voting power of the Voting Stock of the Guarantor;

(2)           the sale, lease or transfer, in one
or a series of related transactions, of all or substantially all of the assets
of the Guarantor and its Subsidiaries, taken as a whole, to any Person other
than a Permitted Holder; or

(3)           the first day on which a majority of
the members of the Guarantor’s Board of Directors are not Continuing Directors.

“Change of Control Offer”
has the meaning ascribed to it in Section 3.14 hereof.

“Change of Control Payment”
has the meaning ascribed to it in Section 3.14 hereof.

“Change of Control Payment
Date” has the meaning ascribed to it in Section 3.14 hereof.

“Change of Control
Triggering Event” means the occurrence of both a Change of Control
and a Below Investment Grade Rating Event.

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

“Company” means
Bunge N.A. Finance L.P. or its successor.

“Company Order”
has the meaning ascribed to it in Section 2.02 hereof.

“Comparable Treasury Issue” means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes that would be utilized, at the
time of selection and in accordance with customary financial

 2
 

practice
in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the Notes.

“Comparable Treasury Price” means, with respect to any date
fixed for the redemption of Notes, (a) the bid price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) at 4:00 P.M.
on the third business day preceding such date, as set forth on “Telerate Page
500” (or such other page as may replace Telerate Page 500), or (b) if such page
(or any successor page) is not displayed or does not contain such bid prices at
such time (i) the average of the Reference Treasury Dealer Quotations obtained
by the Trustee for such date, after excluding the highest and lowest of four
such Reference Treasury Dealer Quotations, or (ii) if the Trustee is unable to
obtain at least four such Reference Treasury Dealer Quotations, the average of
all Reference Treasury Dealer Quotations obtained by the Trustee.

“Consolidated Net Tangible
Assets” means, at any date of determination, the total amount of
assets of the Guarantor and its consolidated Subsidiaries after deducting
therefrom:

(1)           all
current liabilities (excluding any current liabilities that by their terms are
extendable or renewable at the option of the obligor thereon to a time more
than 12 months after the time as of which the amount thereof is being
computed);

(2)           total
prepaid expenses and deferred charges; and

(3)           all
goodwill, trade names, trademarks, patents, licenses, copyrights and other
intangible assets, all as set forth, or on a pro forma basis would be set
forth, on the consolidated balance sheet of the Guarantor and its consolidated
Subsidiaries for its most recently completed fiscal quarter, prepared in
accordance with U.S. GAAP.

“Continuing Directors” means, as
of any date of determination, any member of the Board of Directors of the
Guarantor who (1) was a member of such Board of Directors on the date of the
issuance of the Initial Notes; or (2) was nominated for election, appointed or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election (either by a specific vote or by approval of the
Guarantor’s proxy statement in which such member was named as a nominee for
election as a director).

“Corporate Trust Office”
has the meaning ascribed to it in Section 3.05 hereof.

“covenant defeasance option”
has the meaning ascribed to it in Section 8.01(b) hereof.

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

“Defaulted Interest”
has the meaning ascribed to it in Section 2.11 hereof.

“Definitive Notes”
means certificated Notes.

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

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

“Event of Default”
has the meaning ascribed to it in Section 6.01 hereof.

 3
 

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

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

“Fiscal Year”
means the fiscal year of the Company ending on December 31 of each year.

“General Partners” shall mean, collectively,
Bunge Canada Holdings II ULC, a Nova Scotia unlimited liability company, and
Bunge Alberta I ULC, an Alberta unlimited liability corporation, and their
respective successors and assigns.

“Global Note”
has the meaning ascribed to it in Section 2.01(a) hereof.

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

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

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

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

“Guarantee”
means any guarantee of payment of the Notes and any other obligations of the
Company by the Guarantor pursuant to the terms of this Indenture.

“Guarantor”
means Bunge Limited.

“Hedge Agreements” means all interest rate swaps, caps or
collar agreements or similar arrangements dealing with interest rates or
currency exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.

“Holder” or “Noteholder” means the Person in whose name a Note is
registered in the Note Register.

“Indebtedness” means, as to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(c) all obligations of such Person to pay the deferred purchase

 4
 

price
of property, except trade accounts payable arising in the ordinary course of
business, (d) all obligations of such Person as lessee which are capitalized in
accordance with U.S. GAAP, (e) all obligations of such Person created or
arising under any conditional sales or other title retention agreement with
respect to any property acquired by such Person (including without limitation,
obligations under any such agreement which provides that the rights and
remedies of the seller or lender thereunder in the event of default are limited
to repossession or sale of such property), (f) all obligations of such Person
with respect to letters of credit and similar instruments, including without
limitation obligations under reimbursement agreements, (g) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has existing
right, contingent or otherwise, to be secured by) a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person, (h) all net
obligations of such Person in respect of equity derivatives and Hedge
Agreements and (i) all guarantees of such Person (other than guarantees of
obligations of direct or indirect Subsidiaries of such Person).

“Indenture”
means this Indenture, as amended or supplemented from time to time in
accordance with its terms.

“Independent Investment
Banker” means any of [ _______________________ ] or [ _______________________
], or, if all such firms are unwilling or unable to select the applicable
Comparable Treasury Issue, a leading independent investment banking institution
appointed by the Trustee and reasonably acceptable to the Company.

“Initial Notes”
has the meaning ascribed to it in the second introductory paragraph of this
Indenture.

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

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

“legal defeasance option”
has the meaning ascribed to it in Section 8.01(b) hereof.

“Legal Holiday”
has the meaning ascribed to it in Section 11.08 hereof.

“Lien” means any
mortgage, lien, security interest, pledge, charge or other encumbrance.

“Material Adverse Effect” means a material adverse effect, or
any development involving a prospective material adverse effect, in the
condition, financial or otherwise, or in the earnings, business or operations
of the Guarantor and its consolidated Subsidiaries taken as a whole.

“Material Subsidiary” means, at any time, any Subsidiary of
the Guarantor which at such time is a “Significant Subsidiary” under Regulation
S-X of the Exchange Act. The Material Subsidiaries as of the date hereof are
set forth on Schedule 1.1 hereto.

 5
 

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

“Note Register”
means the register of Notes, maintained by the Registrar, pursuant to Section
2.03 hereof.

“Notes” means
the collective reference to the Initial Notes and the Subsequent Notes.

“Obligations” has
the meaning ascribed to it in Section 10.01 hereof.

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

“Officer’s Certificate” means a certificate signed by an
Officer or attorney-in-fact of the Company or the Guarantor, as applicable.

“Opinion of Counsel” means a written opinion from legal
counsel, which counsel may be an employee of or counsel to the Company, who
shall be acceptable to the Trustee. The form and substance of such Opinion of
Counsel shall likewise be acceptable to the Trustee.

“Pari Passu Indebtedness” means Indebtedness for borrowed
money and Indebtedness incurred in connection with Hedge Agreements, in each
case which ranks not greater than pari passu (in priority of payment) with the
Notes.

“Paying Agent” means the Person (including the Company, the
Guarantor or any Subsidiary) authorized by the Company to pay the principal of
(or premium, if any) or interest, if any, on any Notes on behalf of the
Company.

“Permitted Indebtedness” means (a) Indebtedness of the
Company under the Notes and (b) Pari Passu Indebtedness.

“Permitted Liens”
means:

(1)           Liens for current
taxes, assessments or other governmental charges which are not delinquent or
remain payable without any penalty, or the validity of which is contested in
good

 6
 

faith
by appropriate proceedings upon stay of execution of the enforcement thereof or
upon posting a bond in connection therewith;

(2)           any Lien pursuant to
any order or attachment or similar legal process arising in connection with
court proceedings; provided that the execution or other enforcement thereof is
effectively stayed or a sufficient bond had been posted and the claims secured
thereby are being contested at the time in good faith by appropriate
proceedings;

(3)           any Liens securing
bonds posted with respect to and in compliance with clauses (1) and (2) above;

(4)           any Liens securing the
claims of mechanics, laborers, workmen, repairmen, materialmen, suppliers,
carriers, warehousemen, landlords, or vendors or other claims provided for by
mandatory provisions of law which are not yet due and delinquent, or are being
contested in good faith by appropriate proceedings;

(5)           any Lien on any
Restricted Property securing Indebtedness incurred or assumed solely for the
purpose of financing all or any part of the cost of constructing or acquiring
such Restricted Property, which Lien attaches to such Restricted Property
concurrently with or within 120 days after construction, acquisition or
completion of a series of related acquisitions thereof;

(6)           Liens existing
immediately prior to the execution and delivery of this Indenture (and listed
on Schedule 3.4 hereto);

(7)           Liens to secure bonds
posted in order to obtain stays of judgments, attachments or orders, the
existence of which bonds would not otherwise constitute an Event of Default;

(8)           Liens on Restricted
Property existing prior to the acquisition of such Restricted Property or the
acquisition of any Subsidiary that is the owner of such Restricted Property or
arising as a result of contractual commitments to grant a Lien relating to such
Restricted Property or such Subsidiary existing prior to such acquisition;

(9)           Liens created by a
Restricted Subsidiary in favor of the Company, the Guarantor or a Subsidiary;

(10)         Liens on any accounts
receivable from or invoices to export customers (including, but not limited to,
Subsidiaries) and the proceeds thereof;

(11)         Liens on rights under
contracts to sell, purchase or receive commodities to or from export customers
(including, but not limited to, Subsidiaries) and the proceeds thereof;

(12)         Liens on cash deposited
as collateral in connection with financings where Liens are permitted under
clause (10) and (11) of this definition;

(13)         Liens extending, renewing
or replacing, in whole or in part Liens permitted pursuant to (i) clauses (1)
through (5) and (7) through (12), so long as the principal amount of the
Indebtedness secured by such Lien does not exceed its original principal amount
and (ii) in the case of clause (6), so long as the principal amount of the
Indebtedness secured by such Lien does

 7
 

not exceed the principal
amount thereof outstanding immediately prior to the execution and delivery of
the Indenture;

(14)         minor survey exceptions
or minor encumbrances, easements or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or zoning or other
restrictions as to the use of real properties that constitute Restricted
Property, which are necessary for the conduct of the activities of the
Guarantor or any Restricted Subsidiary or which customarily exist on properties
of corporations engaged in similar activities and similarly situated and which
do not in any event materially impair their use in the operation of the business
of the Guarantor or any Restricted Subsidiary;

(15)         Liens on accounts
receivable and other related assets arising in connection with transfers
thereof to the extent that such transfers are treated as sales of financial
assets under FASB Statement No. 140, as in effect from time to time; and

(16)         Liens on intercompany
loans made to the Guarantor or its Subsidiaries or on any notes or other
instruments representing an interest in such intercompany loans.

For purposes of
this definition above, (A) the phrases “accounts receivable from or invoices to
export customers” and “contracts to sell, purchase or receive commodities to
(from) export customers” shall refer to invoices or accounts receivable derived
from the sale of, or contracts to sell, purchase or receive wheat, soybeans or
other commodities or products derived from the processing of wheat, soybeans or
other commodities, by or to the Guarantor or a Restricted Subsidiary that have
been or are to be exported from the country of origin whether or not such sale
is made by a Restricted Subsidiary or to any of its Subsidiaries; and (B)
property of a party to a corporate reorganization which is not the Guarantor or
a Restricted Subsidiary shall be deemed to be or have been “acquired” by the
Guarantor or such Restricted Subsidiary as part of such corporate
reorganization even if the Guarantor or such Restricted Subsidiary, as the case
may be, is not the surviving or continuing entity.

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

“Principal Trust Office” means the Corporate Trust Office or
such other trust office or agency as may be designated by the Trustee in
writing to the Company from time to time. The initial Principal Trust Office
shall be the office of the Trustee to which notices are to be sent as set forth
in Section 11.02 hereof.

“Property” means any property, whether presently owned or
hereafter acquired, including any asset, revenue, or right to receive income or
any other property, whether tangible or intangible, real or personal.

“Rating Agencies” means Moody’s and S&P or if Moody’s or
S&P, or both, cease to rate the Notes or fails to make a rating of the
Notes publicly available, a nationally recognized statistical rating agency or
agencies, as the case may be, selected by Bunge Limited which shall be
substituted for Moody’s or S&P, or both of them, as the case may be.

 8
 

“Redemption Date” means, with respect to any redemption of
Notes, the date of redemption with respect thereto.

“Redemption Price” has the meaning ascribed to it under the
section entitled “Optional Redemption by the Company” on the reverse side of
the Notes, the forms of which are attached as Exhibits A and B hereto.

“Reference Treasury Dealer” means [ _____________________ ]
and [ ___________________________ ], and two other primary U.S. government
securities dealers in New York City selected by the Independent Investment
Banker (each, a “Primary Treasury Dealer”); provided, however,
that if any of the foregoing shall cease to be a Primary Treasury Dealer, the
Company will substitute another Primary Treasury Dealer.

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

“Registrar” has the meaning ascribed to it in Section 2.03
hereof.

“Representatives to the Underwriters” means [
_______________________] and [ _________________________ ].

“Restricted Property” means any building, mine, structure or
other facility (together with the land on which it is erected and fixtures
comprising a part thereof) and inventories now owned or hereafter acquired by
the Guarantor or any Subsidiary and used for oilseed or grain origination,
processing, transportation or storage, mining or fertilizer refining or
storage.

“Restricted Subsidiary” means (a) any Subsidiary which is a “significant
subsidiary” under Regulation S-X under the Securities Act, or (b) any other
Subsidiary that owns or leases any Restricted Property the aggregate Fair
Market Value of which, as determined by the Board of Directors of the
Guarantor, exceeds three percent of Consolidated Net Tangible Assets. Notwithstanding
the foregoing, Fertilizantes Fosfatados S.A.-Fosfertil shall not be deemed a
Restricted Subsidiary of the Guarantor for the purpose of the covenants
described under Section 3.02 and Section 3.03.

“Sale-Leaseback Transaction” means the sale or transfer by
the Guarantor or any Restricted Subsidiary of any Restricted Property to a
Person (other than the Guarantor or a Subsidiary) and the taking back by the
Guarantor or any Restricted Subsidiary, as the case may be, of a lease of such
Restricted Property.

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

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

 9
 

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

“Securities Custodian” means the custodian with respect to
the Global Note (as appointed by DTC), or any successor Person thereto and
shall initially be the Trustee.

“Special Interest Payment Date” has the meaning ascribed to
it in Section 2.11 hereof.

“Special Record Date” has the meaning ascribed to it in
Section 2.11 hereof.

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

“Subsequent Issuance Period” shall mean the
period commencing on the date hereof and ending on [ ____________ ].

“Subsequent Notes” has the meaning ascribed to it in the
second introductory paragraph of this Indenture.

“Subsidiary” means any corporation, limited liability company
or other business entity of which the requisite number of shares of stock or
other equity ownership interests having ordinary voting power (without regard
to the occurrence of any contingency) to elect a majority of the directors,
managers or trustees thereof, or any partnership of which more than 50% of the
partners’ equity interests (considering all partners’ equity interests as a
single class) is, in each case, at the time owned or controlled, directly or
indirectly, by a Person, one or more of the Subsidiaries of such Person, or
combination thereof.

“Successor Guarantor” has the meaning ascribed to it in
Section 4.01 hereof.

“Trust Indenture Act” means the U.S. Trust Indenture Act of
1939, as in effect on the date of this Indenture.

“Trust Officer” means, with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant treasurer, trust officer or
any other officer of the Trustee who customarily performs functions similar to
those performed by the individuals who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of such
individual’s knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of this Indenture.

“Trustee” means the party named as such in this Indenture
until a successor replaces it and, thereafter, such successor.

“Underwriters”
means collectively [ __________ ] and [ ___________ ].

“U.S. GAAP” means generally accepted accounting principles in
the United States, as in effect from time to time.

 10
 

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

“Voting Stock” of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of
the Board of Directors of such Person.

Section 1.02.  Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the
Trust Indenture Act which are incorporated by reference in and made a part of
this Indenture. The following Trust Indenture Act terms have the following
meanings:

“Commission” means
the SEC.

“indenture
securities” means the Notes.

“indenture
security holder” means a Noteholder.

“indenture to be
qualified” means this Indenture.

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

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

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

Section 1.03. 
Rules of Construction.  Unless the context otherwise requires:

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

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

(3)           “or”
is not exclusive;

 11
 

(4)           “including”
means including without limitation;

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

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

ARTICLE
2

THE NOTES

Section 2.01. 
Form, Dating and Terms.
(a) The Initial Notes are being offered and sold by the Company pursuant to an Underwriting
Agreement, dated [ _____________ ] among the Company, the Guarantor and
Representatives to the Underwriters.

Initial Notes
offered and sold to the Underwriters will be issued on the Issue Date in the
form of a permanent global Note, without interest coupons, substantially in the
form of Exhibit A hereto, which is hereby incorporated by reference and made a
part of this Indenture, including appropriate legends as set forth in Section
2.01(c) hereof (the “Global Note”),
deposited with the Trustee, as custodian for DTC, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The Global Note may
be represented by more than one certificate, if so required by DTC’s rules
regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Global Note may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for DTC or its nominee, as hereinafter provided.

Except as
described in the succeeding two sentences, the principal of and premium, if
any, and interest on the Notes shall be payable at the office or agency of the
Company maintained for such purpose in The City of New York, or at such other
office or agency of the Company as may be maintained for such purpose pursuant
to Section 2.03 hereof; provided, however, that, at the option of the Company,
each installment of interest may be paid by check mailed to addresses of the
Persons entitled thereto as such addresses shall appear on the Note Register.
Payments in respect of Notes represented by a Global Note (including principal,
premium and interest) will be made by wire transfer of immediately available
funds to the accounts specified by DTC. Payments in respect of Notes
represented by Definitive Notes (including principal, premium, if any, and
interest) held by a Holder of at least U.S.$1,000,000 aggregate principal amount
of Notes represented by Definitive Notes will be made by wire transfer to a
U.S. dollar account maintained by the payee with a bank in the United States if
such Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later
than 15 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).

Any Subsequent Notes shall be in the form of Exhibit A
hereto.

The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage, in addition to those set forth on Exhibit A hereto and in Section
2.01(c) hereof. The Company and the Trustee shall approve the forms of the
Notes and any notation,

 12
 

endorsement
or legend on them. Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibit A hereto are part of the terms of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to be bound by such
terms.

The Notes shall be
subject to repurchase by the Company pursuant to a Change of Control Offer as
provided in Section 3.14 hereof. The Notes shall not be redeemable, other than
as provided in Article V.

(b)           Denominations.  The Notes shall be issuable only in fully
registered form, without coupons, and only in denominations of U.S.$1,000 and
any integral multiple thereof.

(c)           Restrictive Legends.  Each of the Global Notes, whether or not an
Initial Note, shall bear the following legend on the face thereof:

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR 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.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

(d)           Book-Entry Provisions.  (i) This Section 2.01(d) shall apply only to
Global Notes deposited with the Trustee, as custodian for DTC.

(ii)           Each
Global Note initially shall (A) be registered in the name of DTC or the nominee
of DTC, (B) be delivered to the Trustee as custodian for DTC and (C) bear
legends as set forth in Section 2.01(c) hereof.

(iii)          Members
of, or participants in, DTC (“Agent Members”)
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by DTC or by the Trustee as the custodian of DTC or under such
Global Note, and DTC may be treated by the Company, the Trustee and any agent
of the Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the 

 13
 

Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by DTC or impair, as between DTC and its Agent Members,
the operation of customary practices of DTC governing the exercise of the
rights of a Holder of a beneficial interest in any Global Note.

(iv)          In
connection with any transfer of a portion of the beneficial interest in a
Global Note pursuant to Section 2.01(e) hereof to beneficial owners who are
required to hold Definitive Notes, the Securities Custodian shall reflect on
its books and records the date and a decrease in the principal amount of such
Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Definitive Notes of
like tenor and amount.

(v)           In
connection with the transfer of an entire Global Note to beneficial owners
pursuant to Section 2.01(e) hereof, such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
the Trustee shall authenticate and deliver, to each beneficial owner identified
by DTC in exchange for its beneficial interest in such Global Note, an equal
aggregate principal amount of Definitive Notes of authorized denominations.

(vi)          The
registered Holder of a Global Note may grant proxies and otherwise authorize
any person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.

(e)           Definitive Notes.

(i)            Except
as provided below, owners of beneficial interests in Global Notes will not be
entitled to receive Definitive Notes. If required to do so pursuant to any
applicable law or regulation, beneficial owners may obtain Definitive Notes in
exchange for their beneficial interests in a Global Note upon written request
in accordance with DTC’s and the Registrar’s procedures. In addition,
Definitive Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in a Global Note if (a) DTC notifies the Company
that it is unwilling or unable to continue as depositary for such Global Note
or DTC ceases to be a clearing agency registered under the Exchange Act, at a
time when DTC is required to be so registered in order to act as depositary,
and in each case a successor depositary is not appointed by the Company within
90 days of such notice, or (b) the Company executes and delivers to the Trustee
and Registrar an Officer’s Certificate stating that such Global Note shall be
so exchangeable or (c) an Event of Default has occurred and is continuing and
the Registrar has received a request from DTC.

(ii)           Any
Definitive Note delivered in exchange for an interest in a Global Note pursuant
to Section 2.01(d)(iv) or (v) hereof shall, except as otherwise provided by
Section 2.06. hereof bear the applicable legend regarding transfer restrictions
applicable to the Definitive Note set forth in Section 2.01(c) hereof.

 14
 

(iii)          In
connection with the exchange of a portion of a Definitive Note for a beneficial
interest in a Global Note, the Trustee shall cancel such Definitive Note, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
the transferring Holder a new Definitive Note representing the principal amount
not so transferred.

Section 2.02.  Execution and Authentication. One
Officer shall execute the Notes, on behalf of the Company, by manual or
facsimile signature. If an Officer whose signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note, the Note shall be
valid nevertheless, even after giving effect to any exchange of Initial Notes
for Exchange Notes.

A Note shall not be valid until an authorized
signatory of the Trustee manually authenticates the Note. The signature of the
Trustee on a Note shall be conclusive evidence that such Note has been duly and
validly authenticated and issued under this Indenture. A Note shall be dated
the date of its authentication.

The Trustee shall
authenticate and make available for delivery: (1) at any time and from time to
time after the execution and delivery of this Indenture, Initial Notes for
original issue on the Issue Date initially in an aggregate principal amount of
U.S. $[ _______________ ]; and (2) at any time during the Subsequent Issuance
Period, if and when issued, the Subsequent Notes, in each case upon a written
order of the Company signed by two Officers or by an Officer and an Assistant
Treasurer or an Assistant Secretary of the Company (the “Company
Order”). Such Company Order shall specify the amount of the Notes to
be authenticated and the date on which the original issue of Notes is to be
authenticated and whether the Notes are to be Initial Notes or Subsequent
Notes. The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is initially limited to U.S. $[ _______________
] outstanding (plus any Subsequent Notes), except for Notes authenticated and
delivered upon registration or transfer of, or in exchange for, or in lieu of,
other Notes of the same class pursuant to Section 2.06, Section 2.07, Section
2.09, Section 5.08, or Section 9.05 hereof. All Notes issued on the Issue Date
and all Subsequent Notes shall be identical in all respects other than issue
dates, the date from which interest accrues and any changes relating thereto.
Notwithstanding anything to the contrary contained in this Indenture, the
Initial Notes and any Subsequent Notes will be treated as a single class of
securities under this Indenture. Without limiting the generality of the
foregoing sentence, all Notes issued under this Indenture shall vote and
consent together on all matters as one class and no Notes will have the right
to vote or consent as a separate class on any matter. Notwithstanding any
provision to the contrary contained in this Indenture, the Company shall not
issue any Subsequent Notes after to the Subsequent Issuance Period.

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

Section 2.03.  Registrar and Paying Agent. The
Company shall cause to be kept a register for the Notes (the “Note Register”) in which, subject to such
reasonable regulations as the Company may prescribe, the Company shall provide
for the registration of the Notes and of

 15

all transfers and
exchanges with respect thereto. The Note Register shall be maintained by the
Trustee or such other Person (including the Company or the Guarantor) appointed
by the Company as the registrar (the “Registrar”). The
Company shall maintain an office or agency where Notes may be presented for
registration of transfer or for exchange and an office or agency where Notes
may be presented for payment (the “Place of Payment”).
The Company shall cause each of the Registrar and the Paying Agent to maintain
an office or agency in the Borough of Manhattan, The City of New York. The
Company may have one or more co-registrars and one or more additional paying
agents. The term “Paying Agent” includes any additional paying agent.

The Company shall
enter into an appropriate agency agreement with any Registrar and Paying Agent
that is not a party to this Indenture, which shall incorporate the terms of the
Trust Indenture Act. 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 each such agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07 hereof. The
Company, the Guarantor or any Subsidiary of the Company or the Guarantor may
act as Paying Agent, Registrar, co registrar or transfer agent.

The Company
initially appoints DTC to act as depository with respect to the Global Notes. The
Trustee is authorized to enter into a letter of representations with DTC in the
form provided to the Trustee by the Company and to act in accordance with such
letter.

The Company
initially appoints the Trustee as Registrar and Paying Agent for the Notes.

Section 2.04.  Paying
Agent to Hold Money in Trust. By at least 10:00 a.m. (New York City
time) on the date on which any principal of and premium, if any, or interest on
any Note is due and payable, the Company shall deposit with the Paying Agent a
sum sufficient to pay such principal, premium, if any, or interest when due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that such Paying Agent shall hold in trust for the benefit of
Noteholders or the Trustee all money held by such Paying Agent for the payment
of principal of and premium, if any, or interest on the Notes and shall notify
the Trustee in writing of any default by the Company or the Guarantor in making
any such payment. If the Company, the Guarantor or a Subsidiary of the Company
or the Guarantor acts as Paying Agent, it shall segregate the money held by it
as Paying Agent and hold it as a separate trust fund. The Company at any time
may require a Paying Agent (other than the Trustee) to pay all money held by it
to the Trustee and to account for any funds disbursed by such Paying Agent. Upon
complying with this Section 2.04, the Paying Agent (if other than the Company
or a Subsidiary of the Company or the Guarantor) shall have no further
liability for the money delivered to the Trustee. Upon any bankruptcy,
reorganization or similar proceeding with respect to the Company, the Trustee
shall serve as Paying Agent for the Notes.

Section 2.05.  Noteholder
Lists. The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders and shall otherwise comply with Trust Indenture Act, Section
312(a). If the Trustee is not the Registrar, or to the extent otherwise
required under the Trust Indenture Act, the Company, on its own behalf and on
behalf of the Guarantor, shall furnish to the Trustee, in

 16
 

writing at least seven Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Noteholders and the Company shall otherwise comply with Trust
Indenture Act, Section 312(a).

Section 2.06.  Transfer
and Exchange.

(a)           The
Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.01 hereof or this Section 2.06. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable prior written notice to the Registrar.

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

(i)            To permit
registrations of transfers and exchanges, the Company shall, subject to the
other terms and conditions of this Article 2, execute and the Trustee shall
authenticate Definitive Notes and Global Notes at the Registrar’s or
co-registrar’s request.

(ii)           No service charge
shall be made to a Holder for any registration of transfer or exchange, but the
Company or the Guarantor may require from a Holder payment of a sum sufficient
to cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charges payable upon exchange or transfer pursuant to
Section 3.14 and Section 9.05 hereof).

(iii)          The Registrar or
co-registrar shall not be required to register the transfer of, or exchange of,
any Note for a period beginning (1) 15 days before the mailing of a notice of
an offer to repurchase or redeem Notes and ending at the close of business on
the day of such mailing or (2) 15 days before an interest payment date and
ending on such interest payment date.

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

(v)           Any Definitive Note
delivered in exchange for an interest in a Global Note pursuant to Section
2.01(d) hereof shall, except as otherwise provided by Section 2.06(c) hereof,
bear the applicable legend regarding transfer restrictions applicable to the
Definitive Note set forth in Section 2.01(c) hereof.

 17
 

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

(vii)         All Global Notes
shall be registered in the name of DTC, or a nominee thereof, and all transfers
of beneficial ownership interests therein will be made in accordance with the
rules of DTC. No investor or other party purchasing, selling or otherwise
transferring beneficial ownership interests in Global Notes shall receive, hold
or deliver any certificate representing the same. The Company, the Guarantor
and the Trustee shall have no responsibility or liability for transfers of
beneficial ownership interests in any Global Note.

(c)                                  No
Obligation of the Trustee.

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

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

Section 2.07.
Mutilated, Destroyed, Lost or Stolen Notes. If a mutilated Note is
surrendered to the Registrar or if the Holder of a Note claims that the Note
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Note if the requirements of Section
8-405 of the New York Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee,
the Paying 

 18
 

Agent, the Registrar and any co-registrar from any loss which any of
them may suffer if a Note is replaced, and, in the absence of notice to the
Company, the Guarantor or the Trustee that such Note has been acquired by a
bona fide purchaser, the Company shall execute and upon Company Order the
Trustee shall authenticate and make available for delivery, in exchange for any
such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a
new Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen
Note has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Note, pay such Note.

Upon the issuance of any new Note under this Section
2.07, the Company may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) in connection
therewith.

Every new Note issued pursuant to this Section 2.07 in
lieu of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Company, the Guarantor (if
applicable) and any other obligor upon the Notes, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.

The provisions of this Section 2.07 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.

Section 2.08.  Outstanding
Notes.  Notes outstanding at
any time are all Notes authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section 2.08 as not outstanding. A Note ceases to be outstanding in the event
the Company holds the Note, provided, however, that (i) for purposes of
determining which are outstanding for consent or voting purposes hereunder,
Notes shall cease to be outstanding in the event the Company or an Affiliate of
the Company holds the Note and (ii) in determining whether the Trustee shall be
protected in making a determination whether the Holders of the requisite
principal amount of outstanding Notes are present at a meeting of Holders of
Notes for quorum purposes or have consented to or voted in favor of any
request, demand, authorization, direction, notice, consent, waiver, amendment
or modification hereunder, or relying upon any such quorum, consent or vote,
only Notes which a Trust Officer of the Trustee actually knows to be held by
the Company or an Affiliate of the Company shall not be considered outstanding.

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

If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal, premium, if any, and

 19
 

interest payable on that
date with respect to the Notes (or portions thereof) to be redeemed or
maturing, as the case may be, and the Paying Agent is not prohibited from
paying such money to the Noteholders on that date pursuant to the terms of this
Indenture, then on and after that date such Notes (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.

Section 2.09.  Temporary
Notes.  Until Definitive Notes
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be substantially in the
form of Definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Definitive Notes. After the
preparation of Definitive Notes, the temporary Notes shall be exchangeable for
Definitive Notes upon surrender of the temporary Notes at any office or agency
maintained by the Company for that purpose and such exchange shall be without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Company shall execute, and the Trustee shall authenticate
and make available for delivery in exchange therefor, one or more Definitive
Notes representing an equal principal amount of Notes. Until so exchanged, the
Holder of temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as a holder of Definitive Notes.

Section 2.10.  Cancellation.  The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee, and no one else, shall cancel and
destroy all Notes surrendered for registration of transfer, exchange, payment
or cancellation, in its customary manner. The Company may not issue new Notes
to replace Notes it has paid or delivered to the Trustee for cancellation for
any reason other than in connection with a transfer or exchange.

Section 2.11.  Payment of
Interest; Defaulted Interest.  Interest
on any Note which is payable, and is punctually paid or duly provided for, on
any interest payment date shall be paid to the Person in whose name such Note
(or one or more predecessor Notes) is registered at the close of business on
the regular record date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 2.03 hereof.

Any interest on any Note which is payable, but is not
paid when the same becomes due and payable and such nonpayment continues for a
period of 30 days shall forthwith cease to be payable to the Holder on the
regular record date by virtue of having been such Holder, and such defaulted
interest and (to the extent lawful) interest on such defaulted interest at the
rate borne by the Notes (such defaulted interest and interest thereon herein
collectively called “Defaulted Interest”)
shall be paid by the Company, at its election in each case, as provided in
clause (a) or (b) below:

(a)           The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Notes (or their respective predecessor Notes) are registered at
the close of business on a Special Record Date (as defined below) for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Note and the date (not less than
30 days after such notice) of the proposed payment (the “Special Interest Payment Date”), and at the
same time the Company shall deposit with the Trustee an amount of money

 20
 

equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a record
date (the “Special Record Date”)
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the Special Interest Payment Date and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such Special
Record Date, and in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor to be given in the
manner provided for in Section 11.02 hereof, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date therefor
having been so given, such Defaulted Interest shall be paid on the Special
Interest Payment Date to the Persons in whose names the Notes (or their
respective predecessor Notes) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following
clause (b).

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

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

Section 2.12.  Computation
of Interest.  Interest on the
Notes shall be computed on the basis of a 360-day year of twelve 30-day months.

Section 2.13.  CUSIP and
ISIN Numbers.  The Company in
issuing the Notes may use “CUSIP” and “ISIN” numbers (if then generally in use)
and, if so, the Trustee shall use “CUSIP” and “ISIN” numbers in notices of
redemption as a convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such CUSIP or ISIN numbers. The Company shall promptly notify the
Trustee of any change in the CUSIP and ISIN numbers.

ARTICLE
3

COVENANTS

Section 3.01.  Payment of
Notes.  The Company shall
promptly pay the principal of and premium, if any, and interest on the Notes on
the dates and in the manner provided in the Notes and in this Indenture. Principal
and interest shall be considered paid on the date due if on such

 21
 

date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Noteholders on that date.

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

Notwithstanding anything to the contrary contained in
this Indenture and subject to Section 10.04, the Company may, to the extent it
is required to do so by law, deduct or withhold income or other similar taxes
imposed by the United States of America (or any political subdivision thereof)
from principal or interest payments hereunder.

Section 3.02.  Limitation
on Liens.  The Guarantor shall
not, and shall not permit any Restricted Subsidiary to, create, assume, incur
or suffer to exist any Lien, other than a Permitted Lien, upon or with respect
to any of its Restricted Property or the shares of stock or Indebtedness of any
Restricted Subsidiary to secure any Indebtedness incurred or guaranteed by the
Guarantor or any Restricted Subsidiary (other than the Notes), unless all of
the outstanding Notes and the Guarantee are secured equally and ratably with,
or prior to, such Indebtedness for so long as such Indebtedness shall be so
secured.

Section 3.03.  Limitation
on Sale-Leaseback Transactions.  The Guarantor shall not, and shall not permit
any Restricted Subsidiary to, enter into any Sale-Leaseback Transaction unless:

(a)           the
Sale-Leaseback Transaction occurs within six months from the date of the
acquisition of the Restricted Property subject thereto or the date of the
completion of construction or commencement of full operations of such
Restricted Property, whichever is later; or

(b)           the
Sale-Leaseback Transaction is between the Guarantor and a Restricted Subsidiary
of the Guarantor, or between Restricted Subsidiaries of the Guarantor; or

(c)           the
Sale-Leaseback Transaction involves a lease for a period, including renewals,
of not more than three years; or

(d)           the
Sale-Leaseback Transaction constitutes a Permitted Lien for the purposes of
Section 3.02 hereof; or

(e)           the
Guarantor or such Restricted Subsidiary, within a one year period after such
Sale-Leaseback Transaction, (i) applies or causes to be applied an amount not
less than the Attributable Indebtedness from such Sale-Leaseback Transaction to
the prepayment, repayment, redemption, reduction or retirement of any
Indebtedness of the Guarantor or any Subsidiary having a maturity of more than
one year that is not subordinated to the Notes or the Guarantee or (ii) enters
into a bona fide commitment to expend an amount not less than the Attributable
Indebtedness for such Sale-Leaseback Transaction during such one-year period to
the acquisition, construction or development of other similar Property.

Section 3.04.  Exclusion
from Limitations.  Notwithstanding
Sections 3.02 and 3.03

 22
 

hereof, the Guarantor may, and may permit any Restricted Subsidiary to,
create, assume, incur or suffer to exist any Lien (other than a Permitted Lien)
upon any Restricted Property to secure Indebtedness incurred or guaranteed by
the Guarantor or any Restricted Subsidiary (other than the Notes) or effect any
Sale-Leaseback Transaction of a Restricted Property that is not excepted by
Section 3.03(a), (b), (c), (d) or (e) hereof, without equally and ratably
securing the Notes or the Guarantee provided that, after giving effect thereto,
the aggregate principal amount of outstanding Indebtedness (other than the
Notes) secured by Liens (other than Permitted Liens) upon Restricted Property plus
the Attributable Indebtedness from Sale-Leaseback Transactions of Restricted
Property not so excepted, do not exceed 15% of the Consolidated Net Tangible
Assets.

Section 3.05.  Maintenance
of Office or Agency.  The
Company will maintain in The City of New York, an office or agency where the
Notes may be presented or surrendered for payment, where, if applicable, the
Notes may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The office or agency (the “Corporate Trust Office”) used by the Trustee in The City of
New York as its office or agency for receiving securities, as the same may from
time to time be designated by the Trustee, shall be such office or agency of
the Company, unless the Company shall designate and maintain some other office
or agency for one or more of such purposes. The Company will give prompt
written notice to the Trustee of any change in the location of any such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency 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, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.

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

Section 3.06.  Corporate
Existence.  Subject to Article
4 hereof, each of the Company and the Guarantor will do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
corporate or partnership existence and take all reasonable action to maintain
its corporate or partnership rights (charter and statutory), licenses,
privileges and franchises; provided, however, that the Company and the
Guarantor shall not be required to preserve any such right, license, privilege
or franchise if the General Partners of the Company or the Board of Directors
of the Guarantor, as applicable, shall determine that the preservation thereof
is no longer desirable in the conduct of its business and that the loss thereof
is not, and will not be, disadvantageous in any material respect to the
Holders; and provided further, the Guarantor may amalgamate or merge in
accordance with Section 4.01 hereof.

Section 3.07.  Maintenance
of Properties; Insurance.  The
Guarantor shall, and shall cause each of its Subsidiaries to, keep all property
useful and necessary in its business in good

 23
 

working order and condition, except where failure to do so would not
have a Material Adverse Effect; and the Guarantor shall maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks as are
customary for the Guarantor’s type of business.

Section 3.08.  Payment of
Taxes and Other Claims.  Each
of the Company and the Guarantor shall pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all
federal income and other material taxes, assessments and similar governmental
charges imposed on it, except where (i) the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
to the extent required by U.S. GAAP with respect thereto have been provided on
the books of the Company or the Guarantor or (ii) the nonpayment of such
federal income and other material taxes, assessments and claims in the
aggregate could not reasonably be expected to have a Material Adverse Effect.

Section 3.09.  Payments
for Consent.  Neither the
Company, the Guarantor nor any Subsidiaries of the Company or the Guarantor
will, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fees or otherwise, to any Holder of any Notes for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is offered
to be paid or is paid to all Holders of the Notes that consent, waive or agree
to amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.

Section 3.10.  Compliance
Certificate.  The Company and
the Guarantor shall deliver to the Trustee within 120 days after the end of
each Fiscal Year of the Company and the Guarantor a certificate signed by the
principal executive officer, principal financial officer or principal
accounting officer of the Company and the Guarantor, respectively, stating that
in the course of the performance by the signer of his or her duties as an
officer of the Company and the Guarantor he or she would normally have
knowledge of any Default or Event of Default and whether or not the signer
knows of any Default or Event of Default that occurred during such period. If
he or she does, the certificate shall describe the Default or Event of Default,
its status and what action the Company is taking or proposes to take with
respect thereto. The Company also shall comply with Trust Indenture Act,
Section 314(a)(4).

Section 3.11.  Further
Instruments and Acts.  Upon
request of the Trustee, the Company will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.

Section 3.12.  Statement
by Officers as to Default.  The
Company shall deliver to the Trustee, as soon as possible and in any event
within 10 days after the Company becomes aware of the occurrence of any Event
of Default or an event which, with notice or the lapse of time or both, would
constitute an Event of Default, an Officer’s Certificate setting forth the
details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.

Section 3.13.  Notice of
Change in Bermuda Law, Debt Ratings.  The Guarantor shall give notice to the Trustee
promptly after becoming aware of (i) any changes in taxes, duties or

 24
 

other fees of Bermuda or any political subdivision or taxing authority
thereof or any change in any laws of Bermuda, in each case, that may affect any
payment due under this Indenture, (ii) any change in such Guarantor’s public or
private debt ratings by a “nationally recognized statistical rating
organization,” as such term is defined by the SEC for purposes of Rule
436(g)(2) under the Securities Act, and (iii) any development or event which
has had, or which the Guarantor in its good faith judgment believes will have,
a Material Adverse Effect; provided that the Trustee shall have no
responsibilities or duties with respect to any such notice. Delivery of any
such notice to the Trustee is for informational purposes only and the Trustee’s
receipt of such notice shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officer’s
Certificates).

Section 3.14.  Offer to
Repurchase Upon Change of Control.  (a) If a Change of Control Triggering Event
occurs, unless the Company has previously or concurrently irrevocably exercised
its right to redeem all the outstanding Notes as described under Section 5.05
hereof, without such redemption being subject to any conditions precedent, the
Company shall make an offer to purchase all of the Notes pursuant to the offer
described below (the “Change of Control Offer”)
at a price in cash (the “Change of Control
Payment”) equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase, subject to
the right of Holders of the Notes of record on the relevant record date to
receive interest due on the relevant interest payment date. Within 60 days
following any Change of Control Triggering Event, the Company shall send notice
of such Change of Control Offer by first-class mail, with a copy to the
Trustee, to each Holder of Notes to the address of such Holder appearing in the
security register or otherwise in accordance with the procedures of DTC with a
copy to the Trustee, with the following information:

(i)            that a Change of
Control Offer is being made pursuant to this Section 3.14 and that all Notes
properly tendered pursuant to such Change of Control Offer will be accepted for
payment by the Company;

(ii)           the date of the
Change of Control Triggering Event;

(iii)          the date, which
will be no earlier than 30 days nor later than 60 days from the date such
notice is mailed, by which the Company must purchase the Notes (the “Change of Control Payment Date”);

(iv)          the price that the Company
must pay for the Notes it is obligated to purchase;

(v)           the name and address
of the Trustee;

(vi)          that any Note not
properly tendered will remain outstanding and continue to accrue interest;

(vii)         that unless the
Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest on the Change of Control Payment Date;

 25
 

(viii)        that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender such Notes, with the form entitled “Option of Holder
to Elect Purchase” on the reverse of such Notes completed, to the paying agent
specified in the notice 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;

(ix)           that Holders shall
be entitled to withdraw their tendered Notes and their election to require the
Company to purchase such Notes; provided that the paying agent receives, not
later than the close of business on the 30th day following the date of the
Change of Control notice, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder of the Notes, the principal amount of
Notes tendered for purchase, and a statement that such Holder is withdrawing
its tendered Notes and its election to have such Notes purchased;

(x)            that if the Company
is repurchasing less than all of the Notes, the Holders of the remaining Notes
will be issued new Notes and such new Notes will be equal in principal amount
to the unpurchased portion of the Notes surrendered. The unpurchased portion of
the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess
thereof; and

(xi)           the other
instructions, as determined by the Company, consistent with this Section 3.14,
that a Holder must follow.

The notice, if mailed in a manner herein provided,
shall be conclusively presumed to have been given, whether or not the Holder
receives such notice. If (a) the notice is mailed in a manner herein provided
and (b) any Holder fails to receive such notice or a Holder receives such
notice but it is defective, such Holder’s failure to receive such notice or
such defect shall not affect the validity of the proceedings for the purchase
of the Notes as to all other Holders that properly received such notice
with-out defect. The Company shall comply with all federal and state securities
laws, including, specifically, Rule 13e-4, if applicable, under the Exchange
Act, and any related Schedule 13E-4 required to be submitted under that rule,
to the extent such laws or regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 3.14, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 3.14 by virtue thereof.

(b)           On
the Change of Control Payment Date, the Company shall, to the extent permitted
by law,

(i)            accept for payment
all Notes issued by it or portions thereof properly tendered pursuant to the
Change of Control Offer,

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

 26
 

(iii)          deliver, or cause
to be delivered, to the Trustee for cancellation the Notes so accepted together
with an Officer’s Certificate to the Trustee stating that such Notes or
portions thereof have been tendered to, and purchased by, the Company.

(c)           The
Company shall not be required to make a Change of Control Offer following a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in this Section 3.14 applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer. Notwithstanding anything to the contrary herein, 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 of the Change of Control Offer.

(d)           Other
than as specifically provided in this Section 3.14, any purchase pursuant to
this Section 3.14 shall be made pursuant to the provisions of Section 5.04,
5.06 and 5.08 hereof.

(e)           Notwithstanding
any provision to the contrary in this Indenture, the Company shall not purchase
any Notes if there has occurred and is continuing an Event of Default, unless
such Event of Default results from the Company’s failure to pay the Change of
Control Payment following the occurrence of a Change of Control Triggering
Event.

ARTICLE
4

SUCCESSOR GUARANTOR OR ISSUER

Section 4.01.  Consolidation,
Merger, Amalgamation and Sale of Assets by the Guarantor or the Company.
The Guarantor shall not, and shall not cause or permit any Subsidiary to,
consolidate with or merge or amalgamate with or into, or sell, lease, or convey
all or substantially all its assets to, any Person, unless:

(a)           in
the case of the Guarantor:

(i)            the continuing,
resulting, surviving or transferee Person (the “Successor Guarantor”) shall be either the Guarantor or a
Person organized under the laws of Bermuda, the United States of America, any
State thereof or the District of Columbia, any full member state of the
European Union, Canada, Australia or Switzerland, and the Successor Guarantor
(if not the Guarantor) shall expressly assume, by supplemental indenture,
executed and delivered to the Trustee, all the obligations of the Guarantor
under the Guarantee and this Indenture; and

(ii)           immediately after
giving effect to such transaction, no Event of Default or event which with
notice or lapse of time would be an Event of Default has occurred and is
continuing; or

(b)           in
the case of the Company:

(i)            the continuing, resulting,
surviving or transferee Person (the “Successor
Issuer”) shall be either the Company or a direct or indirect
Subsidiary of Bunge Limited (or any successor or continuing company of Bunge
Limited) organized under the laws of

 27
 

Bermuda, the
United States of America, any State thereof or the District of Columbia, any
full member state of the European Union, Canada, Australia or Switzerland, and
the Successor Issuer (if not the Company) shall expressly assume, by
supplemental indenture, executed and delivered to the Trustee, all the
obligations of the Company under this Indenture; and

(ii)           immediately after
giving effect to such transaction, no Event of Default or event which with
notice or lapse of time would be an Event of Default has occurred and is
continuing; or

(c)           in
the case of any Subsidiary of the Guarantor (other than the Company):

(i)            such transaction is
a merger or amalgamation of such Subsidiary with or into, or a consolidation of
such Subsidiary with, the Guarantor (so long as the Guarantor is the surviving,
continuing or resulting entity) or another Subsidiary of the Guarantor or the
sale or other disposition by such Subsidiary of all or substantially all of its
property to the Guarantor or another Subsidiary of the Guarantor; or

(ii)           such transaction is
the merger or amalgamation of such Subsidiary with or into, the consolidation
of such Subsidiary with, or the sale or other disposition by such Subsidiary of
all or substantially all of its property to, another Person (provided that such
Person is not an Affiliate of such Subsidiary), so long as immediately prior
to, and after giving effect to such transaction, no Default or Event of Default
exists or would exist.

For purposes of
this Section 4.01, the sale, lease, conveyance, assignment, transfer, or other
disposition of all or substantially all of the properties and assets of one or
more Subsidiaries of the Guarantor, which properties and assets, if held by the
Guarantor instead of such Subsidiaries, would constitute all or substantially
all of the properties and assets of the Guarantor on a consolidated basis,
shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Guarantor.

If the Company or
the Guarantor engages in one of the transactions described above and complies
with the conditions listed above, the Successor Issuer or the Successor
Guarantor, as the case may be, will succeed to, and be substituted for, and may
exercise every right and power of, the Company or the Guarantor, as the case
may be, under this Indenture, but, in the case of a lease of all or
substantially all its assets, the Company or the Guarantor, as the case may be,
will not be released from the obligation to pay the principal of and premium,
if any, and interest on the Notes.

In the event that
the Company or the Guarantor consolidates with or merges or amalgamates with or
into, or sells, leases or conveys all or substantially all of its assets to,
another Person subject to the terms of this Section 4.01 (a “Transfer”) and the Successor Issuer or the Successor Guarantor,
as the case may be, is a Person organized under the laws of a member state of
the European Union, Canada, Australia or Switzerland, the Company and the
Successor Issuer or the Guarantor and the Successor Guarantor, as the case may
be, shall, as a condition to such Transfer, (A) enter into a supplemental
indenture with the Trustee providing for full, unconditional and irrevocable
indemnification of the Holders of the Notes and the Trustee against any tax or
duty of whatever

 28
 

nature
(other than a net income tax) which is incurred or otherwise suffered by such
Holders and the Trustee with respect to the Notes and which would not have been
incurred or otherwise suffered in the absence of such Transfer; and (B) deliver
to the Trustee, for the benefit of the Holders of the Notes, legal opinions of
independent legal counsel in New York and the applicable member state of the
European Union, Canada, Australia or Switzerland the laws of which the
successor or continuing company is organized under, as applicable, to the
effect that the Obligations of the Successor Issuer with respect to this
Indenture or the Successor Guarantor with respect to the Guarantee, as the case
may be, are legal, valid, binding and enforceable in accordance with their
terms.

ARTICLE
5

OPTIONAL REDEMPTION OF NOTES

Section 5.01.  Optional Redemption
by the Company.  The Notes may
be redeemed at any time as a whole or from time to time in part, subject to the
conditions and at the Redemption Prices specified in the form of Notes set
forth in Exhibit A hereto, which are hereby incorporated by reference and made
a part of this Indenture, together with accrued and unpaid interest to the
Redemption Date.

Section 5.02.  Applicability
of Article.  Redemption of
Notes at the election of the Company or otherwise, as permitted or required by
any provision of this Indenture, shall be made in accordance with such
provision and this Article 5.

Section 5.03.  Election to
Redeem; Notice to Trustee.  The election of the Company to redeem
any Notes pursuant to Section 5.01 hereof shall be evidenced by a resolution of
the General Partners of the Company. In case of any redemption at the election
of the Company, the Company shall, upon not later than the earlier of the date
that is 30 days prior to the Redemption Date fixed by the Company or the date
on which notice is given to the Holders (except as provided in Section 5.05
hereof or unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of Notes to be
redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Notes to be redeemed pursuant to Section
5.04 hereof.

Section 5.04.  Selection
by Trustee of Notes to Be Redeemed.  If less than all the Notes are to be redeemed
at any time pursuant to an optional redemption, the particular Notes to be
redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the outstanding Notes not previously called for
redemption, in compliance with the requirements of the principal securities
exchange, if any, on which such Notes are listed, or, if such Notes are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions of the principal of the Notes; provided, however, that
no such partial redemption shall reduce the portion of the principal amount of
a Note not redeemed to less than U.S. $1,000.

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

 29
 

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

Section 5.05.  Notice of
Redemption.  Notice of
redemption shall be given in the manner provided for in Section 11.02 hereof
not less than 30 nor more than 60 days prior to the Redemption Date, to each
Holder of Notes to be redeemed. The Trustee shall give notice of redemption in
the Company’s name and at the Company’s expense; provided, however, that the
Company shall deliver to the Trustee, at least 15 days prior to the date the
notice of redemption is to be given (unless a shorter period shall be
acceptable to the Trustee), an Officer’s Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such notice
as provided in the following items.

All notices of redemption shall state:

(1)           the
Redemption Date,

(2)           the Redemption Price and the amount
of accrued interest to the Redemption Date payable as provided in Section 5.07
hereof, if any,

(3)           if less than all outstanding Notes
are to be redeemed, the identification of the particular Notes (or portion
thereof) to be redeemed, as well as the aggregate principal amount of Notes to
be redeemed and the aggregate principal amount of Notes to be outstanding after
such partial redemption,

(4)           in case any Note is to be redeemed in
part only, the notice which relates to such Note shall state that on and after
the Redemption Date, upon surrender of such Note, the Holder will receive,
without charge, a new Note or Notes of authorized denominations for the
principal amount thereof remaining unredeemed,

(5)           that on the Redemption Date the
Redemption Price (and accrued interest, if any, to the Redemption Date payable
as provided in Section 5.07 hereof) will become due and payable upon each such
Note, or the portion thereof, to be redeemed, and, unless the Company defaults
in making the redemption payment, that interest on Notes called for redemption
(or the portion thereof) will cease to accrue on and after said date,

(6)           the place or places where such Notes
are to be surrendered for payment of the Redemption Price and accrued interest,
if any,

(7)           the name and address of the Paying
Agent,

(8)           that Notes called for redemption must
be surrendered to the Paying Agent to collect the Redemption Price, and

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

 30

Section
5.06.  Deposit of Redemption Price.  Prior
to any Redemption Date, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 2.04 hereof) an amount of money
sufficient to pay the Redemption Price of, and accrued interest on, all the
Notes which are to be redeemed on that date.

Section 5.07.  Notes Payable on Redemption
Date.  Notice of redemption having been given as
aforesaid, the Notes to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified (together with accrued
interest, if any, to the Redemption Date), and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Notes shall cease to bear interest.  Upon surrender of any such Note for
redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with accrued interest, if any, to the
Redemption Date (subject to the rights of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).

If any
Note called for redemption shall not be so paid upon surrender thereof for redemption,
the principal and premium, if any, shall, until paid, bear interest from the
Redemption Date at the rate borne by the Notes.

Section 5.08.  Notes Redeemed in Part.  Any Note which is
to be redeemed only in part (pursuant to the provisions of this Article 5)
shall be surrendered at the office or agency of the Company maintained for such
purpose pursuant to Section 3.05 hereof (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and make available for
delivery to the Holder of such Note at the expense of the Company, a new Note
or Notes, of any authorized denomination as requested by such Holder, in an
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Note so surrendered, provided that each such new Note
will be in a principal amount of U.S.$1,000 or integral multiple thereof.  Notwithstanding the foregoing, DTC shall
select the Notes for redemption if evidenced by a Global Note according to
DTC’s stated procedures therefor.

ARTICLE 6

Defaults and Remedies

Section 6.01.  Events of Default.  An “Event
of Default” occurs if:

(1)           the Company defaults in
any payment of interest on any Note when the same becomes due and payable, and
such default continues for a period of 30 days;

(2)           the Company defaults in
the payment of the principal or premium, if any, on any Note when the same
becomes due and payable at its Stated Maturity, upon optional redemption, upon
declaration of acceleration or otherwise;

(3)           the Company or the
Guarantor defaults in the performance of or a breach by the Company or the
Guarantor of any other covenant or agreement in this Indenture or under the 

 31
 

Notes (other than
those referred to in (1) or (2) above) and such default continues for 60 days
after written notice from the Trustee or the Holders of at least 25% in
principal amount of the outstanding Notes;

(4)           the Company, the
Guarantor or any Subsidiary shall (i) default in making any payment of any
principal of any indebtedness for borrowed money, including obligations evidenced
by any mortgage, indenture, bond, debenture, note, guarantee or other similar
instruments to which it is a party on the scheduled or original due date with
respect thereto; or (ii) default in making any payment of any interest on any
such indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such indebtedness was created; or (iii)
default in the observance or performance of any other agreement or condition
relating to any such indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, the effect of which default or
condition is to cause, or to permit the holder or beneficiary of such
indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such indebtedness to become due
prior to its stated maturity or (in the case of any such indebtedness
constituting a guarantee) to become payable and such acceleration has not been
cured within 15 days after notice of acceleration; provided, that a default,
event or condition described in clause (i), (ii) or (iii) of this paragraph (4)
shall not at any time constitute an Event of Default unless, at such time, one
or more defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (4) shall have occurred and be continuing with
respect to such indebtedness in an amount exceeding U.S. $50,000,000;

(5)           (i) the Company, the
Guarantor or any Material Subsidiary shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Company, the Guarantor or
any Material Subsidiary shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Company, the Guarantor
or any Material Subsidiary any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Company, the Guarantor or any Material Subsidiary any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Company, the Guarantor or any Material
Subsidiary shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Company, the Guarantor or any Material
Subsidiary shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due.

 32
 

The
foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.

The
Company shall deliver to the Trustee, within 10 days after the occurrence
thereof, written notice in the form of an Officer’s Certificate of any Default
or Event of Default under clauses (3), (4) or (5) of this Section 6.01, which
such notice shall contain the status thereof and a description of the action being
taken or proposed to be taken by the Company in respect thereof.

Section 6.02.  Acceleration.  If an Event of
Default occurs and is continuing, the Trustee by written notice to the Company,
or the Holders of at least 25% in outstanding principal amount of the Notes by
written notice to the Company and the Trustee, may, and the Trustee at the
request of such Holders shall, declare the principal of and premium, if any,
and accrued and unpaid interest on all the Notes to be due and payable.  Upon such a declaration, such principal,
premium, if any, and accrued and unpaid interest shall be immediately due and
payable.  If an Event of Default
described in paragraph (5) of Section 6.01 hereof occurs and is continuing, then
in each and every such case, the principal amount of the Notes, the premium, if
any, and all accrued and unpaid interest shall be immediately due and payable
without any declaration or other act on the part of the Trustee or the Holders.

Section 6.03.  Other Remedies.  If an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal of and premium, if any, or interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.

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

Section 6.04.  Waiver of Past Defaults.  The Holders of a
majority in principal amount of the outstanding Notes by notice to the Trustee
may (a) waive, by their consent (including, without limitation consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), an existing Default or Event of Default and its consequences
except (i) a Default or Event of Default in the payment of the principal of and
premium, if any, or interest on a Note or (ii) a Default or Event of Default in
respect of a provision that under Section 9.02 hereof cannot be amended without
the consent of each Noteholder affected and (b) rescind any such acceleration
with respect to the Notes and its consequences if (1) rescission would not
conflict with any judgment or decree of a court of competent jurisdiction and
(2) all existing Events of Default, other than the nonpayment of the principal
of and premium, if any, and interest on the Notes that have become due solely
by such declaration of acceleration, have been cured or waived.  When a Default or Event of Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any consequent right.

 33
 

Section 6.05.  Control by Majority.  The Holders of a
majority in principal amount of the outstanding Notes may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.01
and Section 7.02 hereof, that the Trustee determines is prejudicial to the
rights of other Noteholders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction.  Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.

Section 6.06.  Limitation on Suits.  Subject to Section 6.07 hereof, a Noteholder
may not pursue any remedy with respect to this Indenture or the Notes unless:

(1)           the Holder gives to the
Trustee written notice stating that an Event of Default is continuing;

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

(3)           such Holder or Holders
offer to the Trustee reasonable security or indemnity satisfactory to the
Trustee against any loss, liability or expense;

(4)           the Trustee does not
comply with the request within 60 days after receipt of the request and the
offer of security or indemnity; and

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

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

Section 6.07.  Rights of Holders to
Receive Payment.  Notwithstanding any other provision of this
Indenture (including, without limitation, Section 6.06 hereof), the right of
any Holder to receive payment of principal of and  premium, if any, or interest on the Notes
held by such Holder, on or after the respective due dates expressed in the
Notes (including in connection with a Change of Control Offer), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.

Section 6.08.  Collection Suit by Trustee.  If an Event of
Default specified in Section 6.01 (1) or (2) hereof occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount then due and owing (together
with interest on any unpaid interest to the extent lawful) and the amounts
provided for in Section 6.07 hereof.

Section 6.09.  Trustee May File Proofs of
Claim.  The Trustee may file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the 

 34
 

claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relative to the Company, the
Guarantor, any of the Subsidiaries or their respective creditors or properties
and, unless prohibited by law or applicable regulations, may be entitled and
empowered to participate as a member of any official committee of creditors
appointed in such matter and, may vote on behalf of the Holders in any election
of a trustee in bankruptcy or other Person performing similar functions, and
any custodian in any such judicial proceeding is hereby authorized by each
Holder to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07 hereof.

Section 6.10.  Priorities.  If the Trustee
collects any money or property pursuant to this Article 6, it shall pay out the
money or property in the following order:

FIRST:  to the Trustee for amounts due under Section
7.07 hereof;

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

THIRD:  to the Company.

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

Section 6.11.  Undertaking for Costs.   In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys’ fees and expenses, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. 
This Section 6.11 does not apply to a suit by the Trustee, a suit by the
Company, a suit by a Holder pursuant to Section 6.07 hereof or a suit by
Holders of more than 10% in outstanding principal amount of the Notes.

ARTICLE 7

TRUSTEE

Section 7.01.  Duties of Trustee.  (a) If an Event of
Default has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person’s own affairs; provided that if an
Event of Default occurs and is continuing, the Trustee will be under no
obligation to exercise any of the rights or powers under this Indenture at the
request or direction of any of the Holders unless such 

 35
 

Holders
have offered to the Trustee indemnity or security reasonably satisfactory to it
against loss, liability or expense.

Except
during the continuance of an Event of Default:

(1)           the Trustee undertakes
to perform such duties and only such duties as are specifically set forth in
this Indenture and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and

(2)           in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture.  However,
in the case of any such certificates or opinions which by any provisions hereof
are specifically required to be furnished to the Trustee, the Trustee shall
examine such certificates and opinions to determine whether or not they conform
to the requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).

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

(1)           this paragraph does not
limit the effect of the second paragraph of Section 7.01(a);

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

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

(c)           Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs Section 7.01(a) and (b)
hereof.

(d)           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.

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

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

(g)           Every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section 8.01 and to the
provisions of the Trust Indenture Act.

 36
 

(h)           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.

(i)            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
offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses (including reasonable attorneys’ fees and expenses)
and liabilities that might be incurred by it in compliance with such request or
direction.

Section 7.02.  Rights of Trustee.  Subject to Section 7.01 hereof:

(a)           The Trustee may conclusively rely on any
document (whether in its original or facsimile form) reasonably 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.  The
Trustee shall receive and retain financial reports and statements of the
Company as provided herein, but shall have no duty to review or analyze such
reports or statements to determine compliance under covenants or other
obligations of the Company;

(b)           Before the Trustee acts or refrains from
acting, it may require an Officer’s Certificate and/or an Opinion of
Counsel.  The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on an
Officer’s Certificate or Opinion of Counsel;

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

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

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

(f)            The Trustee shall not be deemed to have
notice of any Default or Event of Default unless a Trust Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact such a default is received by the Trustee at the Principal Trust Office of
the Trustee, and such notice references the Notes and this Indenture;

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

(h)           The Trustee may request that the Company
deliver an Officer’s Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant
to this Indenture, which Officer’s Certificate may be signed by any person 

 37
 

authorized to sign an
Officer’s Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

(i)            The Trustee is not required to give any bond
or surety with respect to the performance of its duties or the exercise of its
powers under this Indenture.

(j)            The Trustee’s rights, powers, indemnities,
immunities and protections from liability and its rights to compensation and
indemnification in connection with the performance of its duties under this
Indenture shall extend to (1) the Trustee, whether serving in any other
capacity hereunder, including without limitation, in the capacity of Paying
Agent or Registrar and (2) the Trustee’s officers, directors, agents, counsel
and employees.  Such immunities and
protections and rights to indemnification, together with the Trustee’s right to
compensation, shall survive the Trustee’s resignation or removal, the discharge
of this Indenture and final payment of the Notes.

(k)           The Trustee shall have no responsibility for
any information in any offering document or other disclosure material distributed
with respect to any series of Notes, and the Trustee shall have no
responsibility for compliance with any state or federal securities laws in
connection with the Notes, other than the filing of any documents required to
be filed by an indenture trustee pursuant to the Trust Indenture Act or
otherwise required in the Indenture.

(l)            Notwithstanding anything else herein
contained, whenever any provision of this Indenture indicates that any
confirmation of a condition or event is qualified by the words “to the
knowledge of” or “known to” the Trustee or other words of similar meaning, said
words shall mean and refer to the current awareness of one or more Trust
Officers who are located at the Principal Trust Office of the Trustee or who
are otherwise responsible for administering the trusts created under this
Indenture

Section 7.03.  Individual Rights of
Trustee.  The Trustee in its individual
or any other capacity may become the owner or pledgee of Notes and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.  Any Paying
Agent, Registrar, co-registrar or co-paying agent may do the same with like
rights.  However, the Trustee must comply
with Section 7.10 and Section 7.11 hereof. 
In addition, the Trustee shall be permitted to engage in transactions
with the Company; provided, however, that if the Trustee acquires any
conflicting interest the Trustee must (i) eliminate such conflict within 90
days of acquiring such conflicting interest, (ii) apply to the Commission for
permission to continue acting as Trustee or (iii) resign.

Section 7.04.  Trustee’s Disclaimer.  The Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, shall not be accountable for the
Company’s use of the proceeds from the Notes, shall not be responsible for the
use or application of any money received by any Paying Agent other than the
Trustee and shall not be responsible for any statement of the Company in this
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Trustee’s certificate of authentication.

Section 7.05.  Notice of Defaults.  If a Default or
Event of Default occurs and is 

 38
 

continuing and if a Trust Officer has actual
knowledge thereof, the Trustee shall mail to each Noteholder at the address set
forth in the Note Register notice of the Default or Event of Default within 90
days after it occurs.  Except in the case
of a Default or Event of Default in payment of principal of and premium, if
any, or interest on any Note (including payments pursuant to the optional
redemption or required repurchase provisions of such Note, if any), the Trustee
may withhold the notice if and so long as the Trustee’s Board of Directors or
an executive committee thereof or a trust committee of its directors and/or
officers in good faith determines that withholding the notice is in the
interests of Noteholders.

Section 7.06.  Report by Trustee to
Holders.
 Within 60 days after each [              ]
beginning with the [              ]
following the date of this Indenture, and in any event prior to [            ]
in each year, the Trustee shall mail to each Noteholder a brief report dated as
of such [                  ]  that complies with Trust Indenture Act,
Section 313(a), but only if required under such Section.  The Trustee also shall comply with Trust
Indenture Act, Section 313(b).  The
Trustee shall also transmit by mail all reports required by Trust Indenture
Act, Section 313(c).

Following
the issuance of any Exchange Notes, a copy of each report at the time of its
mailing to Noteholders shall be filed with the SEC and each stock exchange (if
any) on which the Notes are listed.  The
Company agrees to notify promptly the Trustee whenever the Notes become listed
on any stock exchange and of any delisting thereof.

Section 7.07.  Compensation and Indemnity.  The Company shall
pay to the Trustee such compensation for its acceptance of this Indenture and
for its services hereunder as Trustee, Paying Agent, Registrar and in all other
capacities in which it is serving hereunder as the Company and the Trustee
shall from time to time agree in writing. 
The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. 
The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
costs of preparing and reviewing reports, certificates and other documents,
costs of preparation and mailing of notices to Noteholders and reasonable costs
of counsel retained by the Trustee, in addition to the compensation for its
services.  Such expenses shall include
the reasonable compensation and expenses, disbursements and advances of the
Trustee’s agents, counsel, accountants and experts.  The Company shall indemnify the Trustee, and
any predecessor Trustee and their respective officers, directors, employees,
counsel and agents, against any and all loss, liability, damages, claims or
expense (including reasonable attorneys’ fees and expenses) incurred by it
without negligence or willful misconduct on its part in connection with the
administration of this trust or the performance of its duties hereunder,
including the costs and expenses of enforcing this Indenture (including this
Section 7.07) and of defending itself against any claims (whether asserted by
any Noteholder, the Company or otherwise). 
The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity.  Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder.  The Company shall
defend the claim and the Trustee may have separate counsel and the Company
shall pay the fees and expenses of such counsel, provided that the Company
shall not be required to pay such fees and expenses if it assumes the
obligation for defending the Trustee, and, in the reasonable judgment of the
Trustee, there is no conflict of interest between the Company and the Trustee
in connection with such action and there is no defense that could not be
adequately raised if the Company assumes such obligation.  The Company need not reimburse any expense or
indemnify against any loss, liability or expense 

 39
 

incurred by the Trustee through the Trustee’s own
willful misconduct, negligence or bad faith.

To
secure the Company’s payment obligations in this Section 7.07, the Trustee
shall have a lien prior to the Notes on all money or property held or collected
by the Trustee other than money or property held in trust to pay principal of
and premium, if any, and interest on particular Notes.  Such lien shall survive the satisfaction and
discharge of this Indenture.  The
Trustee’s right to receive payment of any amounts due under this Section 7.07
shall not be subordinate to any other liability or Indebtedness of the Company.

The
Company’s payment obligations pursuant to this Section 7.07 shall survive the
discharge of this Indenture.  When the Trustee
incurs expenses after the occurrence of a Default specified in Section 6.01(5)
hereof with respect to the Company, the expenses are intended to constitute
expenses of administration under any bankruptcy law.

Section 7.08.  Replacement of Trustee.  The Trustee may
resign at any time by so notifying the Company. 
The Holders of a majority in principal amount of the Notes may remove
the Trustee by so notifying the Trustee and may appoint a successor Trustee.  The Company shall remove the Trustee if:

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

(2)           the Trustee is adjudged
bankrupt or insolvent;

(3)           a receiver or other
public officer takes charge of the Trustee or its property; or

(4)           the Trustee otherwise
becomes incapable of acting.

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

A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. 
Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. 
The successor Trustee shall mail a notice of its succession to
Noteholders.  The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07 hereof.

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

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

 40
 

Notwithstanding
the replacement of the Trustee pursuant to this Section 7.08, the Company’s
obligations under Section 7.07 hereof shall continue for the benefit of the
retiring Trustee.

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

In
case at the time such successor or successors by merger, conversion,
consolidation or transfer of assets to the Trustee shall succeed to the trusts
created by this Indenture, any of the Notes shall have been authenticated but
not delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee.

Section 7.10.  Eligibility;
Disqualification.  The Trustee shall at all times satisfy the
requirements of Trust Indenture Act, Section 310(a).  The Trustee shall have a combined capital and
surplus of at least U.S. $50,000,000 as set forth in its most recent filed
annual report of condition.  The Trustee
shall comply with Trust Indenture Act, Section 310(b); provided, however, that
there shall be excluded from the operation of Trust Indenture Act, Section
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in Trust
Indenture Act, Section 310(b)(1) are met.

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

Section 7.12.  Trustee’s Application for
Instruction from the Company.  Any application by the Trustee for written
instructions from the Company may, at the option of the Trustee, set forth in
writing any action proposed to be taken or omitted by the Trustee under this
Indenture and the date on and/or after which such action shall be taken or such
omission shall be effective.  The Trustee
shall not be liable for any action taken by, or omission of, the Trustee in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.

ARTICLE
8

Discharge of Indenture; Defeasance

Section 8.01.  Discharge of Liability on
Notes; Defeasance.  (a) Subject to Section 

 41
 

8.01(b) hereof, when (i)(x) the Company delivers to
the Trustee all outstanding Notes (other than Notes replaced pursuant to
Section 2.07 hereof) for cancellation or (y) all outstanding Notes not
theretofore delivered for cancellation have become due and payable, whether at
maturity or upon redemption or will become due and payable within one year or
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name and at the expense of the Company and the Company or the Guarantor
irrevocably deposits or causes to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders money in U.S. dollars,
non-callable U.S. 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 Notes not
theretofore delivered to the Trustee for cancellation for principal and
premium, if any, and accrued interest to the date of maturity or redemption, (ii)
no Default or Event of Default shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company or the Guarantor is a party or
by which the Company or the Guarantor is bound; (iii) the Company or the
Guarantor has paid or caused to be paid all sums payable by it under this
Indenture and the Notes; and (iv) the Company has delivered irrevocable
instructions to the Trustee under this Indenture to apply the deposited money
toward the payment of such Notes at maturity or the Redemption Date, as the
case may be, then the Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company (accompanied by an Officer’s
Certificate and an Opinion of Counsel stating that all conditions precedent
specified herein relating to the satisfaction and discharge of this Indenture
have been complied with) and at the cost and expense of the Company.

(b)           Subject to Section 8.01(c) and Section 8.02
hereof, the Company at any time may terminate i) all its obligations under the
Notes and this Indenture (“legal
defeasance option”), and
after giving effect to such legal defeasance, any omission to comply with such
obligations shall no longer constitute a Default or Event of Default or ii) its
obligations under, Section 3.02, Section 3.03, Section 3.04, Section 3.07,
Section 3.08 and Section 3.14 hereof, and the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference
in any such covenant to any other provision herein or in any other document,
and the operation of Section 6.01(3) (only with respect to the covenants
terminated pursuant to this Section 8.01(b)(ii)), Section 6.01(4) and Section
6.01(5) hereof, and the events specified in such Sections shall no longer
constitute an Event of Default (clause (ii) being referred to as the “covenant defeasance option”), but except as specified above, the
remainder of this Indenture and the Notes shall be unaffected thereby.  The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option. If
the Company exercises its covenant defeasance option, the Company may elect to
have the Guarantee terminate.

If the
Company exercises its legal defeasance option, payment of the Notes may not be
accelerated because of an Event of Default, and the Guarantee shall
terminate.  If the Company exercises its
covenant defeasance option, payment of the Notes may not be accelerated because
of an Event of Default specified in Section 6.01(3) (only with respect to the
covenants terminated pursuant to Section 8.01(b)(ii) above), Section 6.01(4)
and Section 6.01(5) hereof.

 42
 

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

(c)           Notwithstanding the provisions of Section
8.01(a) and (b) hereof, the Company’s obligations in Section 2.02, Section
2.03, Section 2.04, Section 2.05, Section 2.06, Section 2.07, Section 2.08,
Section 2.09, Section 2.10, Section 3.01, Section 3.05, Section 3.06, Section
3.09, Section 3.10, Section 3.11, Section 3.12, Section 3.13, Section 6.07,
Section 7.07, Section 7.08 hereof and in this Article 8 shall survive until the
Notes have been paid in full. 
Thereafter, the Company’s obligations in Section 7.07, Section 8.04 and
Section 8.05 hereof shall survive.

Section 8.02.  Conditions to Defeasance.  The Company may exercise its legal defeasance
option or its covenant defeasance option only if:

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

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

(3)           no Default or Event of
Default shall have occurred and be continuing on the date of such deposit or,
with respect to certain bankruptcy or insolvency Events of Default, on the 91st
day after such date of deposit;

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

(5)           the Company shall have
delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) to the effect that (A) the Notes and (B) assuming
no intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder of the Notes is an insider of
the Company, after the 91st day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ right generally;

(6)           the deposit does not
constitute a default under any other agreement binding on the Company;

(7)           the Company delivers to
the Trustee an Opinion of Counsel (subject to customary assumptions and
exclusions) to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under the U.S.
Investment Company Act of 1940, as amended;

 43
 

(8)           in the case of the
legal defeasance option, the Company shall have delivered to the Trustee an
Opinion of Counsel (subject to customary assumptions and exclusions) in the
United States stating that (i) the Company has received from, or there has been
published by, the U.S. Internal Revenue Service a ruling, or (ii) since the
date of this Indenture there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Noteholders will not recognize income, gain or
loss for federal income tax purposes as a result of such 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;

(9)           in the case of the
covenant defeasance option, the Company shall have delivered to the Trustee an
Opinion of Counsel (subject to customary assumptions and exclusions) in the
United States to the effect that the Noteholders will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit and
covenant defeasance and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have been the case if
such deposit and covenant defeasance had not occurred; and

(10)         the Company delivers to
the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating
that all conditions precedent to the defeasance and discharge of the Notes and
this Indenture as contemplated by this Article 8 have been complied with.

Section 8.03.  Application of Trust Money.  The Trustee shall
hold in trust money or U.S. Government Securities deposited with it pursuant to
this Article 8.  It shall apply the
deposited money and the money from U.S. Government Securities through the
Paying Agent and in accordance with this Indenture to the payment of principal
of and premium, if any, and interest on the Notes.

Section 8.04.  Repayment to Company.  The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities
held by them upon payment of all the obligations under this Indenture.

Subject
to any applicable abandoned property law, the Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal of and premium, if any, or interest on the Notes that remains
unclaimed for two years, and, thereafter, Noteholders entitled to the money
must look to the Company for payment as general creditors.

Section 8.05.  Indemnity for U.S.
Government Securities.  The Company shall pay and shall indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against
deposited U.S. Government Securities or the principal and interest received on
such U.S. Government Securities.

Section 8.06.  Reinstatement.  If the Trustee or
Paying Agent is unable to apply any money or U.S. Government Securities in
accordance with this Article 8 by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the obligations of the
Company under this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to this Article 8 until such time as
the Trustee or Paying Agent is permitted to 

 44
 

apply all such money or U.S. Government Securities
in accordance with this Article 8; provided, however, that, if the Company has
made any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Securities held by the Trustee or Paying Agent.

The
Trustee’s rights under this Article 8 shall survive termination of this
Indenture and the resignation or removal of the Trustee.

ARTICLE
9

Amendments

Section 9.01.  Without Consent of Holders.  The Company, the
Guarantor and the Trustee may amend this Indenture or the Notes without notice
to or consent of any Noteholder:

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

(2)           to comply with Article
4 in respect of the assumption by a Successor Guarantor of an obligation of the
Guarantor under this Indenture;

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

(4)           to add guarantees with
respect to the Notes;

(5)           to secure the Notes;

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

(7)           to make any change that
does not adversely affect the interests of any Noteholder;

(8)           to provide for the
issuance of any Subsequent Notes; or

(9)           to comply with any
requirement of the SEC in connection with the qualification of this Indenture
under the Trust Indenture Act.

After
an amendment under this Section 9.01 becomes effective, the Company shall mail
to Noteholders a notice briefly describing such amendment.  The failure to give such notice to all Noteholders
at the address set forth in the Note Register, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.01.

Section 9.02.  With Consent of Holders.  The Company, the
Guarantor and the Trustee may amend this Indenture or the Notes without notice
to any Noteholder but with the written consent of the Holders of at least a
majority in principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer

 45
 

or exchange offer for, Notes).  However, without the consent of each
Noteholder affected, an amendment may not:

(1)           reduce the amount of
Notes whose Holders must consent to an amendment of this Indenture or the
Notes;

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

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

(4)           reduce the premium
payable upon the redemption of any Note as described above under Article 5
hereof or any similar provision, whether through an amendment to or waiver of
Article 5 hereof, a definition or otherwise;

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

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

(7)           make any change to the
amendment provisions which require each Holder’s consent or to the waiver
provisions; or

(8)           release the Guarantor
or modify the Guarantee other than in accordance with the provisions of this
Indenture.

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

After
an amendment under this Section 9.02 becomes effective, the Company shall mail
to Noteholders a notice briefly describing such amendment.  The failure to give such notice to all
Noteholders, or any defect therein, shall not impair or affect the validity of
an amendment under this Section 9.02.

Section 9.03.  Compliance with Trust
Indenture Act.  Every amendment to this Indenture or the Notes
shall comply with the Trust Indenture Act as then in effect.

Section 9.04.  Revocation and Effect of
Consents and Waivers.  A consent to an amendment or a waiver by a Holder
of a Note shall bind the Holder and every subsequent Holder of that Note or
portion of the Note that evidences the same debt as the consenting Holder’s
Note, even if notation of the consent or waiver is not made on the Note.  However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder’s Note or portion of the
Note if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective or otherwise in accordance with any
related solicitation documents.  After an
amendment or waiver becomes effective, it shall bind every Noteholder.  An amendment or waiver shall become effective
upon receipt by the Trustee of the requisite number of written 

 46
 

consents under Section 9.01 or 9.02 hereof, as
applicable.

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

Section 9.05.  Notation on or Exchange of
Notes.  If an amendment changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee.  The Trustee may place an appropriate notation
on the Note regarding the changed terms and return it to the Holder.  Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.  Failure to make the appropriate notation or
to issue a new Note shall not affect the validity of such amendment.

Section 9.06.  Trustee to Sign Amendments.  The Trustee
shall sign any amendment authorized pursuant to this Article 9 if the amendment
does not affect the rights, duties, protections, privileges, indemnities,
powers, liabilities or immunities of the Trustee.  If it does, the Trustee may but need not sign
it.  In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and shall be provided with, and (subject to Sections 7.01 and 7.02 hereof),
shall be fully protected in relying upon an Officer’s Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture, that it conforms to the applicable requirements of the Trust
Indenture Act and that such amendment is the legal, valid and binding
obligation of the Company and any Guarantors, enforceable against them in
accordance with its terms, subject to customary exceptions and complies with
the provisions hereof (including Section 9.03 hereof).

ARTICLE
10

GUARANTEE

Section 10.01.  Guarantee.  The Guarantor hereby fully, unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety, to
each Holder of the Notes and the Trustee the full and punctual payment when
due, whether at maturity, by acceleration, by redemption or otherwise, of the
principal of and premium, if any, and interest on the Notes and all other
obligations of the Company under this Indenture, including, without limitation,
the obligations of the Company under Section 7.07 hereof (all the foregoing being
hereinafter collectively called the “Obligations”).  The Guarantor further agrees (to the extent
permitted by law) that the Obligations may be extended or renewed, in whole or
in part, without notice or further assent from it, and that it will remain bound
under this Article 10 notwithstanding any extension or renewal of any
Obligation.

The
Guarantor 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.  The

 47

Guarantor waives notice
of any default under the Notes or the Obligations.  The obligations of the Guarantor hereunder
shall not be affected by (a) the failure of the Trustee or any Holder to assert
any claim or demand or to enforce any right or remedy against the Company or
any other person under this Indenture, the Notes or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Notes or any other agreement; (d) the release of any security
held by any Holder or the Trustee for the Obligations or any of them; or (e)
any change in the ownership of the Company.

The Guarantor further agrees that the Guarantee herein
constitutes a guarantee of payment 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.

The obligations of the Guarantor hereunder shall not
be subject to any reduction, limitation, impairment or termination for any
reason (other than payment of the Obligations in full), 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 Obligations
or otherwise.  Without limiting the
generality of the foregoing, the obligations of the Guarantor herein shall not
be discharged or impaired or otherwise affected by the failure of any Holder to
assert any claim or demand or to enforce any remedy under this Indenture, the
Notes or any other agreement, by any waiver or modification of any thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
the Guarantor or would otherwise operate as a discharge of the Guarantor as a
matter of law or equity.

The Guarantor further agrees that the 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 and premium, if any, or
interest on any of the Obligations is rescinded or must otherwise be restored
by any Holder upon the bankruptcy or reorganization of the Company or
otherwise.

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

The Guarantor further agrees that, as between the
Guarantor, on the one hand, and the Holders, on the other hand, (x) the
maturity of the Obligations guaranteed hereby may be accelerated as provided in
this Indenture for the purposes of the Guarantee herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect
of the Obligations guaranteed hereby and (y) in the event of any such
declaration of acceleration of such Obligations, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantor
for the purposes of this Guarantee.

 48
 

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

Section 10.02.  No Subrogation.  Notwithstanding any payment or payments made
by the Guarantor hereunder, the Guarantor shall not be entitled to be
subrogated to any of the rights of the Trustee or any Holder against the
Company or any collateral security or guarantee or right of offset held by the
Trustee or any Holder for the payment of the Obligations, nor shall the
Guarantor seek or be entitled to seek any contribution or reimbursement from
the Company in respect of payments made by the Guarantor hereunder, until all
amounts owing to the Trustee and the Holders, as well as the holders of any
other Permitted Indebtedness, by the Company on account of the Obligations are
paid in full.  If any amount shall be
paid to the Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by the Guarantor in trust for the Trustee and the Holders, segregated from
other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to the Trustee in the exact form received by the
Guarantor (duly indorsed by the Guarantor to the Trustee, if required), to be
applied against the Obligations.

Section 10.03.  Consideration.  The Guarantor has received, or will receive,
direct or indirect benefits from the making of the Guarantee.

Section 10.04.  Additional Amounts.  In the event that payments are required to be
made by the Guarantor pursuant to its obligations under this Article, the
Guarantor will pay to the Holder of any Note additional amounts as may be
necessary so that every net payment made by the Guarantor of the principal of
and premium, if any, and interest on such Note, after deducting or withholding
for or on account of any present or future tax, duty, assessment or other
similar governmental charge duly imposed by Bermuda, will not be less than the
amount provided in that Note to be then due and payable.  The Guarantor will not be required, however,
to make any payment of additional amount for or on account of any such tax
imposed by reason of the Holder having some connection with Bermuda other than
its participation as Holder.

ARTICLE 11

MISCELLANEOUS

Section 11.01.  Trust Indenture Act Controls.  If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the Trust Indenture Act, the provision required by the
Trust Indenture Act shall control.  The
Guarantor in addition to performing its obligations under the Guarantee shall
perform such other obligations as may be imposed upon it with respect to this
Indenture under the Trust Indenture Act.

Section 11.02.  Notices.  Any notice or communication shall be in
writing and (a) delivered in person, (b) sent by a recognized overnight
delivery service (with charges prepaid), or (c) sent by telecopy if the sender
on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), addressed as follows:

 49
 

 

	
   

  	
  If to the Company:

  
	
   

  	
  Bunge N.A.
  Finance L.P.

  
	
   

  	
  2190 South
  Service Road West

  
	
   

  	
  Oakville,
  Ontario L6L 5N1

  
	
   

  	
  Attention: Frank
  Marchiony

  
	
   

  	
  Telephone: (905)
  825-7900

  
	
   

  	
  Telecopy: (905)
  847-8843

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Hunter Smith

  
	
   

  	
  Telecopy: (914)
  684-3283

  
	
   

  	
   

  
	
   

  	
  If to the
  Guarantor:

  
	
   

  	
   

  
	
   

  	
  Bunge Limited

  
	
   

  	
  50 Main Street

  
	
   

  	
  White Plains,
  New York 10606

  
	
   

  	
  Attention:
  Hunter Smith

  
	
   

  	
  Telephone: (914)
  684-3450

  
	
   

  	
  Telecopy: (914)
  684-3283

  
	
   

  	
   

  
	
   

  	
  if to the
  Trustee:

  
	
   

  	
   

  
	
   

  	
  [                                         ]

  
	
   

  	
  [                                         ]

  
	
   

  	
  [                                         ]

  
	
   

  	
  [                                         ]

  
	
   

  	
  Attention:                   

  
	
   

  	
  Telephone:                    

  
	
   

  	
  Telecopy:                   

  

 

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

Any notice or communication mailed to a registered
Noteholder shall be mailed to the Noteholder at the Noteholder’s address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.

Failure to mail a notice or communication to a
Noteholder or any defect in it shall not affect its sufficiency with respect to
other Noteholders.  If a notice or
communication is sent in the manner provided above, it is duly given, whether
or not the addressee receives it, except that notices to the Trustee shall be
effective only upon receipt.

Section 11.03.  Communication by Holders with Other Holders.  Noteholders may communicate pursuant to
Trust Indenture Act, Section 312(b) with other Noteholders with respect to
their rights under this Indenture or the Notes. 
The Company, the Trustee, the Registrar 

 50
 

and anyone
else shall have the protection of Trust Indenture Act, Section 312(c).

Section 11.04.  Certificate and Opinion as to Conditions
Precedent.  Upon any request
or application by the Company to the Trustee to take or refrain from taking any
action under this Indenture, the Company shall furnish to the Trustee:

(1)           an
Officer’s Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signer, all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have
been complied with; and

(2)           an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent
have been complied with.

Section 11.05.  Statements Required in Certificate or
Opinion.  Each certificate or
opinion with respect to compliance with a covenant or condition provided for in
this Indenture shall include:

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

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

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

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

In giving such Opinion of Counsel, counsel may rely as
to factual matters on an Officer’s Certificate or on certificates of public
officials.

Section 11.06.  When Notes Disregarded.  In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by the Company or by an Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Trust Officer of the Trustee
actually knows are so owned shall be so disregarded.  Also, subject to the foregoing, only Notes
outstanding at the time shall be considered in any such determination.

Section 11.07.  Rules by Trustee,  Paying Agent and Registrar.  The Trustee may make reasonable
rules for action by, or a meeting of, Noteholders.  The Registrar and the Paying Agent may make
reasonable rules for their functions.

Section 11.08.  Legal Holidays.  A “Legal Holiday” is a Saturday, a Sunday or
other day on which commercial banking institutions are authorized or required
to be closed in New York, 

 51
 

New York or Hamilton, Bermuda. 
If a payment date is a Legal Holiday, payment shall be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.  If a regular
record date is a Legal Holiday, the record date shall not be affected.

Section 11.09.  GOVERNING LAW.  THIS INDENTURE AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 11.10.  No Recourse Against Others.  An incorporator, director, officer,
employee, affiliate or stockholder of the Company or the Guarantor, solely by
reason of this status, shall not have any liability for any obligations of the
Company under the Notes, this Indenture or the Guarantee or for any claim based
on, in respect of or by reason of such obligations or their creation.  By accepting a Note, each Noteholder shall
waive and release all such liability. 
The waiver and release shall be part of the consideration for the issue
of the Notes.

Section 11.11.  Successors.  All agreements of the Company in this
Indenture and the Notes shall bind their respective successors.  All agreements of the Trustee in this
Indenture shall bind its successors.

Section 11.12.  Consent to Jurisdiction.  The Guarantor irrevocably submits to the
non-exclusive jurisdiction of any New York state or U.S. federal court sitting
in the Borough of Manhattan, The City of New York, in any action or proceeding
relating to its obligations, liabilities or any other matter arising out of or
in connection with this Indenture or the Notes. 
The Guarantor hereby irrevocably agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
state or U.S. federal court.  The
Guarantor also hereby irrevocably waives, to the fullest extent permitted by
law, any objection to venue or the defense of an inconvenient forum to the
maintenance of any such action or proceeding in any such court.

Section 11.13.  Appointment for Agent for
Service of Process.  The
Guarantor hereby (i) irrevocably designates and appoints its Chief Financial
Officer (from time to time) at its principal executive offices at 50 Main
Street, White Plains, New York 10606 (the “Authorized
Agent”), as its agent upon which process may be served in any suit,
action or proceeding described in the first sentence of Section 11.12 hereof
and represents and warrants that the Authorized Agent has accepted such
designation and (ii) agrees that service of process upon the Authorized Agent
and written notice of said service to the Guarantor mailed or delivered to its
Secretary at its registered office at 2 Church Street, Hamilton, Bermuda, shall
be deemed in every respect effective service of process upon the Guarantor in
any such suit or proceeding.  The
Guarantor further agrees to take any and all action, including the execution
and filing of any and all such documents and instruments, as may be necessary
to continue such designation and appointment of the Authorized Agent in full
force and effect so long as any of the Notes shall be outstanding.

Section 11.14.  Waiver of Immunities.  To the extent that the Guarantor or any of its
properties, assets or revenues may have or may hereafter become entitled to, or
have attributed to them, any right of immunity, on the grounds of sovereignty, from
any legal action, suit or 

 52
 

proceeding, from set-off or counterclaim, from the jurisdiction of any
court, from service of process, from attachment upon or prior to judgment, or
from attachment in aid of execution of judgment, or from execution of judgment,
or other legal process or proceeding for the giving of any relief or for the
enforcement of any judgment, in any jurisdiction in which proceedings may at
any time be commenced, with respect to its obligations, liabilities or any
other matter under or arising out of or in connection with this Indenture or
the Notes, the Guarantor hereby irrevocably and unconditionally, to the extent
permitted by applicable law, waives and agrees not to plead or claim any such
immunity and consents to such relief and enforcement.

Section 11.15.  Foreign Taxes.  Any payments by the Guarantor to the Trustee
or the Noteholders hereunder shall be made free and clear of, and without
deduction or withholding for or on account of, any and all present and future
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereinafter imposed, levied, collected,
withheld or assessed by Bermuda or any other foreign jurisdiction in which the
Guarantor or any Subsidiary has an office from which payment is made or deemed
to be made, excluding any such tax imposed by reason of the Trustee or any
Noteholder having some connection with any such jurisdiction other than its
participation as the Trustee or Noteholder under the Indenture (all such taxes,
“Foreign Taxes”).  If the Guarantor is prevented by operation of
law or otherwise from paying, causing to be paid or remitting that portion of
amounts payable hereunder represented by Foreign Taxes withheld or deducted,
then amounts payable under this Indenture shall, to the extent permitted by
law, be increased to such amount as is necessary to yield and remit to the
Trustee and the Noteholders an amount which, after deduction of all Foreign
Taxes (including all Foreign Taxes payable on such increased payments) equals
the amount that would have been payable if no Foreign Taxes applied.

Section 11.16.  Judgment Currency.  If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder into any currency
other than U.S. dollars, the parties hereto agree, to the fullest extent
permitted by law, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee or any Holder, as the
case may be, could purchase U.S. dollars with such other currency in New York
City on the Business Day preceding that on which final judgment is given.  The obligation of the Guarantor with respect
to any sum due from it to the Trustee or any Holder shall, notwithstanding any
judgment in a currency other than U.S. dollars, be discharged only if and to
the extent that on the first Business Day following receipt by the Trustee or
such Holder, as the case may be, of any sum adjudged to be so due in such other
currency, the Trustee or such Holder may in accordance with normal banking
procedures purchase U.S. dollars with such other currency.  If the U.S. dollars so purchased are less
than the sum originally due to the Trustee or such Holder hereunder, the Guarantor
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Trustee or such Holder against such loss.  If the U.S. dollars so purchased are greater
than the sum originally due to the Trustee or such Holder hereunder, the Trustee
or such Holder, as the case may be, agrees to pay to the Guarantor an amount
equal to the excess of the U.S. dollars so purchased over the sum originally
due to the Trustee or such Holder hereunder.

Section 11.17.  No Bankruptcy Petition Against
the Borrower; Liability of the Borrower.  Each of the Noteholders and the Trustee hereby
covenants and agrees that, prior to the date which is one year and one day
after the payment in full of the last maturing Note and all other 

 53
 

Indebtedness of the Company ranking equal with or junior to the Notes
in right of payment, it will not institute against, or join with or assist any
other Person in instituting against, the Company, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any applicable insolvency laws.

Notwithstanding any other provision hereof, the sole
remedy of any Noteholder, the Trustee or any other Person against the Company
in respect of any obligation, covenant, representation, warranty or agreement
of the Company under or related to this Indenture or the Notes shall be against
the assets of the Company.  Neither the
Trustee, nor any Noteholder nor any other Person shall have any claim against
the Company to the extent that such assets are insufficient to meet such
obligations, covenant, representation, warranty or agreement (the difference
being referred to herein as a “shortfall”) and
all claims in respect of the shortfall shall be extinguished; provided,
however, that the provisions of this Section 11.17 apply solely to the obligations
of the Company and shall not extinguish such shortfall or otherwise restrict
such Person’s rights or remedies against the Guarantor for purposes of the
obligations of the Guarantor to any Person under the Guarantee.

The provisions of this Section 11.17 shall survive the
termination of this Indenture and the resignation or removal of the Trustee.

Section 11.18.  Multiple 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.  One signed copy is enough to prove this
Indenture.

Section 11.19.  Qualification of Indenture.  The Company shall qualify this Indenture
under the Trust Indenture Act and shall pay all reasonable costs and expenses
(including attorneys’ fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Notes and printing this
Indenture and the Notes.  The Trustee
shall be entitled to receive from the Company any such Officer’s Certificates,
Opinions of Counsel or other documentation as it may reasonably request in
connection with any such qualification of this Indenture under the Trust
Indenture Act.

Section 11.20.  Table of Contents; Headings.  The table of contents, cross-reference sheet
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not intended to be considered a part
hereof and shall not modify or restrict any of the terms or provisions hereof.

 54
 

IN WITNESS WHEREOF, the parties have caused this
Indenture to be duly executed as of the date first written above.

	
  

  	
  BUNGE N.A. FINANCE L.P., as
  Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUNGE LIMITED,
  as Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                   ],

  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 55

EXHIBIT A

[FORM OF FACE OF
INITIAL NOTE AND SUBSEQUENT NOTE]

[Depository
Legend, if applicable]

	
  No. [          ]

  	
   

  	
  Principal Amount U.S.

  
	
   

  	
   

  	
  [              ],
  as revised by the

  
	
   

  	
   

  	
  Schedule of Increases and

  
	
   

  	
   

  	
  Decreases in Global Note attached

  
	
   

  	
   

  	
  hereto

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP NO.     

  	
   

  
	
   

  	
   

  	
  ISIN: 

  	
   

  

 

[    ]%
Senior Notes Due [    ]

Bunge N.A. Finance L.P., a Delaware limited
partnership, promises to pay to [                            ],
or registered assigns, the principal sum of $[                   ]
U.S. Dollars, as revised by the Schedule of Increases and Decreases in Note
attached hereto, on [              ].

Interest Payment Dates: [              ]
and [              ]

Record Dates: [          ]
and [            ]

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

 A-1
 

IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed.

	
  

  	
   

  	
  BUNGE N.A. FINANCE L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

[                                                          ],

as Trustee, certifies that this is one of

the Notes referred to in the Indenture.

	
  By:

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
  Date: 

  	
                           

  	
  , 200

  	
   

  	
   

  
							

 

 A-2
 

[FORM OF REVERSE
SIDE OF INITIAL NOTE AND SUBSEQUENT NOTE]

[    ]% Senior Note Due [     ]

1.             General

Bunge N.A. Finance L.P., a Delaware limited
partnership (such partnership, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the “Company”), issued the Notes under an Indenture, dated as of [               ],
among the Company, the Guarantor and the Trustee (as such Indenture may be
amended or supplemented from time to time in accordance with the terms thereof,
the “Indenture”). The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the U.S. Trust Indenture Act of 1939 as in effect on the date of
the Indenture (the “Trust Indenture Act”).
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Trust Indenture Act for a
statement of those terms.

The Notes are general unsecured senior obligations of
the Company, including (a) U.S. $[               ]
in aggregate principal amount of Notes being offered on the Issue Date (subject
to Section 2.07 of the Indenture) and (b) any Subsequent Notes. The Notes rank
equally with all other unsecured and unsubordinated indebtedness of the
Company. This Note is one of the [Initial Notes] [Subsequent Notes] referred to
in the Indenture.

The Company may from time to time during the
Subsequent Issuance Period, without the consent of existing Holders, create and
issue Subsequent Notes having the same terms and conditions as the Initial
Notes in all respects, except for the Issue Date, issue price and first payment
of interest thereon. Subsequent Notes issued in this manner will be
consolidated with and will form a single class with the previously outstanding
Notes.

The Initial Notes and any Subsequent Notes will be treated
as a single class of securities under the Indenture. The Indenture includes
various covenants that limit the ability of the Company, among other things, to
incur Indebtedness or Liens or enter into any consolidations, mergers or
amalgamations. In addition, the Indenture imposes certain limitations on, among
other things, (i) the incurrence of Liens by the Guarantor or any Restricted
Subsidiary, (ii) Sale-Leaseback Transactions by the Guarantor or any Restricted
Subsidiary and (iii) consolidations, mergers, amalgamations and sales of assets
of the Guarantor or any Subsidiary.

To guarantee the
due and punctual payment of the principal of and premium, if any, and interest
on the Notes and all other amounts payable by the Company under the Indenture
and the Notes when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Notes and
the Indenture, the Guarantor has unconditionally guaranteed such obligations
pursuant to the terms of the Indenture. The Guarantee is an unsecured and
unsubordinated obligation of the Guarantor and ranks equally with all other
unsecured and unsubordinated indebtedness and obligations of the Guarantor.

 A-3
 

2.             Interest

The Company promises to pay interest on the principal
amount of this Note at the rate per annum shown above.

The Company will pay interest semi-annually on [       ]
and [       ] of each year commencing
[       ]. Interest on the Notes will
accrue from the most recent date to which interest has been paid on the Notes
or, if no interest has been paid, from [                     ],
200[  ]. The Company shall pay interest on overdue principal
or premium, if any, plus interest on such interest to the extent lawful, at the
rate borne by the Notes to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.

3.             Method of Payment

By at least 10:00 a.m. (New York City time) on the
date on which any principal of and premium, if any, or interest on any Note is
due and payable, the Company shall irrevocably deposit with the Trustee or the
Paying Agent money sufficient to pay such principal, premium, if any, and/or
interest. The Company will pay interest (except Defaulted Interest) to the
Persons who are registered Holders of Notes at the close of business on the [          ]or
[          ] next
preceding the interest payment date even if Notes are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date. Holders
must surrender Notes to a Paying Agent to collect principal payments. The
Company will pay principal, premium, if any, and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Except as described in the succeeding two sentences, the
principal of and premium, if any, and interest on the Notes shall be payable at
the office or agency of the Company maintained for such purpose in The City of
New York, or at such other office or agency of the Company as may be maintained
for such purpose pursuant to Section 2.03 of the Indenture; provided, however, that, at the option of the Company, each
installment of interest may be paid by check mailed to addresses of the Persons
entitled thereto as such addresses shall appear on the Note Register. Payments
in respect of Notes represented by a Global Note (including principal, premium,
if any, and interest) will be made by wire transfer of immediately available
funds to the account specified by The Depository Trust Company. Payments in
respect of Notes represented by Definitive Notes (including principal, premium,
if any, and interest) held by a Holder of at least U.S.$1,000,000 aggregate
principal amount of Notes will be made by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 15 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).

4.             Paying Agent and
Registrar

Initially, [                           ]
(the “Trustee”), will act as Trustee, Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice to any Noteholder. The Company, the
Guarantor or any Subsidiary may act as Paying Agent, Registrar or co-registrar.

 A-4
 

5.             Optional
Redemption by the Company

The Notes will be redeemable at the option of the
Company, in whole at any time or in part from time to time, on at least 30 days
but not more than 60 days’ prior notice mailed to the registered address of
each Holder of Notes to be so redeemed, at a redemption price equal to (a) the
greater of (i) 100% of their principal amount to be redeemed or (ii) the sum of
the present values of the remaining scheduled payments of principal and
interest thereon from the date of redemption to the date of maturity (except
for currently accrued but unpaid interest) discounted to the date of
redemption, on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months), at the applicable Treasury Yield (as defined below),
plus [     ] basis points (such greater amount,
the “Redemption Price”), plus (b) accrued
and unpaid interest, if any, to the date of redemption.

For purposes of determining the Redemption Price, the
following definitions are applicable:

“Comparable Treasury Issue”
means the United States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term of the Notes that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such Notes.

“Comparable Treasury Price”
means, with respect to any redemption date, (a) the bid price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
at 4:00 P.M. on the third business day preceding such redemption date, as set
forth on “Telerate Page 500” (or such other page as may replace Telerate Page
500), or (b) if such page (or any successor page) is not displayed or does not
contain such bid prices at such time (i) the average of the Reference Treasury
Dealer Quotations or (ii) if the Trustee is unable to obtain at least four such
Reference Treasury Dealers Quotations, the average of all Reference Treasury
Dealer Quotations obtained by the Trustee.

“Independent Investment
Banker” means any of [                            ]
or [                                    ],
or, if all such firms are unwilling or unable to select the applicable
Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee and reasonably acceptable to the
Company.

“Reference Treasury Dealer”
means [                           ]
and [                                  ],
and two other primary U.S. Government securities dealer in New York City
selected by the Independent Investment Banker (each, a “Primary Treasury Dealer”);
provided however, that if any of the foregoing shall cease to be a Primary
Treasury Dealer, the Company will substitute another Primary Treasury Dealer.

“Reference Treasury Dealer
Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date for the Notes, an average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue for the
Notes (expressed in each case as a percentage of its principal amount) quoted
in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.

 A-5
 

“Treasury Yield”
means, with respect to any redemption date applicable to the Notes, the rate
per annum equal to the semi-annual equivalent yield to maturity (computed as of
the third business day immediately preceding such redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the applicable Comparable
Treasury Price for such redemption date.

In the case of any partial redemption, selection of
the Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not listed, then on a pro rata basis, by
lot or by such other method as the Trustee in its sole discretion shall deem to
be fair and appropriate, although no Notes of U.S. $1,000 in original principal
amount or less will be redeemed in part. If any Note is to be redeemed in part
only, the notice of redemption relating to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in principal amount
equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the
redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Company has deposited with the Paying
Agent funds in satisfaction of the applicable Redemption Price pursuant to the
Indenture.

6.             Offers to
Repurchase

Upon the occurrence of a Change of Control Triggering
Event, the Company shall make an offer (a “Change of Control Offer”)
to each Holder to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 thereof) of each Holder’s Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of purchase (the “Change of
Control Payment”). The Change of Control Offer shall be made in
accordance with Section 3.14 of the Indenture.

7.             Additional Amounts

The Guarantor will, subject to certain limitations set
forth in the Indenture, pay to the Holder of any Note additional amounts as
necessary so that every net payment made by the Guarantor of principal of and
premium, if any, and interest on such Note, after deducting or withholding for
or on account of any present or future tax, duty, fee, assessment or other
governmental charge imposed on that holder by Bermuda or any other foreign
jurisdiction, will not be less than the amount provided in the Note to be then
due and payable.

8.             Denominations;
Transfer; Exchange

The Notes are in registered form without coupons in
denominations of principal amount of U.S. $1,000 and whole multiples of U.S.
$1,000. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange (i) any Notes selected for redemption (except, in
the case of a Note to be redeemed in part, the portion of the Note not to be
redeemed) for a period beginning 15 days before the mailing of a notice of
Notes to be redeemed and ending on the date of such mailing or (ii) any Notes
for a

 A-6
 

period beginning 15 days
before an interest payment date and ending on such interest payment date.

9.             Persons Deemed
Owners

The registered Holder of this Note may be treated as
the owner of it for all purposes.

10.           Unclaimed Money

If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent shall pay the
money back to the Company at its request unless an abandoned property law
designates another Person. After any such payment, Holders entitled to the
money must look only to the Company and not to the Trustee for payment.

11.           Defeasance

Subject to certain conditions set forth in the
Indenture, the Company at any time may terminate some or all of its obligations
under the Notes and the Indenture if the Company deposits with the Trustee
money or U.S. Government Securities for the payment of principal and interest
on the Notes to redemption or maturity, as the case may be.

12.           Amendment, Waiver

The Indenture or the Notes may be amended with the
written consent of the Holders of at least a majority in principal amount of the
then outstanding Notes; provided, however,
that the consent of each Noteholder affected is required to (i) reduce the
amount of Notes whose Holders must consent to an amendment of the Indenture or
the Notes, (ii) reduce the stated rate or extend the stated time for payment of
interest on a Note, (iii) reduce the principal of or extend the Stated Maturity
of a Note, (iv) reduce the premium payable upon redemption of a Note, (v) make
any Note payable in money other than that stated herein, (vi) impair the right
of a Holder to receive payment under the Note or institute suit for the
enforcement of such payment, (vii) make any change to the amendment provisions
which require each Holder’s consent or the waiver provisions, or (viii) release
the Guarantor or modify the Guarantee.

Subject to certain exceptions set forth in the
Indenture, without the consent of any Noteholder, the Company and the Trustee
may amend the Indenture or the Notes to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 4 of the Indenture, or to provide for
uncertificated Notes in addition to or in place of certificated Notes, or to
add guarantees with respect to the Notes, or to secure the Notes, or to add
additional covenants of the Company, the Guarantor or any Subsidiary, or
surrender rights and powers conferred on the Company, the Guarantor or any
Subsidiary, issue Subsequent Notes, or to comply with any requirement of the
SEC in connection with qualifying the Indenture under the Trust Indenture Act,
or to make any change that does not adversely affect the rights of any
Noteholder.

Subject to certain exceptions set forth in the
Indenture, any default (other than with respect to nonpayment or in respect of
a provision that cannot be amended without the written consent of each
Noteholder affected) or noncompliance with any provision may be waived with

 A-7
 

the written consent of
the Holders of a majority in principal amount of the then outstanding Notes.

13.           Defaults and
Remedies

Under the Indenture, Events of Default include (1)
default for 30 days in payment of interest or additional interest when due on
the Notes; (2) default in payment of principal of or premium, if any, on the
Notes at Stated Maturity, upon optional redemption, upon declaration or
otherwise; (3) the failure by the Company or the Guarantor to comply for 60
days after written notice with its other agreements contained in the Indenture
or under the Notes (other than those referred to in (1) or (2) above); (4) the
failure of the Company, the Guarantor or any Subsidiary (a) to pay the
principal of any indebtedness for borrowed money, including obligations
evidenced by any mortgage, indenture, bond, debenture, note, guarantee or other
similar instruments, on the scheduled or original date due; (b) to pay interest
on any such indebtedness beyond any provided grace period; or (c) to observe or
perform any agreement or condition relating to such indebtedness, the effect of
which is to cause such indebtedness to become due prior to its stated maturity
and such acceleration has not been cured within 15 days after notice of
acceleration; provided that an event described in clause (a), (b) or (c) above
shall not constitute an Event of Default unless, at such time, one or more
events of the type described in clauses (a), (b) or (c) shall have occurred or
be continuing with respect to indebtedness in an amount exceeding U.S.
$50,000,000; or (5) certain events of bankruptcy, insolvency or reorganization
of the Company, the Guarantor or any Material Subsidiary (the “bankruptcy events”). However, a default under clause (3)
will not constitute an Event of Default until the Trustee or the Holders of at
least 25% in principal amount of the outstanding Notes notify the Company or
the Guarantor, as the case may be, of the default and the Company or the
Guarantor, as the case may be, does not cure such default within the time
specified in clause (3) hereof after receipt of such notice.

If an Event of Default other than a bankruptcy event
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Notes may declare all the Notes by written notice to
the Company to be due and payable immediately. If an Event of Default in
connection with a bankruptcy event occurs and is continuing, the principal
amount of the Notes, the premium, if any, and all accrued and unpaid interest
shall be immediately due and payable without any action or other act on the
part of the Trustee or the Holders.

Noteholders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Notes unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the Notes
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default or Event of Default
(except a Default or Event of Default in payment of principal or interest) if
it determines that withholding notice is in their interest.

14.           Trustee Dealings
with the Company

Subject to certain limitations set forth in the
Indenture, the Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
and collect obligations owed to it by the Company or its Affiliates and may

 A-8
 

otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.

15.           No Recourse Against
Others

An incorporator, director, officer, employee,
affiliate, stockholder or partner (other than a general partner of the Company
and any stockholder of any such general partner that is an unlimited liability
company, in each case that would otherwise be liable) of each of the Company or
the Guarantor, solely by reason of this status, shall not have any liability
for any obligations of the Company under the Notes, the Indenture or the
Guarantee or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.

16.           No Petition

By its acquisition of this Note, each Holder hereof
agrees that neither it nor the Trustee on its behalf may commence, or join with
any other person in the commencement of, a bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding with respect to the Company
under any applicable insolvency laws until one year and one date after the
Notes and all other Indebtedness of the Company ranking equal with or junior to
the Notes in right of payment, including all interest and premium thereon, if
any, are paid in full.

17.           Authentication

This Note shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent acting on its behalf) manually signs
the certificate of authentication appearing on this Note.

18.           Abbreviations

Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to
Minors Act).

19.           CUSIP Numbers

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

 A-9
 

20.           Governing Law

This Note shall be governed by, and construed in
accordance with, the laws of the State of New York.

The Company will furnish to any Noteholder upon
written request and without charge to the Noteholder a copy of the
Indenture.  Requests may be made to:

Bunge N.A. Finance L.P.

2190 South Service Road West

Oakville, Ontario L6L 5N1

Attention:  Frank Marchiony

Telephone:  (905) 825-7900

Telecopy:  (905) 847-8843

 A-10
 

ASSIGNMENT FORM

To assign this Note, fill
in the form below:

I or we assign and
transfer this Note to

 

	
   

  	
   

  	
   

  
	
  

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

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
   

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

  	
   

  
					

 

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

 

	
   

  
	
   

  
	
  Date:

  	
   

  	
    Your
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  
	
   

  	
  (Signature must
  be guaranteed)

  
	
   

  	
   

  
	
   

  
	
  Sign exactly as your name appears on the other side
  of this Note.

  
					

 

The signature(s) should
be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.

 A-11
 

[TO BE ATTACHED TO
NOTES]

SCHEDULE OF INCREASES OR DECREASES IN NOTE

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

	
  Date of Exchange

  	
   

  	
  Amount of decrease in

  Principal Amount of this

  Note

  	
   

  	
  Amount of increase in

  Principal Amount of this

  Note

  	
   

  	
  Principal Amount of this

  Note following such

  decrease or increase

  	
   

  	
  Signature of authorized

  signatory of Trustee or 

  Securities Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 A-12
 

OPTION OF HOLDER TO ELECT
PURCHASE

If
you want to elect to have this Note purchased by the Company pursuant to Section 3.14
of the Indenture, check the box below:

[   ] Section 3.14

If
you want to elect to have only part of this Note purchased by the Issuer pursuant
to Section 3.14 of the Indenture, state the amount you elect to have purchased:

$                      

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on

  the face of this Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax Identification No.:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  	
   

  
								

 

*
Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable
to the Trustee).

 A-13
 

SCHEDULE 1.1

[Material
Subsidiaries] 

 A-14
 

SCHEDULE 3.4

[Existing Liens]

 

 A-15

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