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EXHIBIT 4.4    
    

CIMAREX
ENERGY CO., 

THE SUBSIDIARY GUARANTORS PARTIES

HERETO, 

AND 

U.S. BANK NATIONAL ASSOCIATION, 

as Trustee 

[        ]% Senior Notes due 2017 

INDENTURE 

Dated as of April [            ], 2007 

  

 
 

CROSS-REFERENCE TABLE    
    

	TIA Section
 
	 	 
	 	Indenture Section

	310	(a)	(1)	 	 	 	7.10
	 	(a)	(2)	 	 	 	7.10
	 	(a)	(3)	 	 	 	N.A.
	 	(a)	(4)	 	 	 	N.A.
	 	(a)	(5)	 	 	 	7.10
	 	(b)	 	 	 	 	7.8; 7.10
	 	(c)	 	 	 	 	N.A.
	311	(a)	 	 	 	 	7.11
	 	(b)	 	 	 	 	7.11
	 	(c)	 	 	 	 	N.A.
	312	(a)	 	 	 	 	2.5
	 	(b)	 	 	 	 	11.3
	 	(c)	 	 	 	 	11.3
	313	(a)	 	 	 	 	7.6
	 	(b)	(1)	 	 	 	N.A.
	 	(b)	(2)	 	 	 	7.6
	 	(c)	 	 	 	 	7.6
	 	(d)	 	 	 	 	7.6
	314	(a)	 	 	 	 	3.2; 3.22
	 	(b)	 	 	 	 	N.A.
	 	(c)	(1)	 	 	 	11.4
	 	(c)	(2)	 	 	 	11.4
	 	(c)	(3)	 	 	 	N.A.
	 	(d)	 	 	 	 	N.A.
	 	(e)	 	 	 	 	11.5
	 	(f)	 	 	 	 	N.A.
	315	(a)	 	 	 	 	7.1
	 	(b)	 	 	 	 	7.5
	 	(c)	 	 	 	 	7.1
	 	(d)	 	 	 	 	7.1
	 	(e)	 	 	 	 	6.11
	316	(a)	(last sentence)	 	 	 	11.6
	 	(a)	(1)(A)	 	 	 	6.5
	 	(a)	(1)(B)	 	 	 	6.4
	 	(a)	(2)	 	 	 	N.A.
	 	(b)	 	 	 	 	6.7
	 	(c)	 	 	 	 	9.4
	317	(a)	(1)	 	 	 	6.8
	 	(a)	(2)	 	 	 	6.9
	 	(b)	 	 	 	 	2.4
	318	(a)	 	 	 	 	11.1
	 	(b)	 	 	 	 	N.A.
	 	(c)	 	 	 	 	N.A.
	
    N.A. means Not Applicable.	
 	

 

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

i

  

 
 

TABLE OF CONTENTS    
    

	 
	 
	 	Page

	ARTICLE I Definitions and Incorporation by Reference	 	1
	 	
 SECTION 1.1.	

Definitions	
 	

1
	 	SECTION 1.2.	Incorporation by Reference of Trust Indenture Act	 	29
	 	SECTION 1.3.	Rules of Construction	 	29
	
  ARTICLE II The Notes	
 	

30
	 	
 SECTION 2.1.	

Form, Dating and Terms	
 	

30
	 	SECTION 2.2.	Execution and Authentication	 	33
	 	SECTION 2.3.	Registrar and Paying Agent	 	33
	 	SECTION 2.4.	Paying Agent To Hold Money in Trust	 	34
	 	SECTION 2.5.	Holder Lists	 	34
	 	SECTION 2.6.	Transfer and Exchange	 	34
	 	SECTION 2.7.	Mutilated, Destroyed, Lost or Stolen Notes	 	35
	 	SECTION 2.8.	Outstanding Notes	 	36
	 	SECTION 2.9.	Temporary Notes	 	36
	 	SECTION 2.10.	Cancellation	 	37
	 	SECTION 2.11.	Payment of Interest; Defaulted Interest	 	37
	 	SECTION 2.12.	Computation of Interest	 	38
	 	SECTION 2.13.	CUSIP Numbers	 	38
	
  ARTICLE III Covenants	
 	

38
	 	
 SECTION 3.1.	

Payment of Notes	
 	

38
	 	SECTION 3.2.	SEC Reports	 	39
	 	SECTION 3.3.	Limitation on Indebtedness	 	39
	 	SECTION 3.4.	Limitation on Restricted Payments	 	43
	 	SECTION 3.5.	Limitation on Liens	 	47
	 	SECTION 3.6.	Limitation on Sale/Leaseback Transactions	 	47
	 	SECTION 3.7.	Limitation on Restrictions on Distributions from Restricted Subsidiaries	 	48
	 	SECTION 3.8.	Limitation on Sales of Assets and Subsidiary Stock	 	49
	 	SECTION 3.9.	Limitation on Affiliate Transactions	 	52
	 	SECTION 3.10.	Change of Control	 	53
	 	SECTION 3.11.	Future Subsidiary Guarantors	 	54
	 	SECTION 3.12.	Limitation on Lines of Business	 	55
	 	SECTION 3.13.	Payments for Consent	 	55
	 	SECTION 3.14.	Limitation on the Sale of Capital Stock of Restricted Subsidiaries	 	55
	 	SECTION 3.15.	Effectiveness of Covenants	 	55
	 	SECTION 3.16.	Maintenance of Office or Agency	 	56
	 	SECTION 3.17.	Money for Note Payments to Be Held in Trust	 	57
	 	SECTION 3.18.	Corporate Existence	 	58
	 	SECTION 3.19.	Payment of Taxes and Other Claims	 	58
	 	SECTION 3.20.	Maintenance of Properties	 	58
	 	SECTION 3.21.	Compliance with Laws	 	58
	 	SECTION 3.22.	Compliance Certificate	 	58
	
  ARTICLE IV Successor Company and Successor Subsidiary Guarantor	
 	

59
	 	
 SECTION 4.1.	

Merger and Consolidation	
 	

59
	 	 	 	 

ii

 

	
  ARTICLE V Redemption of Notes	
 	

60
	 	
 SECTION 5.1.	

Optional Redemption	
 	

60
	 	SECTION 5.2.	Applicability of Article	 	60
	 	SECTION 5.3.	Election to Redeem; Notice to Trustee	 	60
	 	SECTION 5.4.	Selection by Trustee of Notes to Be Redeemed	 	60
	 	SECTION 5.5.	Notice of Redemption	 	61
	 	SECTION 5.6.	Deposit of Redemption Price	 	62
	 	SECTION 5.7.	Notes Payable on Redemption Date	 	62
	 	SECTION 5.8.	Notes Redeemed in Part	 	62
	
  ARTICLE VI Defaults and Remedies	
 	

62
	 	
 SECTION 6.1.	

Events of Default	
 	

62
	 	SECTION 6.2.	Acceleration	 	64
	 	SECTION 6.3.	Other Remedies	 	65
	 	SECTION 6.4.	Waiver of Past Defaults	 	65
	 	SECTION 6.5.	Control by Majority	 	65
	 	SECTION 6.6.	Limitation on Suits	 	66
	 	SECTION 6.7.	Rights of Holders to Receive Payment	 	66
	 	SECTION 6.8.	Collection Suit by Trustee	 	66
	 	SECTION 6.9.	Trustee May File Proofs of Claim	 	66
	 	SECTION 6.10.	Priorities	 	67
	 	SECTION 6.11.	Undertaking for Costs	 	67
	
  ARTICLE VII Trustee	
 	

67
	 	
 SECTION 7.1.	

Duties of Trustee	
 	

67
	 	SECTION 7.2.	Rights of Trustee	 	68
	 	SECTION 7.3.	Individual Rights of Trustee	 	69
	 	SECTION 7.4.	Trustee's Disclaimer	 	69
	 	SECTION 7.5.	Notice of Defaults	 	69
	 	SECTION 7.6.	Reports by Trustee to Holders	 	70
	 	SECTION 7.7.	Compensation and Indemnity	 	70
	 	SECTION 7.8.	Replacement of Trustee	 	71
	 	SECTION 7.9.	Successor Trustee by Merger	 	71
	 	SECTION 7.10.	Eligibility; Disqualification	 	71
	 	SECTION 7.11.	Preferential Collection of Claims Against Company	 	72
	
  ARTICLE VIII Discharge of Indenture; Defeasance	
 	

72
	 	
 SECTION 8.1.	

Satisfaction and Discharge of Indenture	
 	

72
	 	SECTION 8.2.	Discharge of Liability on Notes; Defeasance	 	72
	 	SECTION 8.3.	Application of Trust Money	 	74
	 	SECTION 8.4.	Repayment to Company	 	74
	 	SECTION 8.5.	Indemnity for U.S. Government Obligations	 	75
	 	SECTION 8.6.	Reinstatement	 	75
	 	 	 	 

iii

 

	
  ARTICLE IX Amendments	
 	

75
	 	
 SECTION 9.1.	

Without Consent of Holders	
 	

75
	 	SECTION 9.2.	With Consent of Holders	 	76
	 	SECTION 9.3.	Compliance with Trust Indenture Act	 	77
	 	SECTION 9.4.	Revocation and Effect of Consents and Waivers	 	77
	 	SECTION 9.5.	Notation on or Exchange of Notes	 	77
	 	SECTION 9.6.	Trustee to Sign Amendments	 	77
	
  ARTICLE X Subsidiary Guarantees	
 	

77
	 	
 SECTION 10.1.	

Guarantees	
 	

77
	 	SECTION 10.2.	Limitation on Liability; Termination, Release and Discharge	 	79
	 	SECTION 10.3.	Right of Contribution	 	80
	 	SECTION 10.4.	No Subrogation	 	80
	 	SECTION 10.5.	Execution and Delivery of Subsidiary Guarantee	 	80
	
  ARTICLE XI Miscellaneous	
 	

81
	 	
 SECTION 11.1.	

Trust Indenture Act Controls	
 	

81
	 	SECTION 11.2.	Notices	 	81
	 	SECTION 11.3.	Communication by Holders with other Holders	 	81
	 	SECTION 11.4.	Certificate and Opinion as to Conditions Precedent	 	81
	 	SECTION 11.5.	Statements Required in Certificate or Opinion	 	82
	 	SECTION 11.6.	When Notes Disregarded	 	82
	 	SECTION 11.7.	Rules by Trustee, Paying Agent and Registrar	 	82
	 	SECTION 11.8.	Legal Holidays	 	82
	 	SECTION 11.9.	Governing Law	 	82
	 	SECTION 11.10.	No Recourse Against Others	 	82
	 	SECTION 11.11.	Successors	 	83
	 	SECTION 11.12.	Multiple Originals	 	83
	 	SECTION 11.13.	Variable Provisions	 	83
	 	SECTION 11.14.	Table of Contents; Headings	 	83

 
 

EXHIBITS    
    

	EXHIBIT A	 	Form of Global Note	 	A-1
	EXHIBIT B	 	Form of Notation of Guarantee	 	B-1
	EXHIBIT C	 	Form of Indenture Supplement to Add Subsidiary Guarantors	 	C-1

iv

        INDENTURE dated as of April [            ], 2007 among Cimarex Energy Co., a Delaware corporation (the "Company"),
the Subsidiary Guarantors (as defined herein) and U.S. Bank National Association, a national banking association, as trustee (the "Trustee"). 

        The
Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of (i) $300,000,000 in aggregate principal amount of the Company's
[            ]% Senior Notes due 2017, issued on the Issue Date and registered under the Securities Act (the "Initial Notes"), and the
guarantee thereof by the Subsidiary Guarantors and, (ii) if and when issued, an unlimited principal amount of additional [            ]% Senior Notes due 2017 that
may be offered from time to time subsequent to the Issue Date in a registered offering of the Company (the "Additional Notes" and together with the Initial Notes,
the "Notes") and the guarantee thereof by certain of the Company's Subsidiaries. 

        Each
party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders: 

 
 

ARTICLE I    
    
    Definitions and Incorporation by Reference  
    

        SECTION 1.1.    Definitions. 

        "Acquired
Indebtedness" means Indebtedness (1) of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary
or (2) assumed in connection with the acquisition of assets from such Person, in each case whether or not Incurred by such Person in connection with, or in anticipation or contemplation of,
such Person becoming a Restricted Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date
such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of assets. 

        "Additional
Assets" means: 

        (1)   any
property, plant, equipment or other asset (excluding current assets) to be used by the Company or a Restricted Subsidiary in the Oil and Gas Business; 

        (2)   capital
expenditures by the Company or a Restricted Subsidiary in the Oil and Gas Business; 

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

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

        provided, however, that, in the case of clauses (3) and (4), such Restricted Subsidiary is primarily engaged in the Oil and
Gas Business. 

        "Adjusted
Consolidated Net Tangible Assets" means (without duplication), as of the date of determination, the remainder of: 

        (a)   the
sum of: 

          (i)  the
Company's good faith estimate of discounted future net revenues from proved oil and gas reserves of the Company and its Restricted Subsidiaries calculated in
accordance with SEC guidelines before any provincial, territorial, state, Federal or foreign income taxes, as estimated by the Company in a reserve report prepared as of the end of the Company's most
recently completed fiscal year for which audited financial statements are available, as 

 

increased
by, as of the date of determination, the estimated discounted future net revenues from: 

        (A)  estimated
proved oil and gas reserves acquired since such year end, which reserves were not reflected in such year end reserve report, and 

        (B)  estimated
oil and gas reserves attributable to upward revisions of estimates of proved oil and gas reserves since such year end due to exploration, development,
exploitation or other related activities, in each case calculated in accordance with SEC guidelines (utilizing the prices for the fiscal quarter ending prior to the date of determination, 

and
decreased by, as of the date of determination, the estimated discounted future net revenues from: 

        (C)  estimated
proved oil and gas reserves produced or disposed of since such year end, and 

        (D)  estimated
oil and gas reserves attributable to downward revisions of estimates of proved oil and gas reserves since such year end due to changes in geological conditions
or other factors which would, in accordance with standard industry practice, cause such revisions, in each case calculated on a pre-tax basis and substantially in accordance with SEC
guidelines (utilizing the prices for the fiscal quarter ending prior to the date of determination), 

in
each case as estimated by the Company's petroleum engineers or any independent petroleum engineers engaged by the Company for that purpose; 

         (ii)  the
capitalized costs that are attributable to Oil and Gas Properties of the Company and its Restricted Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Company's books and records as of a date no earlier than the date of the Company's latest available annual or quarterly consolidated financial statements; 

        (iii)  the
Net Working Capital on a date no earlier than the date of the Company's latest available annual or quarterly consolidated financial statements; and 

        (iv)  the
greater of: 

        (A)  the
net book value of other tangible assets of the Company and its Restricted Subsidiaries, as of a date no earlier than the date of the Company's latest available
annual or quarterly consolidated financial statements, and 

        (B)  the
appraised value, as estimated by independent appraisers, of other tangible assets of the Company and its Restricted Subsidiaries, as of a date no earlier than the
date of the Company's latest
available audited consolidated financial statements (provided that, the Company may rely on subclause (A) of this clause (iv) if no
appraisal is available or has been obtained); minus 

        (b)   the
sum of: 

          (i)  any
amount included in (a)(i) through (a)(iv) above that is attributable to Minority Interests; 

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

        (iii)  to
the extent included in (a)(i) above, the Company's good faith estimate of discounted future net revenues, calculated in accordance with SEC guidelines (utilizing
the 

2

 

prices
utilized in the Company's year end reserve report), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of the Company and its
Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto); and 

        (iv)  to
the extent included in (a)(i) above, the Company's good faith estimate of discounted future net revenues, calculated in accordance with SEC guidelines, attributable
to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the discounted future net revenues specified in
(a)(i) above, would be necessary to fully satisfy the payment obligations of the Company and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto). 

        If
the Company changes its method of accounting from the full cost method of accounting to the successful efforts or a similar method, "Adjusted Consolidated Net Tangible Assets" will
continue to be calculated as if the Company were still using the full cost method of accounting. 

        "Affiliate"
of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control
with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. 

        "Asset
Disposition" means any direct or indirect sale, lease (other than an operating lease entered into in the ordinary course of business), transfer,
issuance or other disposition, or a series of related sales, leases, transfers, issuances or dispositions that are part of a common plan, of shares of Capital Stock of a Subsidiary (other than
directors' qualifying shares), property or other assets (each referred to for the purposes of this definition as a "disposition") by the Company or any
of its Restricted Subsidiaries, including, without limitation, any disposition by means of a merger, consolidation or similar transaction. 

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

        (1)   a
disposition of property or other assets by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;  provided that in the case of a sale by a
Restricted Subsidiary to another Restricted Subsidiary, the Company directly or indirectly owns an equal or
greater percentage of the Common Stock of the transferee than of the transferor; 

        (2)   the
disposition of cash or Cash Equivalents in the ordinary course of business; 

        (3)   a
disposition of Hydrocarbons or mineral products inventory in the ordinary course of the Oil and Gas Business; 

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

        (5)   transactions
permitted under Article IV; 

        (6)   an
issuance of Capital Stock by a Restricted Subsidiary to the Company or to a Wholly Owned Subsidiary or on a pro rata basis to the holders of the Capital Stock
of such Restricted Subsidiary immediately prior to such issuance; 

        (7)   for
purposes of Section 3.8 only, the making of a Permitted Investment (other than a Permitted Investment to the extent such
transaction is made in exchange for cash or Cash 

3

 

Equivalents
to be received by the Company or its Restricted Subsidiaries) or a disposition subject to Section 3.4; 

        (8)   an
Asset Swap; 

        (9)   dispositions
of properties or assets with an aggregate fair market value not to exceed $5.0 million in any fiscal year of the Company; 

        (10) the
creation of a Permitted Lien and dispositions in connection with Permitted Liens; 

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

        (12) any
surrender or waiver of contract rights or settlement, release or surrender of contract, tort or other claims in the ordinary course of business; 

        (13) the
issuance by a Restricted Subsidiary of Preferred Stock that is permitted by Section 3.3; 

        (14) the
licensing or sublicensing of intellectual property or other general intangibles and licenses, sublicenses, leases or subleases of other property in the ordinary
course of business which do not materially interfere with the business of the Company and its Restricted Subsidiaries; 

        (15) foreclosure
on assets; 

        (16) any
Production Payments and Reserve Sales, provided that any such Production Payments and Reserve Sales, other than
incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to the Company or a
Restricted Subsidiary, shall have been created, Incurred, issued, assumed or Guaranteed
in connection with the acquisition or financing of, and within 60 days after the acquisition of, the property that is subject thereto; 

        (17) the
disposition (whether or not in the ordinary course of the Oil and Gas Business) of oil and/or gas properties or direct or indirect interests in real property;  provided, that at the time of such sale or
transfer such properties do not have associated with them any proved reserves capable of being produced in
material economic quantities; 

        (18) the
sale or transfer (whether or not in the ordinary course of the Oil and Gas Business) of oil and/or gas properties or direct or indirect interests in real property;
provided, that at the time of such sale or transfer such properties do not have associated with them any proved reserves capable of being produced in material economic quantities; 

        (19) the
abandonment, farm-out, exchange, lease or sublease of developed or undeveloped oil and/or gas properties or interests therein in the ordinary course of
business or in exchange for oil and/or gas properties or interests therein owned or held by another Person; and 

        (20) the
disposition of Capital Stock in an Unrestricted Subsidiary. 

        "Asset
Swap" means any trade or exchange by the Company or any Restricted Subsidiary of oil and gas properties or other properties or assets for oil and gas
properties or other properties or assets owned or held by another Person; provided that the fair market value of the properties or assets traded or
exchanged by the Company or such Restricted Subsidiary (together with any cash) is reasonably equivalent to the fair market value of the properties or assets (together with any cash) to be received by
the Company or such Restricted Subsidiary, and provided further that any net cash received must be applied in accordance with Section 3.8 of this Indenture. 

4

 

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

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

        Bankruptcy
Law" means Title 11 of the United States Code or any similar federal or state law for the relief of debtors. 

        "Board
of Directors" means, (i) as to any Person that is a corporation, the board of directors of such Person or any duly authorized committee
thereof, (ii) as to any Person that is a partnership (general or limited), the Board of Directors of a general partner of such partnership or any duly authorized committee thereof, or
(iii) with respect to any other Person, the Person or group of Persons serving a similar function or any duly authorized committee thereof; 

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

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

        "Capital
Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including, without limitation, any Preferred Stock and limited liability company or partnership interests (whether general or limited) of such Person,
but excluding any debt securities (including, without limitation, the Company's Floating Rate Convertible Senior Notes due 2023) convertible into such equity. 

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

        "Cash
Equivalents" means: 

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

        (2)   marketable
general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having a credit rating of at least "A" or the equivalent thereof by either Standard &
Poor's or Moody's (or, if both such 

5

 

rating
agencies cease publishing ratings of such investments, an equivalent rating from a nationally recognized rating agency); 

        (3)   certificates
of deposit, time deposits, eurodollar time deposits, overnight bank deposits or bankers' acceptances having maturities of not more than one year from the
date of acquisition thereof issued by any commercial bank the long term debt of which is rated at the time of acquisition thereof at least "A" or the equivalent thereof by Standard & Poor's or
Moody's (or, if both such rating agencies cease publishing ratings of such investments, an equivalent rating from a nationally recognized rating agency), and having combined capital and surplus in
excess of $500 million; 

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

        (5)   commercial
paper rated at the time of acquisition thereof at least "A-2" or the equivalent thereof by Standard & Poor's or "P-2" or the
equivalent thereof by Moody's (or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of such investments),
and in any case maturing within one year after the date of acquisition thereof; 

        (6)   interests
in any investment company or money market fund which invests 95% or more of its assets in instruments of the type specified in clauses (1)
through (5) above; and 

        (7)   in
the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business. 

        "Change
of Control" means: 

        (1)   any
"person" or "group" of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have "beneficial ownership" of all
shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total
voting power of the Voting Stock of the Company (or its successor by merger, consolidation or purchase of all or substantially all of its assets) (for the purposes of this clause, such
person or group shall be deemed to beneficially own any Voting Stock of the Company held by a parent entity, if such person or group "beneficially owns" (as defined above), directly or
indirectly, more than 35% of the voting power of the Voting Stock of such parent entity); provided, however, that a person or group shall not be deemed
the beneficial owner of (a) any securities tendered pursuant to a tender or exchange offer made by or on behalf of such person or group until such tendered securities are accepted for purchase
or exchange thereunder or (b) any securities the beneficial ownership of which (i) arises solely as a result of a revocable proxy delivered in response to a proxy or consent solicitation
and (ii) is not then reportable on Schedule 13D (or any successor schedule) under the Exchange Act, if applicable; or 

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

6

 

        (3)   the
sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole to any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act); or 

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

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

        "Commodity
Agreement" means any commodity futures contract, commodity swap, commodity option, commodity forward sale or other similar agreement or
arrangement entered into by the Company or any Restricted Subsidiary in respect of Hydrocarbons or other commodities used, produced, processed or sold by such Person that are customary in the Oil and
Gas Business designed to protect the Company or any of its Restricted Subsidiaries against fluctuations in the price of Hydrocarbons or other commodities. 

        "Common
Stock" means with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and
whether voting or nonvoting) of such Person's common stock whether or not outstanding on the Issue Date, and includes, without limitation, all series and classes of such common stock. 

        "Consolidated
Coverage Ratio" means as of any date of determination, with respect to any Person, the ratio of (x) the aggregate amount of Consolidated
EBITDA of such Person for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements are in existence to
(y) Consolidated Interest Expense for such four fiscal quarters, provided, however, that: 

        (1)   if
the Company or any Restricted Subsidiary: 

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

        (b)   has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of the period that is no longer outstanding on such date of determination
or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case, other than Indebtedness Incurred under any
revolving credit facility unless such Indebtedness has been (or will be with the proceeds of such transaction) permanently repaid and the related commitment terminated), Consolidated EBITDA and
Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such discharge of such Indebtedness, including with the proceeds of such new
Indebtedness, as if such discharge had occurred on the first day of such period; 

7

 

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

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

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

        (3)   if
since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) will have made an Investment in any Restricted Subsidiary
(or any Person which becomes a Restricted Subsidiary or is merged with or into the Company) or an acquisition of assets, including, without limitation, any acquisition of assets occurring in
connection with a transaction giving rise to the need to calculate the Consolidated Coverage Ratio, which constitutes all or substantially all of a company, division, operating unit, segment,
business, group of related assets or line of business, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto (including,
without limitation, the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period; and 

        (4)   if
since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) will have Incurred any Indebtedness or discharged any Indebtedness, made any disposition or any Investment or acquisition of assets that would have required an
adjustment pursuant to clause (1), (2) or (3) above if made by the Company or a Restricted Subsidiary during such period, Consolidated EBITDA and Consolidated Interest Expense for
such period will be calculated after giving pro forma effect thereto as if such transaction occurred on the first day of such period. 

        For
purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good
faith by a responsible financial or accounting officer of the Company (including, without limitation, pro forma expense and cost reductions calculated on a basis consistent with
Regulation S-X under the Securities Act). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness
will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months). If any Indebtedness that is being given pro forma effect bears an interest rate at the option
of the Company, the interest rate shall be calculated by applying such optional rate chosen by the Company. 

8

   
        "Consolidated EBITDA" for any period means, without duplication, the Consolidated Net Income for such period, plus the following to the extent deducted in
calculating such Consolidated Net Income or, in the case of clause (7), added in calculating such Consolidated Net Income: 

        (1)   Consolidated
Interest Expense; plus 

        (2)   Consolidated
Income Taxes; plus 

        (3)   consolidated
depletion and depreciation expense; plus 

        (4)   consolidated
amortization expense or impairment charges recorded in connection with the application of Financial Accounting Standard No. 142,  Goodwill and Other Intangibles, and Financial Accounting
Standard No. 144, Accounting for the Impairment or
Disposal of Long Lived Assets; plus 

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

        (6)   consolidated
exploration expense; less 

        (7)   non-cash
items increasing Consolidated Net Income of such Person for such period (excluding any items which represent the reversal of any accrual of, or
reserve for, anticipated cash charges made in any prior period). 

        Notwithstanding
the preceding sentence, clauses (2) through (7) relating to amounts of a Restricted Subsidiary of a Person will be added to or deducted from, as the case
may be, Consolidated Net Income to compute Consolidated EBITDA of such Person only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary was
included in calculating the Consolidated Net Income of such Person and, to the extent the amounts set forth in clauses (2)
through (7) relating to any Non-Guarantor Restricted Subsidiary are in excess of those necessary to offset a net loss of such Non-Guarantor Restricted Subsidiary or if
such Non-Guarantor Restricted Subsidiary has net income for such period included in Consolidated Net Income, only if a corresponding amount would be permitted at the date of determination
to be dividended to the Company by such Non-Guarantor Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Non-Guarantor Restricted Subsidiary or its stockholders. 

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

        "Consolidated
Interest Expense" means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, whether paid
or accrued, plus, to the extent not included in such interest expense and without duplication: 

        (1)   interest
expense attributable to Capitalized Lease Obligations and the interest portion of rent expense associated with Attributable Indebtedness in respect of a
Sale/Leaseback Transaction in respect of the relevant lease giving rise thereto, determined as if such lease were a capitalized lease in accordance with GAAP and the interest component of any deferred
payment obligations; 

9

 

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

        (3)   non-cash
interest expense; 

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

        (5)   the
interest expense on Indebtedness of another Person that is Guaranteed by the Company or one of its Restricted Subsidiaries or secured by a Lien on assets of the
Company or one of its Restricted Subsidiaries; 

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

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

        (8)   the
product of (a) all dividends paid or payable, in cash, Cash Equivalents or Indebtedness or accrued during such period on any series of Disqualified Stock of
such Person or on Preferred Stock of its Restricted Subsidiaries that are not Subsidiary Guarantors payable to a party other than the Company or a Wholly Owned Subsidiary, times (b) a fraction,
the numerator of which is one and the denominator of which is one minus the then current combined federal, state, provincial and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP; 

        (9)   Receivables
Fees; and 

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

        For
purposes of the foregoing, total interest expense will be determined (i) after giving effect to any net payments made or received by the Company and its Subsidiaries with
respect to Interest Rate Agreements and (ii) exclusive of amounts classified as other comprehensive income in the balance sheet of the Company. Notwithstanding anything to the contrary
contained herein, commissions, discounts, yield and other fees and charges Incurred in connection with any securitization transaction, factoring agreement or similar transaction pursuant to which the
Company or its Restricted Subsidiaries may sell, convey or otherwise transfer any accounts receivable or related assets or interests therein shall be included in Consolidated Interest Expense. 

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

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

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

10

 

distribution
(subject, in the case of a dividend or other distribution to a Non-Guarantor Restricted Subsidiary, to the limitations contained in clause (2) below); and 

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

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

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

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

        (3)   any
gain (loss) realized upon the sale or other disposition of any property, plant or equipment of the Company or its consolidated Restricted Subsidiaries (including,
without limitation, pursuant to any Sale/Leaseback Transaction) which is not sold or otherwise disposed of in the ordinary course of business and any gain (loss) realized upon the sale or other
disposition of any Capital Stock of any Person; 

        (4)   any
extraordinary gain or loss; 

        (5)   any
unrealized non-cash gains or losses on charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133); 

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

        (7)   any
asset (including goodwill) impairment or writedown on or related to Oil and Gas Properties under applicable GAAP or SEC guidelines. 

        "Corporate
Trust Office" means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at
the date hereof is located at [            ], Attention: [            ], or such other address as the Trustee may designate from
time to time by
notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by
notice to the Holders and the Company). 

        "Credit
Facility" means, with respect to the Company or any Restricted Subsidiary, one or more credit facilities (including, without limitation, the Senior
Secured Credit Agreement) or commercial paper facilities providing for revolving credit loans, term loans, receivables financing (including, without limitation, through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders against such receivables), letters of credit or other debt obligations, in each case, as amended, restated, modified, renewed,
restructured, supplemented, extended, substituted, refunded, replaced or refinanced in whole or in part from time to time (and whether or not with the original administrative agent and lenders
or another administrative agent or agents or other lenders and whether provided under the original Senior Secured Credit Agreement or any other credit or other 

11

 

agreement
or indenture). For the avoidance of doubt, the term "Credit Facility" does not include the Company's Floating Rate Convertible Senior Notes due 2023. 

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

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

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

        "Definitive
Notes" means certificated securities. 

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

        "Designated
Officer" means, with respect to any Person, the Chief Executive Officer, President or Chief Financial Officer of such Person. 

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

        (1)   matures
or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise; 

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

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

in
each case on or prior to the date that is 91 days after the earlier of (a) the date of the Stated Maturity of the Notes or (b) the first date after the Issue Date on which
there are no Notes outstanding, provided that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or
exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided, further that
any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of
control or asset disposition (each defined substantially consistent with the corresponding definitions in this Indenture) shall not constitute Disqualified Stock if the terms of such Capital Stock
(and all such securities into which it is convertible or for which it is ratable or exchangeable) provide that the Company may not repurchase or redeem any such Capital Stock (and all
such securities into which it is convertible or for
which it is ratable or exchangeable) pursuant to such provision prior to compliance by the Company with the provisions of this Indenture pursuant to Sections 3.8
and 3.10 of this Indenture and such repurchase or redemption complies with Section 3.4 of this Indenture. 

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

        "Domestic
Subsidiary" means any Restricted Subsidiary that is organized under the laws of the United States of America or any state thereof or the
District of Columbia, other than any Restricted Subsidiary that is a Foreign Subsidiary. 

        "Equity
Offering" means a public offering for cash by the Company of its Common Stock, or options, warrants or rights with respect to its Common Stock, other
than (x) public offerings with 

12

 

respect
to the Company's Common Stock, or options, warrants or rights, registered on Form S-4 or S-8, (y) an issuance to any Subsidiary or (z) any
offering of Common Stock issued in connection with a transaction that constitutes a Change of Control. 

        "Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. 

        "Fair
Market Value" means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the Board of Directors or management of the Company (unless otherwise provided in this Indenture) as of the date of contractually agreeing to any
transaction that triggers the requirement to determine the Fair Market Value, which determination will be conclusive for all purposes under this Indenture. 

        "Foreign
Subsidiary" means any Restricted Subsidiary of the Company that (a) is not organized under the laws of the United States of America or
any state thereof or the District of Columbia, or (b) was organized under the laws of the United States of America or any state thereof or the District of Columbia that has no material
assets other than Capital Stock of or other interests in one or more foreign entities of the type described in clause (a) above and is not a guarantor of Indebtedness under the Senior Secured
Credit Agreement. 

        "GAAP"
means generally accepted accounting principles in the United States of America as in effect as of the date of this Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this
Indenture will be computed in conformity with GAAP, except that in the event the Company is acquired in a transaction that is accounted for using purchase accounting, the effects of the application of
purchase accounting shall be disregarded in the calculation of such ratios and other computations contained in this Indenture. 

        "Guarantee"
means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person of the type
described in clauses (1) through (7), (9) and (10) of the definition of "Indebtedness" 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" used as a verb has a corresponding meaning. 

        "Guarantor
Pari Passu Indebtedness" means Indebtedness of a Subsidiary Guarantor that ranks equally in right of payment to such Subsidiary Guarantor's
Subsidiary Guarantee, except as a result of any collateral arrangements in connection with such Indebtedness. 

        "Guarantor
Subordinated Obligation" means, with respect to a Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether outstanding on the
Issue Date or thereafter Incurred) which is expressly subordinated in right of payment to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee pursuant to a written agreement. 

13

 

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

        "Holder"
means a Person in whose name a Note is registered on the Registrar's books. 

        "Hydrocarbons"
means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
constituents, elements or compounds thereof and all products, by-products, and all other substances (whether or not hydrocarbon in nature) produced in connection therewith or refined,
separated, settled or derived therefrom or the processing thereof. 

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

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

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

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

        (3)   the
principal component of all obligations of such Person in respect of letters of credit, bankers' acceptances or other similar instruments (including reimbursement
obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable and such obligation is satisfied within 30 days of Incurrence and excluding
obligations in respect of letters of credit securing obligations (other than the Indebtedness described in clauses (1), (2), (4), (5), (7), (8) or (9) of this definition) entered
into in the ordinary course of business to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, to the extent such drawing is reimbursed within 10 days
following payment on the letter of credit); 

        (4)   the
principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), which purchase price is due
more than six months after the date of placing such property in service or taking delivery and title thereto; 

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

        (6)   the
principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary that is not a Subsidiary Guarantor, any Preferred Stock (but excluding, in each case, any accrued dividends); 

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

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

        (9)   to
the extent not otherwise included in this definition, net obligations of such Person under Hedging Obligations (the amount of any such obligations to be equal
at any time to the 

14

 

termination
value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time); and 

        (10) to
the extent not otherwise included in this definition, the amount of obligations outstanding under the legal documents entered into as part of a securitization
transaction or series of transactions that would be characterized as principal if such transaction were structured as a secured lending transaction rather than as a purchase outstanding relating to a
securitization transaction or series of transactions. 

        The
amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date. Notwithstanding the foregoing, money borrowed and set aside at the time of the Incurrence of
any Indebtedness in order to pre-fund the payment of interest on such Indebtedness shall not be deemed to be "Indebtedness",  provided that such money is held to secure the payment of
such interest. 

        In
addition, "Indebtedness" of any Person shall include Indebtedness described in the preceding paragraph that would not appear as a liability on the balance sheet of such
Person if: 

        (1)   such
Indebtedness is the obligation of a partnership or joint venture that is not a Restricted Subsidiary (a "Joint Venture"); 

        (2)   such
Person or a Restricted Subsidiary of such Person is a general partner of the Joint Venture (a "General Partner"); and 

        (3)   there
is recourse, by contract or operation of law, with respect to the payment of such Indebtedness to property or assets of such Person or a Restricted Subsidiary of
such Person; and then such Indebtedness shall be included in an amount not to exceed: 

        (a)   the
lesser of (i) the net assets of the General Partner and (ii) the amount of such obligations to the extent that there is recourse, by contract or
operation of law, to the property or assets of such Person or a Restricted Subsidiary of such Person; or 

        (b)   if
less than the amount determined pursuant to clause (a) immediately above, the actual amount of such Indebtedness that is recourse to such Person or a
Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a writing and is for a determinable amount. 

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

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

        "Investment"
means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any direct or indirect
advance, loan (other than advances or extensions of credit to customers in the ordinary course of business) or other extensions of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property (valued at the
fair market value thereof as of the date of transfer) to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by, such other Person and 

15

 

all
other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that none of the following
will be deemed to be an Investment: 

        (1)   Hedging
Obligations entered into in the ordinary course of business and in compliance with this Indenture; 

        (2)   endorsements
of negotiable instruments and documents in the ordinary course of business; and 

        (3)   an
acquisition of assets, Capital Stock or other securities by the Company or a Subsidiary for consideration to the extent such consideration consists of Capital Stock
of the Company (other than Disqualified Stock). 

        For
purposes of Section 3.4, 

        (1)   "Investment"
will include the portion (proportionate to the Company's equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the
fair market value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary, unless such Restricted Subsidiary, at the time
of such designation, has total assets of $1,000 or less, in which case no Investment shall be deemed to occur as a result of such designation; provided,
however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (a) the Company's "Investment" in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the net assets (as conclusively determined by the Board of Directors of the Company in good faith) of such Subsidiary
at the time that such Subsidiary is so re-designated a Restricted Subsidiary; 

        (2)   any
property transferred to or from an Unrestricted Subsidiary will be valued at its fair market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors of the Company; and 

        (3)   the
amount of any Investment shall not be adjusted for increases or decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment. 

        "Investment
Grade Rating" means a rating equal to or higher than (1) Baa3 (or the equivalent) with a stable or better outlook by Moody's and
(2) BBB- (or the equivalent) with a stable or better outlook by Standard & Poor's; or if either such entity ceases to rate Notes for reasons outside of the Company's
control, the equivalent investment grade rating from another nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company. 

        "Issue
Date" means April [            ], 2007. 

        "Lien"
means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof). 

        "Minority
Interest" means the percentage interest represented by any shares of stock of any class of Capital Stock of a Restricted Subsidiary that are not
owned by the Company or a Restricted Subsidiary. 

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

        "Net
Available Cash" from an Asset Disposition means cash payments received by the Company or any Restricted Subsidiary of the Company (including, without
limitation, any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any
securities received as consideration, but only as 

16

 

and
when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are
the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of: 

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

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

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

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

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

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

        "Net
Working Capital" means (a) all current assets of the Company and its Restricted Subsidiaries except current assets from Commodity Agreements,
less (b) all current liabilities of the Company and its Restricted Subsidiaries, except current liabilities included in Indebtedness and any current liabilities from Commodity Agreements, in
each case as set forth in the consolidated financial statements of the Company prepared in accordance with GAAP. 

        "Non-Guarantor
Restricted Subsidiary" means any Restricted Subsidiary that is not a Subsidiary Guarantor. 

        "Non-Recourse
Debt" means Indebtedness of a Person: 

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

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

17

  

        (3)   the
explicit terms of which provide there is no recourse against any of the assets of the Company or its Restricted Subsidiaries. 

        "Note
Register" means the register of Notes, maintained by the Registrar, pursuant to Section 2.3. 

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

        "Officer"
means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or the
Secretary of the Company. Officer of any Subsidiary Guarantor has a correlative meaning. 

        "Officers'
Certificate" means a certificate signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company. 

        "Oil
and Gas Business" means (a) the business of acquiring, exploring, exploiting, developing, producing, operating, hedging, swapping and disposing
of interests in oil, gas, liquid natural gas and other Hydrocarbon properties and assets, (b) the business of gathering, marketing, treating, processing, storage, refining, selling, hedging,
swapping and transporting of any production from such interests, properties or assets (or interests, properties or assets of others) and products produced in association therewith,
(c) any business or activity relating to, arising from, or necessary, appropriate, incidental, ancillary or complementary to the activities described in the foregoing clauses (a)
and (b) of this definition. 

        "Oil
and Gas Properties" means all properties, including equity or other ownership interests therein, owned by such Person which contain "proved oil and gas
reserves" as defined in Rule 4-10 of Regulation S-X of the Securities Act. 

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

        "Pari Passu
Indebtedness" means Indebtedness that ranks equally in right of payment to the Notes without regard to any collateral arrangements in
connection with such Indebtedness. 

        "Permitted
Business Investment" means any Investment made in the ordinary course of the business of the Company or any Restricted Subsidiary or that is of a
nature that is or shall have become customary in, the Oil and Gas Business including, without limitation, investments or expenditures for exploiting, exploring for, acquiring, developing, producing,
processing, refining, gathering, marketing or transporting Hydrocarbons through agreements, transactions, interests or arrangements which permit one to share or transfer risks or costs, comply with
regulatory requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of the Oil and Gas Business jointly with third parties, including, without
limitation: 

        (1)   ownership
interests in oil, gas or other Hydrocarbon or mineral properties and interests therein, liquid natural gas facilities, drilling operations, processing
facilities, refineries, gathering systems, pipelines, storage facilities, related systems or facilities, ancillary real property interests, and interests therein; 

        (2)   Investments
in the form of or pursuant to oil and/or gas leases, mineral leases, overriding royalty agreements, net profits agreements, production payment agreements,
royalty trust agreements, incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to
the Company or any Restricted Subsidiary, operating agreements, farm-in agreements, farm-out agreements, division orders, participation agreements, master limited partnership
agreements, limited liability company agreements, contracts for the sale, purchase, exchange, transportation, gathering, processing, marketing or storage of Hydrocarbons, communitizations,
declarations, 

18

 

orders
and agreements, production sales contracts, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic
or geophysical permits or agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling agreements, joint bidding agreements, service contracts, joint venture
agreements, partnership agreements (whether general or limited), subscription agreements, stock purchase agreements and other similar agreements (including for limited liability companies) with third
parties, working interest, royalty interests and mineral leases, and other agreements which are customary in the Oil and Gas Business; 

        (3)   Investments
of operating funds on behalf of co-owners of properties pursuant to operating agreements; and 

        (4)   direct
or indirect ownership interests in drilling rigs and related equipment, including, without limitation, transportation equipment. 

        "Permitted
Investment" means an Investment by the Company or any Restricted Subsidiary in or pursuant to: 

        (1)   the
Company, a Restricted Subsidiary or a Person which will, upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is the Oil and Gas Business; 

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

        (3)   cash
and Cash Equivalents; 

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

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

        (6)   relocation
allowances for, and loans or advances to, employees, officers or directors of the Company or any Restricted Subsidiary in the ordinary course of business
consistent with past practices in an aggregate amount not in excess of $2.0 million with respect to all loans or advances made since the Issue Date (without giving effect to the forgiveness of
any such loan); 

        (7)   Capital
Stock, obligations or securities received in settlement or compromise of debts created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary, in settlement or compromise of litigation, arbitration or other disputes with Persons that are not Affiliates of the Company or any Restricted Subsidiary, in satisfaction of
judgments or arbitration awards, or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor; 

        (8)   Investments
made as a result of the receipt of non-cash consideration from an Asset Disposition that was made pursuant to and in compliance with
Section 3.8 or from a disposition of assets permitted under this Indenture and not constituting an Asset Disposition; 

        (9)   any
Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection on behalf of the Company or any Restricted Subsidiary
and lease, 

19

 

utility
and workers' compensation, performance and other similar deposits made in the ordinary course of business by the Company or any Restricted Subsidiary; 

        (10) Investments
in existence on the Issue Date or made pursuant to agreements or commitments in effect on the Issue Date, and any amendment, modification, restatement,
supplement, extension, renewal, refunding, replacement or refinancing, in whole or in part thereof; 

        (11) Currency
Agreements, Interest Rate Agreements, Commodity Agreements and related Hedging Obligations, which transactions or obligations are Incurred in compliance with
Section 3.3; 

        (12) Investments
by the Company or any of its Restricted Subsidiaries, together with all other Investments pursuant to this clause (12) outstanding on the date such
Investment is made, in an aggregate amount at the time of such Investment not to exceed the greater of (i) $10.0 million, and (ii) 0.5% of Adjusted Consolidated Net Tangible
Assets (determined as of the date of the making of any such Investment), outstanding at any one time (with the fair market value of such Investment being measured at the time made and without giving
effect to subsequent changes in value); 

        (13) Guarantees
issued in accordance with Section 3.3; 

        (14) any
Asset Swap; and 

        (15) Investments
in property, plant and equipment used in the ordinary course of business of the Company or any Restricted Subsidiary and Permitted Business Investments. 

        In
order to be a Permitted Investment, an Investment need not be permitted solely by one subsection of this definition but may be permitted in part by one such subsection and in part by
one or more other subsections of this definition. 

        "Permitted
Liens" means, with respect to any Person: 

        (1)   Liens
securing Indebtedness and other obligations under, and related Hedging Obligations and Liens on property and assets of Restricted Subsidiaries securing Guarantees
of Indebtedness and other obligations of the Company under, any Credit Facility permitted to be Incurred under this Indenture under the provisions described in
Section 3.3(b)(1); 

        (2)   pledges
or deposits or other security made or provided by such Person under workers' compensation laws, unemployment insurance laws or similar legislation, or
good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public, regulatory or
statutory obligations of such Person or deposits of cash or Cash Equivalents to secure performance, surety, appeal or similar bonds to which such Person is a party, or deposits as security for
contested taxes or import or customs duties or for the payment of rent, or any Lien securing letters of credit, bankers' acceptances or completion guarantees described in
Section 3.3(b)(8), in each case Incurred in the ordinary course of business; 

        (3)   Liens
imposed by law, including, without limitation, carriers', warehousemen's, suppliers', mechanics', materialmen's, repairmen's and similar Liens arising in the
ordinary course of business; 

        (4)   Liens
for taxes, assessments or other governmental charges not yet subject to penalties for non-payment or which are being contested in good faith by
appropriate negotiations or proceedings provided appropriate reserves required pursuant to GAAP have been made in respect thereof; 

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

20

 

        (6)   survey
exceptions, encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and
telephone lines, gathering systems, pipelines and other similar purposes, or zoning, building codes, surface leases or surface access agreements and other similar rights in respect of surface
operations, or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or liens incidental to the conduct
of the business of such Person or to the ownership of its properties
which do not in the aggregate materially impair the use of such properties in the operation of the business of such Person or the value of such property for the purpose of such business; 

        (7)   Liens
securing Hedging Obligations so long as the related Indebtedness is, and is permitted under this Indenture to be secured by a Lien; 

        (8)   leases,
licenses, subleases and sublicenses of property and assets (including, without limitation, real property, personal property and intellectual property rights)
which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries; 

        (9)   judgment
Liens; provided that any such judgment Lien (i) has not and does not, together with other judgment Liens,
give rise to an Event of Default and (ii) is adequately bonded (or any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor) and any
appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has
not expired; 

        (10) Liens
for the purpose of securing Indebtedness represented by Capitalized Lease Obligations, mortgage financings, purchase money obligations or other payments Incurred
to finance all or any part of the purchase price or cost of construction or improvement of assets or property (other than Capital Stock or other Investments) acquired, constructed or improved in the
ordinary course of business; provided that: 

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

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

        (11) Liens
arising solely by virtue of any statutory or common law provisions relating to banker's Liens, rights of set-off or similar rights and remedies as to
deposit accounts or other funds maintained with a depositary institution; provided that: 

        (a)   such
deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board; and 

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

        (12) Liens
arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the
ordinary course of business; 

        (13) Liens
existing on the Issue Date (other than Liens permitted under clause (1)); 

21

 

        (14) Liens
on property, assets or Capital Stock of a Person at the time such Person becomes a Restricted Subsidiary; provided,
however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary;  provided further, however, that any such Lien may not extend to any other property or assets owned by the Company or any Restricted Subsidiary;
 

        (15) Liens
on property, assets or Capital Stock of a Person at the time the Company or a Restricted Subsidiary acquired the property, asset or Capital Stock, including any
acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that such Liens are not
created, Incurred or assumed in connection with, or in contemplation of, such acquisition; provided further, however, that such Liens may not extend to
any other property or asset owned by the Company or any Restricted Subsidiary; 

        (16) Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or a Wholly Owned Subsidiary; 

        (17) Liens
securing the Notes and Subsidiary Guarantees; 

        (18) Liens
securing Refinancing Indebtedness Incurred to refinance, refund, replace, amend, extend or modify, as a whole or in part, Indebtedness that was previously so
secured pursuant to clauses (10), (13), (14), (15), (17) and (18) of this definition, provided that any such Lien is limited to all
or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the
original Lien arose, could secure) the Indebtedness being refinanced, refunded, replaced, amended, extended or modified
or is in respect of any Capital Stock, property or asset that is the security for a Permitted Lien hereunder; 

        (19) any
interest or title of a lessor under any Capitalized Lease Obligation or operating lease; 

        (20) Liens
under industrial revenue, municipal or similar bonds; 

        (21) Liens
in respect of Production Payments and Reserve Sales, which Liens shall be limited to the property or interest that is the subject of such Production Payments and
Reserve Sales; 

        (22) Liens
arising under or in connection with oil and/or gas leases, mineral leases, overriding royalty agreements, net profits agreements, production payment agreements,
royalty trust agreements, incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to
the Company or any Restricted Subsidiary, farm-out agreements, farm-in agreements, division orders, participation agreements, partnership agreements (general and limited),
master limited partnership agreements, limited liability company agreements, joint venture agreements, contracts for the sale, purchase, exchange, transportation, gathering, processing, marketing or
storage of Hydrocarbons, unitizations, communitizations, and pooling designations, declarations, orders and agreements, development agreements, operating agreements, production sales contracts, area
of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical
permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided, however, in all instances that such Liens are
limited to the property or assets that are the subject of the relevant agreement, program, designation, declaration, order or contract; 

        (23) Liens
on pipelines or pipeline facilities that arise by operation of law; 

        (24) Liens
on funds held in trust for or on behalf of third parties; 

        (25) Liens
in respect of rights of netting, offset and setoff Incurred in the ordinary course of business; 

22

 

        (26) deposits,
escrows or pledges to secure obligations under purchase and sale agreements and Liens arising under contracts for the sale, purchase or exchange of any
Capital Stock, property or asset pending the closing of such transaction; 

        (27) Liens
in respect of the financing of insurance premiums and deposits as security for the payment of insurance-related obligations (including, without limitation, in
respect of deductibles, self-insured retention amounts and premiums and adjustments thereto); 

        (28) conditional
sale, title retention, consignment or similar arrangements for the sale of goods or services entered into in the ordinary course of business; 

        (29) Liens
on property of an Unrestricted Subsidiary at the time that it is designated as a Restricted Subsidiary pursuant to the definition of "Unrestricted Subsidiary;"  provided that such Liens were not incurred
in connection with, or contemplation of, such designation; 

        (30) encumbrances
and restrictions permitted to exist pursuant to Section 3.7; and 

        (31) Liens
securing Indebtedness (other than Subordinated Obligations and Guarantor Subordinated Obligations) in an aggregate principal amount at any time outstanding not to
exceed $15.0 million. 

        "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 thereof or any other entity. 

        "Preferred
Stock," as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to
the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of
such Person. 

        "Production
Payments and Reserve Sales" means the grant or transfer by the Company or a Restricted Subsidiary to any Person of a royalty, overriding royalty,
revenue interest, net revenue interest, net profits interest, reversionary interest, production payment (including, without limitation, Volumetric Production Payments and Dollar-Denominated Production
Payments), partnership or other interest in oil and gas properties or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such
properties where the holder of such interest has recourse solely to such production or proceeds of production, subject to the obligation of the grantor or transferor to operate and maintain, or cause
the subject interests to be operated and maintained in a reasonably prudent manner or other customary standard or subject to the obligation of the grantor or
transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including, without limitation, any such grants or transfers pursuant to incentive compensation
programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists or other providers of technical services to the Company or a Restricted Subsidiary. 

        "Rating
Agencies" means Standard & Poor's and Moody's or if Standard & Poor's or Moody's or both shall not make a rating on the Notes publicly
available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as evidenced by a resolution of the Board of Directors) which shall be
substituted for Standard & Poor's or Moody's or both, as the case may be. 

        "Receivable"
means a right to receive payment arising from a sale or lease of goods or the performance of services by a Person pursuant to an arrangement
with another Person pursuant to which such other Person is obligated to pay for goods or services under terms that permit the purchase of such goods and services on credit and shall include, in any
event, any items of property that would be classified as an "account," "chattel paper," "payment intangible" or "instrument" under the 

23

 

Uniform
Commercial Code as in effect in the State of New York and any "supporting obligations" as so defined. 

        "Receivables
Fees" means any fees or interest paid to purchasers or lenders providing the financing in connection with a securitization transaction,
factoring agreement or other similar agreement, including, without limitation, any such amounts paid by discounting the face amount of Receivables or participations therein transferred in connection
with a securitization transaction, factoring agreement or other similar arrangement, regardless of whether any such transaction is structured as on-balance sheet or off-balance
sheet or through a Restricted Subsidiary or an Unrestricted Subsidiary. 

        "Refinancing
Indebtedness" means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, prepay, purchase, redeem, retire, repay or
extend (including, without limitation, pursuant to any defeasance or discharge mechanism) (collectively, "refinance," "refinances" and "refinanced" shall each have a correlative meaning) any
Indebtedness existing on the date of this Indenture or Incurred in compliance with this Indenture (including, without limitation, Indebtedness of the Company that refinances Indebtedness of any
Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of another Restricted Subsidiary) including, without limitation, Indebtedness that refinances
Refinancing Indebtedness, provided, however, that: 

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

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

        (3)   such
Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to
or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding or committed of the Indebtedness being
refinanced (plus, without duplication, any additional Indebtedness Incurred to pay accrued interest and fees and expenses Incurred in connection therewith, including, without limitation, any premium
and defeasance costs); and 

        (4)   if
the Indebtedness being refinanced is subordinated in right of payment to the Notes or the Subsidiary Guarantee, such Refinancing Indebtedness is subordinated in right
of payment to the Notes or the Subsidiary Guarantee on terms that, in the good faith reasonable determination of the Company or the applicable Restricted Subsidiary are at least as favorable to the
holders as those contained in the documentation governing the Indebtedness being refinanced. 

        "Responsible
Officer" shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject and
who shall have direct responsibility for the administration of this Indenture. 

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

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

24

 

        "Sale/Leaseback
Transaction" means an arrangement relating to property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the
Company or a Restricted Subsidiary leases it from such Person within 90 days after the date of the transfer to such Person. 

        "SEC"
means the United States Securities and Exchange Commission. 

        "Securities
Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. 

        "Senior
Secured Credit Agreement" means the Amended and Restated Credit Agreement dated as of June 13, 2005 among the Company, the lenders from time
to time party thereto, JPMorgan Chase Bank, N.A., as an LC Issuer and as Administrative Agent, U.S. Bank National Association and Bank of America, N.A., as Co-Syndication Agents,
and Wells Fargo Bank, N.A., as Documentation Agent, including, without limitation, any related notes, guarantees, collateral documents, instruments and agreements entered into in connection therewith,
in each case, as the same may be amended, restated, modified, renewed, restructured, supplemented, extended, substituted, refunded, replaced or refinanced in whole or in part from time to time
(including, without limitation, increasing the amount loaned thereunder, provided that such additional Indebtedness is Incurred in accordance with
Section 3.3, extending the maturity of any Indebtedness Incurred thereunder or contemplated thereby or deleting, adding or substituting one or more parties thereto
(whether or not such added or substituted parties are banks or other institutional lenders)); provided that a Senior Secured Credit Agreement shall not
(1) include Indebtedness issued, created or Incurred pursuant to a registered offering of securities under the Securities Act or a private placement of securities (including under
Rule 144A or Regulation S) pursuant to an exemption from the registration requirements of the Securities Act or (2) relate to Indebtedness that does not consist exclusively of
Pari Passu Indebtedness or Guarantor Pari Passu Indebtedness. 

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

        "Standard &
Poor's" means Standard & Poor's, a division of the McGraw-Hill Companies, Inc. 

        "Stated
Maturity" means, with respect to any security or Indebtedness, the date specified in such security or Indebtedness as the fixed date on which the
payment of principal of such security or Indebtedness is due and payable, including, without limitation, 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. 

        "Subordinated
Obligation" means any Indebtedness of the Company (whether outstanding on the Issue Date or thereafter Incurred) which is subordinated or
junior in right of payment to the Notes pursuant to a written agreement. 

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

25

   
        "Subsidiary Guarantee" means, individually, any Guarantee of payment of the Notes by a Subsidiary Guarantor pursuant to the terms of this Indenture and any
supplemental indenture thereto, and, collectively, all such Guarantees. Each such Subsidiary Guarantee shall be executed and delivered pursuant to the terms of this Indenture and any supplemental
indenture (including pursuant to a supplemental indenture substantially in the form of Exhibit C). 

        "Subsidiary
Guarantor" means each Restricted Subsidiary (other than a Foreign Subsidiary) in existence on the Issue Date that provides a Subsidiary Guarantee
on the Issue Date and any other Restricted Subsidiary (other than a Foreign Subsidiary) that provides a Subsidiary Guarantee in accordance with this Indenture,  provided that upon release or discharge of
any such Restricted Subsidiary from its Subsidiary Guarantee in accordance with this Indenture, such
Restricted Subsidiary shall cease to be a Subsidiary Guarantor. 

        "TIA"
or "Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
§§ 77aaa-77bbbb), as in effect from time to time. 

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

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

        "Unrestricted
Subsidiary" means: 

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

        (2)   any
Subsidiary of an Unrestricted Subsidiary. 

        The
Board of Directors of the Company may designate any Subsidiary of the Company (including, without limitation, any newly acquired or newly formed Subsidiary or a Person becoming a
Subsidiary through merger or consolidation or Investment therein) to be an Unrestricted Subsidiary only if on the date such Subsidiary is designated an Unrestricted Subsidiary: 

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

        (2)   all
the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of designation, and will at all times thereafter, consist of
Non-Recourse Debt; 

        (3)   such
designation and the Investment of the Company in such Subsidiary complies with Section 3.4; 

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

        (5)   such
Subsidiary is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation: 

        (a)   to
subscribe for additional Capital Stock of such Person; or 

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

26

 

        (6)   on
the date such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary with terms materially less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable
transaction at the time of such transaction in arm's-length dealings with a Person who is not an Affiliate of the Company. 

        Any
such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a resolution of the Board of Directors of the Company giving
effect to such designation and an Officers' Certificate certifying that such designation complies with the foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed
to be Incurred as of such date. 

        The
Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately
after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof and the Company could Incur at least $1.00 of
additional Indebtedness pursuant to Section 3.3(a) on a pro forma basis taking into account such designation. 

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

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

        "Voting
Stock" of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors,
managers or trustees, as applicable. 

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

27

 

        In
addition to the terms defined above, the following terms are defined in this Indenture where indicated below: 

	Term
 
	 	Defined

in Section
	 
	"Actual Knowledge"	 	7.2	(g)
	"Additional Notes"	 	Recitals	 
	"Affiliate Transaction"	 	3.9	(a)
	"Agent Members"	 	2.1	(e)
	"Asset Disposition Offer"	 	3.8	(b)
	"Asset Disposition Offer Amount"	 	3.8	(c)
	"Asset Disposition Offer Period"	 	3.8	(c)
	"Asset Disposition Purchase Date"	 	3.8	(c)
	"Authenticating Agent"	 	2.2	 
	"bankruptcy provisions	 	6.1	(7)
	"Change of Control Offer"	 	3.10	(b)
	"Change of Control Payment"	 	3.10	(b)
	"Change of Control Payment Date"	 	3.10	(b)
	"Company"	 	Introductory paragraph	 
	"Company Order"	 	2.2	 
	"Covenant Defeasance"	 	8.2	(a)
	"cross acceleration provision	 	6.1	(6)
	"Defaulted Interest"	 	2.11	 
	"Event of Default"	 	6.1	 
	"Excess Proceeds"	 	3.8	(b)
	"Global Note"	 	2.1	(b)
	"Initial Notes"	 	Recitals	 
	"judgment default provision"	 	6.1	(9)
	"legal defeasance"	 	8.2	(a)
	"Legal Holiday"	 	11.8	 
	"Notes"	 	Recitals	 
	"Note Register"	 	2.3	 
	"Obligations"	 	10.1	 
	"Pari Passu Notes"	 	3.8	(b)
	"Paying Agent"	 	2.3	 
	"payment default"	 	6.1	(6)
	"protected purchaser"	 	2.7	 
	"Redemption Date"	 	5.3	 
	"Registrar"	 	2.3	 
	"Reinstatement Date"	 	3.15	(b)
	"Restricted Payment"	 	3.4	(a)
	"Special Interest Payment Date"	 	2.11	(a)
	"Special Record Date"	 	2.11	(a)
	"Successor Company"	 	4.1(a)(i)	 
	"Suspended Covenants"	 	3.15	(a)
	"Suspension Period"	 	3.15	(b)
	"Trustee"	 	Introductory Paragraph	 

28

 

        SECTION 1.2.    Incorporation
by Reference of Trust Indenture Act. This Indenture is subject to the mandatory provisions of the TIA which
are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings: 

        "Commission"
means the SEC. 

        "indenture
notes" means the Notes. 

        "indenture
security holder" means a Holder. 

        "indenture
to be qualified" means this Indenture. 

        "indenture
trustee" or "institutional trustee" means the Trustee. 

        "obligor"
on notes means the Company and any other obligor on the Notes. 

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

        SECTION 1.3.    Rules
of Construction. Unless the context otherwise requires: 

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

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

        (3)   "or"
is not exclusive; 

        (4)   "including"
means including without limitation; 

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

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

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

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

        (9)   all
references to the date the Notes were originally issued shall refer to the Issue Date or the date any Additional Notes were originally issued, as the case
may be; 

        (10) references
to sections of or rules under the Securities Act or the Exchange Act, as the case may be, will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time; 

        (11) "$"
and "U.S. dollars" each refer to United States dollars, or such other money of the United States of America that at the time of payment is
legal tender for payment of public and private debts; and 

        (12) all
references herein to particular Sections or Articles shall refer to this Indenture unless otherwise so indicated. 

29

  

 
 

ARTICLE II    
    
    The Notes  
    

        SECTION 2.1.    Form, Dating and Terms. (a) The aggregate principal amount of Notes that may be authenticated
and delivered under this Indenture is unlimited. The Initial Notes issued on the date hereof will be in an aggregate principal amount of $300,000,000. In addition, the Company may issue, from time to
time in accordance with the provisions of this Indenture, including, without limitation, Section 3.3(a) hereof, Additional Notes. Furthermore, Notes may be
authenticated and delivered upon registration or transfer, or in lieu of, other Notes pursuant to Section 2.6, 2.7,
2.9 or 9.5 or in connection with an Asset Disposition Offer pursuant to Section 3.8 or a
Change of Control Offer pursuant to Section 3.10. 

        The
Notes shall be known and designated as "[            ]% Senior Notes due 2017" of the Company. 

        With
respect to any Additional Notes, the Company shall set forth in (a) a Board Resolution and (b)(i) an Officers' Certificate or (ii) one or more indentures supplemental
hereto, the following information: 

          (i)  the
aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; 

         (ii)  the
issue price and the issue date of such Additional Notes; and 

        (iii)  that
such Additional Notes are registered under the Securities Act and shall be issued substantially in the form of Exhibit A hereto. 

        The
Initial Notes and the Additional Notes shall be considered collectively as a single class for all purposes of this Indenture. Holders of the Initial Notes and the Additional Notes
shall vote and
consent together on all matters to which such Holders are entitled to vote or consent as one class, and none of the Holders of the Initial Notes or the Additional Notes shall have the right to vote or
consent as a separate class on any matter to which such Holders are entitled to vote or consent. 

        (b)   The
Initial Notes are being offered and sold by the Company pursuant to an Underwriting Agreement, dated April [            ], 2007, among the
Company, the Subsidiary Guarantors, J.P. Morgan Securities Inc., Lehman Brothers Inc., Calyon Securities (USA) Inc., Deutsche Bank Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Raymond James & Associates, Inc. and UBS Securities LLC. Additional Notes offered after the date hereof may be offered and sold by the Company
from time to time pursuant to one or more purchase agreements in accordance with applicable law. 

        Initial
Notes and Additional Notes offered and sold under this Indenture shall be issued in the form of one or more permanent global Notes substantially in the form of Exhibit A
(each, a "Global Note"), which is hereby incorporated by reference and made a part of this Indenture, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. A Global Note may be represented by more than one certificate, if so required by the Depositary's rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as
hereinafter provided. 

        The
principal of, 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 Borough of Manhattan, 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 2.3; provided,
however, that, at the option of the Company, each installment of interest may be paid by (i) check mailed to addresses of the Persons entitled thereto as such addresses
shall appear on the Note Register or (ii) wire transfer to an account located in the United States 

30

 

maintained
by the payee. Payments in respect of Notes represented by a Global Note registered in the name of or held by the Depositary or its nominee (including principal, premium, if any, and
interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Depositary. Payments in respect of Notes represented by Definitive Notes (including principal,
premium, if any, and interest) held by a Holder of at least $1,000,000 aggregate principal amount of Notes represented by Definitive Notes shall 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). 

        Each
Global Note shall be in the form of Exhibit A. 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 and in Section 2.1(d). The Company shall approve the forms of the
Notes and any notation,
endorsement or legend on them. Any such notation, endorsement or legend shall be furnished to the Trustee in writing. Each Note shall be dated the date of its authentication. The terms of the Notes
set forth in Exhibit A 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. 

        (c)   Denominations.    The
Notes shall be issuable only in fully registered form, without coupons, and only in denominations of $2,000
or integral multiples of $1,000 in excess thereof. 

        (d)   Depositary
Legend.    Each Global Note, 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 SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF." 

        (e)   Book-Entry
Provisions.    (i) This Section 2.1(e) shall apply only to Global Notes
deposited with the Notes Custodian with respect to such Notes (as appointed by the Depositary), or any successor Person thereto, which shall initially be the Trustee. 

         (ii)  Each
Global Note initially shall (x) be registered in the name of the Depositary for such Global Note or the nominee of such Depositary, (y) be delivered
to the Notes Custodian for such Depositary and (z) bear the legend set forth in Section 2.1(d). 

        (iii)  Members
of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Note
held on their behalf by the 

31

 

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

        (iv)  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. 

         (v)  In
connection with any transfer of a portion of the beneficial interest in a Global Note pursuant to subsection (f) of this
Section 2.1 to beneficial owners who are required to hold Definitive Notes, the Trustee 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. 

        (vi)  In
connection with the transfer of an entire Global Note to beneficial owners pursuant to subsection (f) of this Section, 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 the Depositary in exchange for its
beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. 

       (vii)  Any
Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interests in such Global Note may be effected only through a
book-entry system maintained by (a) the Holder of such Global Note (or its agent) or (b) any Holder of a beneficial interest in such Global Note, and that ownership of
a beneficial interest in such Global Note shall be required to be reflected in a book entry. 

        (f)    Definitive
Notes.    Except as provided below, owners of beneficial interests in Global Notes shall 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 the Depositary's and the Registrar's procedures. In addition, Definitive Notes shall be delivered to all beneficial owners in exchange for their beneficial
interests in a Global Note if (i) the Depositary notifies the Company that it is unwilling or unable to continue as depositary for such Global Note or the Depositary ceases to be a clearing
agency registered under the Exchange Act, at a time when the Depositary 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, (ii) the Company executes and delivers to the Trustee and Registrar an Officers' Certificate stating that such Global Note shall be so
exchangeable or (iii) an Event of Default has occurred and is continuing and the Registrar has received a request from the Depositary to deliver Definitive Notes to all beneficial owners in
exchange for their beneficial interests in a Global Note. 

        (g)   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 

32

 

representing
the principal amount not so transferred and the relevant Global Note shall be increased by an adjustment made on the records of the Trustee and the Depositary. 

        SECTION 2.2.    Execution
and Authentication. Two Officers shall sign the Notes for 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. 

        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. 

        At
any time and from time to time after the execution and delivery of this Indenture, the Trustee shall authenticate and make available for delivery: (1) Initial Notes for
original issue on the Issue Date in an aggregate principal amount of $300,000,000 and (2) subject to the terms of this Indenture, Additional Notes for original issue in an unlimited principal
amount, in each case upon a written order of the Company signed by two Officers or by an Officer and 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
Additional Notes. 

        The
Trustee may (at the expense of the Company) 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 such agent. 

        In
case the Company, pursuant to Article IV shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the
Company shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the
Trustee pursuant to Article IV, any of the Notes authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition
may, from time to time, at the request of the successor Person, be exchanged for other Notes executed in the name of the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Notes surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Notes as specified in such order for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any new name of a successor Person pursuant to
this Section 2.2 in exchange or substitution for or upon registration of transfer of any Notes, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Notes at the time outstanding for Notes authenticated and delivered in such new name. 

        SECTION 2.3.    Registrar
and Paying Agent. The Company shall maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where Notes may be presented for payment (the "Paying
Agent"). The 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 Registrar shall
keep a register of the Notes and of their transfer and exchange (the "Note Register"). The Company may have one registrar 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 or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the 

33

 

Trustee
in writing 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 7.7. The Company or any of its Wholly Owned Subsidiaries that is a Domestic Subsidiary may act as Paying Agent
or Registrar. 

        The
Company initially appoints the Trustee as Notes Custodian, Registrar and Paying Agent for the Notes. The Company may remove any Notes Custodian, Registrar or Paying Agent upon
written notice to such Notes Custodian, Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective
until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Notes Custodian, Registrar or Paying Agent, as the
case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Notes Custodian, Registrar or Paying Agent until the appointment of a successor in
accordance with clause (i) above. The Notes Custodian, Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee. 

        SECTION 2.4.    Paying
Agent To Hold Money in Trust. By no later than 10:00 a.m. (New York City time) on the date on which any
principal of (premium, if any) or interest on any Note is due and payable, the Company shall irrevocably deposit with the Trustee or the Paying Agent a sum sufficient in immediately available funds 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 the Holders or the Trustee all money held by such Paying Agent for the payment of principal of or interest on the Notes and shall notify the Trustee in writing of any default by the Company
or any Subsidiary Guarantor in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent (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, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money delivered to the Trustee. Upon any bankruptcy, reorganization or
similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Notes. 

        SECTION 2.5.    Holder
Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar or to the extent otherwise required under the TIA, the
Company, on its own behalf and on behalf of each Subsidiary Guarantor, shall furnish to the Trustee, in writing at least seven Business Days before each interest payment date and at such other times
as the Trustee may request in writing within 15 days, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders and the Company shall
otherwise comply with TIA § 312(a). 

        SECTION 2.6.    Transfer
and Exchange. 

        (a)   The
Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.1
or this Section 2.6 in accordance with its records retention policy. 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 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 II,
execute and the Trustee shall authenticate Definitive Notes and Global Notes at the Registrar's request. 

34

 

         (ii)  No
service charge will be imposed by the Company, the Trustee or the Registrar for any registration of transfer or exchange, but the Company or the Registrar may
require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar
governmental charges payable upon exchange or transfer pursuant to Sections 3.8, 3.10 or 9.5). 

        (iii)  The
Company shall not be required to transfer or exchange, and the Registrar shall not be required to register the transfer of or exchange of, any Note (1)
for a period beginning 15 Business Days before the mailing of a notice of a redemption of Notes to the Holders and ending at the close of business on the day of such mailing or
(2) selected for redemption. 

        (iv)  Prior
to the due presentation for registration of transfer of any Note, the Company, the Trustee, the Paying Agent or the Registrar may deem and treat the Person in
whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (premium, if any) 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 or the Registrar shall be affected by notice to the contrary. 

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

        (c)   No
Obligation of the Trustee.    (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global
Note, a member of, or a participant in, the Depositary or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice or the payment of
any amount or delivery of any Notes (or other security or property) under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to
Holders in respect of the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of
beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected
in relying upon information furnished by the Depositary 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 Depositary participants, members or beneficial owners in any Global Note) other than,
if the Trustee has received prior notice of a transfer, to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and
to examine the same to determine substantial compliance as to form with the express requirements hereof. 

        SECTION 2.7.    Mutilated,
Destroyed, Lost or Wrongfully Taken Notes. Subject to the other provisions of this Section 2.7, 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, upon Company
Order, shall authenticate a replacement Note. The Company shall not be required to issue, and the Trustee shall not be required to authenticate, a replacement Note unless (a) the Holder
satisfies the requirements of Section 8-405 of the Uniform Commercial Code, such that the Holder (i) notifies the Company and the Trustee within a reasonable time after such
Holder has notice of such loss, destruction or wrongful taking and the Registrar has not registered a transfer prior 

35

 

to
receiving such notification, (ii) makes such request to the Company prior to the Company having notice that the Note has been acquired by a protected purchaser as defined in
Section 8-303 of the Uniform Commercial Code (a "protected purchaser") and (iii) satisfies any other reasonable requirements of the Company and the Trustee, and
(b) such Holder furnishes an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss which
any of them may suffer if a Note is replaced. If the Holder satisfies the foregoing requirements, in the absence of notice to the Company, any Subsidiary Guarantor or the Trustee that such Note has
been acquired by a protected purchaser, the Company shall execute and upon Company Order the Trustee shall authenticate and deliver, in exchange for any such mutilated Note or in lieu of any such
destroyed, lost or wrongfully taken Note, a new Note of like tenor and principal amount, bearing a number not contemporaneously outstanding. 

        In
case any such mutilated, destroyed, lost or wrongfully taken 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 through the Paying Agent upon receiving an indemnity bond sufficient in the judgment of the Company and the Trustee. 

        Upon
the issuance of any new Note under this Section, the Company or the Registrar 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 in lieu of any mutilated, destroyed, lost or wrongfully taken Note shall constitute an original additional contractual obligation of the
Company, any Subsidiary Guarantor and any other obligor upon the Notes, whether or not the mutilated, destroyed, lost or wrongfully taken 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 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 wrongfully taken Notes. 

        SECTION 2.8.    Outstanding
Notes. Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it,
those paid pursuant to Section 2.7, those delivered to it for cancellation and those described in this Section as not outstanding. A Note does not cease to be outstanding in the event the
Company or an Affiliate of the Company holds the Note except that the Company or an Affiliate of the Company shall not obtain voting rights with respect to
such Note. 

        If
a Note is replaced pursuant to Section 2.7, 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 holds in trust (or, if the Company or a Wholly Owned Subsidiary that is a Domestic Subsidiary is the Paying Agent, such Person has segregated and holds in trust as
provided in Section 2.4), in accordance with this Indenture, on a maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes maturing and
the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes cease to be outstanding and
interest on them ceases to accrue. 

        SECTION 2.9.    Temporary
Notes. In the event that Definitive Notes are to be issued under the terms of this Indenture, until such
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 

36

 

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
return to the Company all Notes surrendered for registration of transfer, exchange, payment or cancellation. The Company may not issue new Notes to replace Notes it has paid in full or delivered to
the Trustee for cancellation. 

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

        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 payment date at the office or agency of the Company maintained for such purpose pursuant to Section 2.3. The regular record date shall be the 15th day
of the month prior to an interest payment date. 

        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 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 

37

 

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 11.2, 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 through the Paying Agent 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, 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 comprised of
twelve 30-day months. 

        SECTION 2.13.    CUSIP
Numbers. The Company in issuing the Notes may use "CUSIP" numbers (if then generally in use). The Trustee
shall not be responsible for the use of CUSIP numbers. Neither the Company nor the Trustee makes any representation as to the correctness of CUSIP numbers as printed on any Note or notice to Holders
and reliance may be placed only on the other identification numbers
printed on the Notes, and any redemption or exchange shall not be affected by any defect in or omission of such CUSIP numbers. The Company shall promptly notify the Trustee in writing of any change in
the CUSIP numbers. 

 
 

ARTICLE III    
    
    Covenants  
    

        SECTION 3.1.    Payment of Notes. The Company shall promptly pay the principal of 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 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 Holders on that
date pursuant to the terms of this Indenture. 

        The
Company shall pay interest on overdue principal 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, the Company or the Paying Agent may, to the extent it is required to do so by law, deduct or withhold income or
other similar taxes imposed by the United States of America from principal or interest payments hereunder. 

38

   
        SECTION 3.2.    SEC Reports. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act, the Company will file with the SEC, and make available to the Trustee and the registered Holders, the annual reports
and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that are specified in Sections 13
and 15(d) of the Exchange Act with respect to U.S. issuers within the time periods specified therein or in the relevant forms. In the event that the Company is not permitted to file such
reports, documents and information with the SEC pursuant to the Exchange Act, the Company will nevertheless make available such Exchange Act information to the Trustee and the Holders as if the
Company were subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act within the time periods specified therein or in the relevant forms. The Company shall also
comply with the other provisions of TIA § 314(a). 

        If
the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries and the aggregate amount of net assets of all such Unrestricted Subsidiaries exceeds the greater of
$10.0 million and 0.5% of Adjusted Consolidated Net Tangible Assets determined as of the filing date of any quarterly or annual report required by the immediately preceding paragraph, then the
quarterly and annual financial information required by the immediately preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the
footnotes to the financial statements and in Management's Discussion and Analysis of Results of Operations and Financial Condition, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries. 

        The
Company and the Subsidiary Guarantors will make available to Holders and to prospective investors, upon the request of such Holders, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act at any time the Notes are not freely transferable under the Securities Act. 

        For
purposes of this Section 3.2, the Company and the Subsidiary Guarantors will be deemed to have furnished the reports to the Trustee and the
Holders as required by this Section 3.2 if they have filed such reports with the SEC via the SEC's Electronic Data Gathering, Analysis and Retrieval System and such
reports are publicly available. 

        In
the event that any direct or indirect parent company of the Company becomes a guarantor of the Notes, the Company may satisfy its obligations under this
Section 3.2 by furnishing financial information relating to such parent; provided that (a) such financial
statements are accompanied by consolidating financial information for such parent, the Company, the Subsidiary Guarantors and the Subsidiaries of the Company that are not Subsidiary Guarantors in the
manner prescribed by the SEC and (b) such
parent is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the Capital Stock of the Company. 

        SECTION 3.3.    Limitation
on Indebtedness. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to,
Incur any Indebtedness (including, without limitation, Acquired Indebtedness); provided, however, that any of the Company and the Subsidiary Guarantors
may Incur Indebtedness if on the date thereof: 

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

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

39

 

        (b)   Clause (a)
of this Section 3.3 will not prohibit the Incurrence of the following Indebtedness: 

        (1)   Indebtedness
of any of the Company and the Subsidiary Guarantors at any time outstanding pursuant to a Credit Facility in an aggregate principal amount up to the greater
of (a) $1.0 billion and (b) 30% of Adjusted Consolidated Net Tangible Assets determined as of the date of the Incurrence of such Indebtedness; 

        (2)   Guarantees
by (a) any of the Company and the Subsidiary Guarantors of Indebtedness Incurred by the Company or any Subsidiary Guarantor in accordance with the
provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor
Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Subsidiary Guarantee, as the case may be, and (b) Non-Guarantor
Restricted Subsidiaries of Indebtedness Incurred by Non-Guarantor Restricted Subsidiaries in accordance with the provisions of this Indenture; 

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

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

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

        (c)   (i)
any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being beneficially held by a Person other than the
Company or a Restricted Subsidiary of the Company; and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the 
Company; shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be; 

        (4)   Indebtedness
represented by (a) the Notes issued on the Issue Date and the Subsidiary Guarantees, (b) any Indebtedness (other than the Indebtedness
described in clauses (1), (2), (3), (9) and (10) of this Section 3.3(b)) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of
any Indebtedness described in this clause (4) or clause (5) of this Section 3.3(b) or Incurred pursuant to Section 3.3(a); 

        (5)   Indebtedness
of a Restricted Subsidiary Incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, the Company or any
Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition);  provided, however,
that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional
Indebtedness pursuant to Section 3.3(a) after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5); 

        (6)   Indebtedness
under Hedging Obligations that are Incurred in the ordinary course of business (a) for the purpose of fixing or hedging interest rate risk with
respect to any Indebtedness Incurred in accordance with this Indenture; (b) for the purpose of fixing or hedging currency 

40

 

exchange
rate risk with respect to any currency exchanges; or (c) for the purpose of fixing or hedging commodity price risk with respect to any commodities; 

        (7)   the
Incurrence by any of the Company and the Restricted Subsidiaries of Indebtedness represented by Capitalized Lease Obligations, mortgage financings, purchase money
obligations or other payments, in each case Incurred to finance all or any part of the purchase price or cost of acquisition, construction, improvement or development of assets or property (other than
Capital Stock or other Investments) acquired, constructed, improved or developed in the ordinary course of business of the Company or such Restricted Subsidiary, and Attributable Indebtedness, in an
aggregate principal amount, including all Refinancing Indebtedness Incurred to refund, defease, renew, extend, refinance or replace any Indebtedness Incurred pursuant to this clause (7), not
to exceed $20.0 million at any time outstanding; 

        (8)   Indebtedness
Incurred in respect of workers' compensation claims, self-insurance obligations, bid, performance, surety, appeal and similar bonds, bankers'
acceptances, completion guarantees, and similar instruments provided by the Company or a Restricted Subsidiary in the ordinary course of business; 

        (9)   Indebtedness
arising from agreements of any of the Company and the Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar
obligations, earn-outs or similar obligations, in each case, Incurred or assumed in connection with the disposition of any business, properties or assets of the Company or any Restricted
Subsidiary or Capital Stock of a Restricted Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no
time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition; 

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

        (11) Indebtedness
relating to Hydrocarbon balancing positions arising in the ordinary course of business; 

        (12) Indebtedness
of any of the Company and the Restricted Subsidiaries to the extent the net proceeds thereof are promptly (a) used to redeem all of the Notes or
(b) deposited to defease or satisfy the Notes as described in Section 8.1 or Section 8.2; and 

        (13) in
addition to the items referred to in clauses (1) through (12) above, Indebtedness of any of the Company and the Restricted Subsidiaries in an aggregate
outstanding principal amount (or accreted value, as the case may be) which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (13)
and then outstanding, will not exceed $50.0 million at any time outstanding. 

        (c)   The
Company will not Incur any Indebtedness pursuant to Section 3.3(b) if the proceeds thereof are used, directly or indirectly, to
refinance any Subordinated Obligations of the Company unless such Indebtedness will be subordinated to the Notes to at least the same extent as such Subordinated Obligations. No Subsidiary Guarantor
will Incur any Indebtedness pursuant to Section 3.3(b) if the proceeds thereof are used, directly or indirectly, to refinance any Guarantor Subordinated Obligations
of such Subsidiary Guarantor unless such Indebtedness will be subordinated to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee to at least the same extent as such Guarantor
Subordinated Obligations. No Restricted Subsidiary (other than a Subsidiary Guarantor) may Incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Subsidiary
Guarantor. 

41

 

        (d)   For
purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this
Section 3.3: 

        (1)   subject
to clause (2) below, in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in
Sections 3.3(a) and 3.3(b), the Company, in its sole discretion, will classify or reclassify such item of Indebtedness in any
manner that complies with this Section 3.3 and only be required to include the amount and type of such Indebtedness in one of such clauses
or paragraphs; 

        (2)   all
Indebtedness outstanding on the Issue Date under the Senior Secured Credit Agreement shall be deemed Incurred under clause (1) of
Section 3.3(b) and not Section 3.3(a) or clause (4) of Section 3.3(b); 

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

        (4)   if
obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to clause (1) of
Section 3.3(b) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included; 

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

        (6)   Indebtedness
permitted by this Section 3.3 need not be permitted solely by reference to one provision permitting such Indebtedness
but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.3 permitting such Indebtedness; 

        (7)   the
principal amount of any Indebtedness outstanding in connection with a securitization transaction or series of transactions is the amount of obligations outstanding
under the legal documents entered into as part of such transaction that would be characterized as principal if such transaction were structured as a secured lending transaction rather than as a
purchase relating to such transaction; and 

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

        (e)   Accrual
of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends
in the form of additional shares of Preferred Stock or Disqualified Stock will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.3.
The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the
principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. 

        (f)    In
addition, the Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness or issue any shares of Disqualified Stock, other than
Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary
as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.3, the Company shall be in Default of this
Section 3.3). 

42

 

        (g)   For
purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal
amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other
Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange
rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness
does not exceed the principal amount of such Indebtedness being refinanced, plus, without duplication, any additional Indebtedness Incurred to pay interest or premiums required by the instruments
governing the Indebtedness being refinanced and fees and expenses Incurred in connection therewith. Notwithstanding any other provision of this Section 3.3, the
maximum amount of Indebtedness that the Company may Incur pursuant to this Section 3.3 shall not be deemed to be exceeded solely as a result of fluctuations in the
exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be
calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. 

        SECTION 3.4.    Limitation
on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries,
directly or indirectly, to: 

        (1)   declare
or pay any dividend or make any distribution (whether made in cash, securities or other property) on or in respect of its Capital Stock (including, without
limitation, any payment thereof in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) except: 

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

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

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

        (3)   purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations or Guarantor Subordinated Obligations (other than (a) Indebtedness of the Company owing to and held by any Subsidiary Guarantor or Indebtedness of a Subsidiary
Guarantor owing to and held by the
Company or any other Subsidiary Guarantor permitted pursuant to Section 3.3(b)(3) or (b) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Subordinated Obligations or Guarantor Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement); or 

        (4)   make
any Restricted Investment in any Person; 

(any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Restricted Investment referred to in clauses (1) through (4) shall
be referred to herein as 

43

 

a
"Restricted Payment"), if at the time the Company or such Restricted Subsidiary makes such Restricted Payment: 

         (I)  a
Default shall have occurred and be continuing (or would result therefrom); or 

        (II)  the
Company is not able to Incur $1.00 of additional Indebtedness pursuant to Section 3.3(a) after giving effect, on a
pro forma basis, to such Restricted Payment; or 

      (III)  the
aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date would exceed the sum of: 

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

         (ii)  100%
of the aggregate Net Cash Proceeds, or the fair market value of property other than cash, received by the Company from the issue or sale of its Capital Stock
(other than Disqualified Stock) or other capital contributions subsequent to the Issue Date (other than Net Cash Proceeds or property received from an issuance or sale of such Capital Stock to a
Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan, option plan or similar trust is financed by
loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination) excluding in any event Net Cash Proceeds
received by the Company from the
issue and sale of its Capital Stock or capital contributions to the extent applied to redeem Notes in compliance with the provisions set forth under Section 5.1; 

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

        (iv)  the
amount equal to the net reduction in Restricted Investments made by the Company or any of its Restricted Subsidiaries in any Person resulting from: 

        (A)  repurchases,
repayments or redemptions of such Restricted Investments by such Person, proceeds realized upon the sale of such Restricted Investment to an unaffiliated
purchaser, repayments of loans or advances or other transfers of cash or assets (including, without limitation, by way of dividend or distribution) by such Person to the Company or any Restricted
Subsidiary (other than for reimbursement of tax payments); or 

        (B)  the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued, in each case, as provided in the definition of "Investment") not to exceed, in the
case of any Unrestricted Subsidiary, the amount of Investments previously made by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary, 

which
amount in each case under this clause (iv) was included in the calculation of the amount of Restricted Payments; provided, however, that no
amount will be included under this clause (iv) to the extent it is already included in Consolidated Net Income; and 

44

 

         (v)  any
amount that previously qualified as a Restricted Payment on account of any Guarantee entered into by the Company or any Restricted Subsidiary;  provided, that the obligation arising under such Guarantee
no longer exists (and excluding any amount actually paid by the Company or any
Restricted Subsidiary to satisfy its obligations under such Guarantee); and 

        (b)   The
provisions of Section 3.4(a) will not prohibit: 

        (1)   any
Restricted Payment (other than a Restricted Payment described in clause (1) of the definition of "Restricted Payment") made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary or an employee stock ownership
plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans
have been repaid with cash on or prior to the date of determination); provided, however, that the amount of such Restricted Payments will be excluded in
subsequent calculations of the amount of Restricted Payments; provided, further, that the Net Cash Proceeds or property other than cash received from
such sale of Capital Stock to the extent such proceeds are used to make such Restricted Payments will be excluded from Section 3.4(a)(III)(ii); 

        (2)   any
principal payment on, purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations of the Company or Guarantor
Subordinated Obligations of any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Obligations of the Company or any principal
payment on, purchase, repurchase, redemption, defeasance or other acquisition or retirement of Guarantor Subordinated Obligations made by exchange for or out of the proceeds of the substantially
concurrent sale of Guarantor Subordinated Obligations that, in each case, is permitted to be Incurred pursuant to Section 3.3 and that in each case
constitutes Refinancing Indebtedness; provided, however, that the amount of such Restricted Payments will be excluded in subsequent calculations of the
amount of Restricted Payments; 

        (3)   any
principal payment on, purchase, repurchase, redemption, defeasance or other acquisition or retirement of Disqualified Stock of the Company or a Restricted Subsidiary
made by exchange for or out of the proceeds of the substantially concurrent sale of Disqualified Stock of the Company or such Restricted Subsidiary, as the case may be, that, in each case, is
permitted to be Incurred pursuant to Section 3.3 and that in each case constitutes Refinancing Indebtedness; provided,
however, that the amount of such Restricted Payments will be excluded in subsequent calculations of the amount of Restricted Payments; 

        (4)   so
long as no Default or Event of Default has occurred and is continuing, any purchase or redemption of Subordinated Obligations or Guarantor Subordinated Obligations of
a Subsidiary Guarantor from Net Available Cash to the extent permitted under Section 3.8; provided, however, that
the amount of such Restricted Payments will be excluded in subsequent calculations of the amount of Restricted Payments; 

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

        (6)   so
long as no Default or Event of Default has occurred and is continuing, 

        (a)   the
purchase, redemption or other acquisition, cancellation or retirement for value of Capital Stock, or options, warrants or other rights to purchase or acquire Capital
Stock of the Company or any Restricted Subsidiary or any direct or indirect parent of the Company held 

45

 

by
any existing or former officers, directors, employees, management or consultants of the Company or any Subsidiary of the Company or their assigns, estates or heirs, in each case in connection with
the repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate officers, directors, employees, management or consultants;  provided that such Capital
Stock, or options, warrants or other rights to purchase or acquire Capital Stock, were received for services related to, or
for the benefit of, the Company and its Restricted Subsidiaries; and provided further that such redemptions or repurchases pursuant to this clause will
not exceed $2.0 million in the aggregate during any calendar year (with unused amounts in any calendar year being carried over to the succeeding calendar years) and $5.0 million in the
aggregate for all such redemptions and repurchases, plus the amount of any capital contributions to the Company as a result of sales of Capital Stock, or options, warrants or other rights to purchase
or acquire Capital Stock, of the Company or any direct or indirect parent of the Company to such persons, plus the cash proceeds of key man life insurance policies received by the Company and its
Restricted Subsidiaries after the Issue Date (provided, however, that the Net Cash Proceeds from such sale of Capital Stock to the extent such proceeds
are used to make such Restricted Payments will be excluded from Section 3.4(a)(III)(ii), and provided,  further, however, that the amount of such Restricted Payments will be excluded in subsequent
calculations of the amount of Restricted Payments); and 

        (b)   loans
or advances to employees, officers, directors, management or consultants of the Company or any Subsidiary of the Company the proceeds of which are used to purchase
Capital Stock of the Company, in an aggregate amount not in excess of $2.0 million with respect to all loans or advances made since the Issue Date (without giving effect to the forgiveness of
any such loan); provided, however, that the amount of such Restricted Payments will be included in
subsequent calculations of the amount of Restricted Payments; 

        (7)   so
long as no Default or Event of Default has occurred and is continuing, the declaration and payment of dividends to holders of any class or series of Disqualified
Stock of the Company issued in accordance with the terms of this Indenture to the extent such dividends are included in the definition of "Consolidated Interest Expense;"  provided, however, that the
amount of such Restricted Payments will be excluded in subsequent calculations of the amount of Restricted Payments; 

        (8)   repurchases
of Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible securities if such Capital Stock represents a portion of
the exercise price thereof; provided, however, that the amount of such Restricted Payments will be excluded in subsequent calculations of the amount of
Restricted Payments; 

        (9)   the
purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligation or Guarantor Subordinated Obligation
(a) at a purchase price not greater than 101% of the principal amount of such Subordinated Obligation or Guarantor Subordinated Obligation in the event of a Change of Control in accordance with
provisions similar to Section 3.10 or (b) at a purchase price not greater than 100% of the principal amount thereof in accordance with provisions similar to
Section 3.8; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or
other acquisition or retirement, the Company has made the Change of Control Offer or Asset Disposition Offer, as applicable, as provided in such covenant with respect to the Notes and has completed
the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Disposition Offer; provided,
however, that the amount of such Restricted Payments will be excluded in subsequent calculations of the amount of Restricted Payments; 

46

 

        (10) so
long as no Default or Event of Default has occurred and is continuing, the payment of dividends on the Company's Common Stock of an amount per annum not to exceed
$0.20 per share (but in no event in excess of $20.0 million in the aggregate during any calendar year pursuant to this clause (10)); provided,
however, that the amount of such Restricted Payments will be included in subsequent calculations of Restricted Payments; 

        (11) the
payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction that is not prohibited by this Indenture (including, without
limitation, in connection with the conversion of convertible Indebtedness into Capital Stock); provided, however, that such Restricted Payments will be
excluded in subsequent calculations of the amount of Restricted Payments; 

        (12) payments
to dissenting stockholders not to exceed $5.0 million in the aggregate after the Issue Date (x) pursuant to applicable law or (y) in
connection with the settlement or other satisfaction of claims made pursuant to or in connection with a consolidation, merger or transfer of assets in connection with a transaction that is not
prohibited by this Indenture; provided, however, that such Restricted Payments will be included in
subsequent calculations of the amount of Restricted Payments; 

        (13) so
long as no Default or Event of Default has occurred and is continuing, any redemption of share purchase rights at a redemption price not to exceed $0.01 per right;  provided, however, that such
Restricted Payment will be included in subsequent calculations of the amount of Restricted Payments; 

        (14) so
long as no Default or Event of Default has occurred and is continuing, the purchase, redemption or other acquisition, cancellation or retirement for value of Capital
Stock, or options, warrants or other rights to purchase or acquire Capital Stock, of the Company pursuant to a stock repurchase program authorized by the Board of Directors of the Company for an
aggregate amount
not to exceed $200.0 million after the Issue Date; provided, however, that such Restricted Payments will be included in subsequent calculations
of the amount of Restricted Payments; and 

        (15) Restricted
Payments in an amount not to exceed $25.0 million; provided,  however, that the amount of such Restricted Payments will be included in subsequent
calculations of the amount of Restricted Payments. 

The
amount of all Restricted Payments (other than cash) shall be the fair market value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued
by the Company or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. 

        SECTION 3.5.    Limitation
on Liens. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, Incur or suffer to exist any Lien (other than Permitted Liens) upon any of its property or assets (including, without limitation, Capital Stock of Subsidiaries), whether owned on
the Issue Date or acquired after that date, which Lien is securing any Indebtedness, unless contemporaneously with the Incurrence of such Liens effective provision is made to secure the Indebtedness
due under this Indenture and the Notes or, in respect of Liens on any Restricted Subsidiary's property or assets, any Subsidiary Guarantee of such Restricted Subsidiary, equally and ratably with
(or senior in priority to in the case of Liens with respect to Subordinated Obligations or Guarantor Subordinated Obligations, as the case may be) the Indebtedness secured by such Lien for so
long as such Indebtedness is so secured. 

        SECTION 3.6.    Limitation
on Sale/Leaseback Transactions. The Company will not, and will not permit any of its Restricted Subsidiaries to,
enter into any Sale/Leaseback Transaction unless: 

        (1)   the
Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Sale/Leaseback Transaction at least equal to the fair market
value (as conclusively determined by the Board of Directors of the Company or such Restricted Subsidiary) of the property subject to such transaction; 

47

  

        (2)   the
Company or such Restricted Subsidiary could have Incurred Indebtedness at the time of such Sale/Leaseback Transaction in an amount equal to the Attributable
Indebtedness in respect of such Sale/Leaseback Transaction pursuant to Section 3.3; and 

        (3)   the
Sale/Leaseback Transaction is treated as an Asset Disposition and all of the conditions of this Indenture described under
Section 3.8 (including the provisions concerning the application of Net Available Cash) are satisfied with respect to such Sale/Leaseback Transaction, treating all
of the consideration received in such Sale/Leaseback Transaction as Net Available Cash for purposes of Section 3.8. 

        SECTION 3.7.    Limitation
on Restrictions on Distributions from Restricted Subsidiaries. (a) The Company will not, and will not
permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted
Subsidiary to: 

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

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

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

        (b)   The
provisions of Section 3.7(a) will not prohibit: 

        (1)   any
encumbrance or restriction pursuant to an agreement or instrument in effect at or entered into on the Issue Date, including, without limitation, this Indenture, the
Notes, the Subsidiary Guarantees, and the Senior Secured Credit Agreement (and related documentation); 

        (2)   any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to any agreement or instrument that is in existence at the time such Person becomes a
Restricted Subsidiary (and not Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary); provided, that
any such encumbrance or restriction shall not extend to any assets or property of the Company or any other Restricted Subsidiary other than the assets and property so acquired and that, in the case of
Indebtedness, was permitted to be Incurred pursuant to this Indenture; 

        (3)   any
encumbrance or restriction pursuant to any agreement or instrument governing any Acquired Indebtedness or other agreement or instrument of any Person or related to
property, assets or Capital Stock of a Person acquired by or merged into or consolidated with the Company or any Restricted Subsidiary; provided, that
such encumbrance or restriction (i) was not entered into in contemplation of the acquisition, merger or consolidation transaction, and (ii) shall not extend to any assets or property of
the Company or any other Restricted Subsidiary other than the assets and property so acquired and that, in the case of Indebtedness, was permitted to be Incurred pursuant to this Indenture; 

        (4)   any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement effecting a refunding, replacement or refinancing of Indebtedness
Incurred pursuant to an agreement referred to in any of clauses (1), (2) or (3) of this Section 3.7(b) or this clause (4) 

48

 

or contained
in any amendment, restatement, modification, renewal, restructuring, supplement, extension, substitution, refunding, replacement or refinancing of an agreement referred to in any
of such clauses; provided, however, that, in the good faith reasonable determination of the Company, the encumbrances and restrictions with respect to
such Restricted Subsidiary contained in any such agreement are no less favorable in any material respect, taken as a whole, to the Holders than the encumbrances and restrictions contained in such
agreements referred to in clauses (1), (2) or (3) of this Section 3.7(b) on the Issue Date or the date such Restricted Subsidiary became a
Restricted Subsidiary or was merged into a Restricted Subsidiary, whichever is applicable; 

        (5)   in
the case of Section 3.7(a)(3), any encumbrance or restriction: 

          (i)  that
restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or the
assignment or transfer of any lease, license or other contract; 

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

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

        (6)   (i)
purchase money obligations for property acquired in the ordinary course of business and (ii) Capitalized Lease Obligations permitted under this Indenture, in
each case, that impose encumbrances or restrictions of the nature described in Section 3.7(a)(3) on the property so acquired; 

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

        (8)   any
customary encumbrances or restrictions imposed pursuant to any agreement referred to in the definition of "Permitted Business Investment"; 

        (9)   deposit
arrangements or net worth provisions in leases and other agreements entered into by the Company or any Restricted Subsidiary in the ordinary course
of business; 

        (10) in
the case of Section 3.7(a)(3), any encumbrance or restriction that is a Lien otherwise permitted to be Incurred pursuant to
Section 3.5; 

        (11) any
encumbrance or restriction in respect of a Sale/Leaseback Transaction permitted under Section 3.6; and 

        (12) encumbrances
or restrictions arising or existing by reason of applicable law or any applicable rule, regulation or order. 

        SECTION 3.8.    Limitation
on Sales of Assets and Subsidiary Stock. (a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, make any Asset Disposition unless: 

        (1)   the
Company or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the Fair Market Value, including as to the value of all
non-cash consideration, as determined in good faith by the Company, of the shares and assets subject to such Asset Disposition; 

49

 

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

        (3)   an
amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company or any one or more Restricted Subsidiaries: 

          (i)  to
the extent the Company or any Restricted Subsidiary, as the case may be, elects (or is required by the terms of any Indebtedness), to prepay, repay or
purchase Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) or Indebtedness of a Wholly Owned Subsidiary (other than any Disqualified Stock or Guarantor
Subordinated Obligations of a Wholly Owned Subsidiary that is a Subsidiary Guarantor) (in each case other than Indebtedness owed to the Company or an Affiliate of the Company) within
365 days from the later of the date of such Asset Disposition and the receipt of such Net Available Cash; provided, however, that, in connection
with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (a), the Company or such Restricted Subsidiary will retire such Indebtedness and will cause the related
commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased; and 

         (ii)  to
the extent the Company or any Restricted Subsidiary elects, to invest in Additional Assets within 365 days from the later of the date of such Asset
Disposition and the receipt of such Net Available Cash; 

provided that the Company and its Restricted Subsidiaries may make any combination of prepayment, repayment, purchase or investment permitted by
clause (i) or clause (ii) above and, pending the final application of any such Net Available Cash in accordance with clause (i) or clause (ii) above or pursuant to an Asset
Disposition Offer described below, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by
this Indenture. 

        (b)   Any
Net Available Cash from Asset Dispositions that are not applied or invested as provided in Section 3.8(a) will be deemed to
constitute "Excess Proceeds." Within 30 days following the 365th day after an Asset Disposition, if the aggregate amount of Excess Proceeds
exceeds $25.0 million, the Company will be required to make an offer ("Asset Disposition Offer") to all Holders and to the extent required by the terms of other
Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu
Indebtedness with the proceeds from any Asset Disposition ("Pari Passu Notes"), to purchase the maximum principal amount of Notes and any such Pari Passu
Notes to which the Asset Disposition Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Notes and
Pari Passu Notes plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Notes,
as applicable, in each case in denominations of $2,000 and integral multiples of $1,000 in excess thereof. To the extent that the aggregate amount of Notes and Pari Passu Notes so validly
tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate or other purposes,
subject to other covenants contained in this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Notes surrendered by holders or lenders,
collectively, exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and Pari Passu Notes to be purchased on a pro rata basis on the basis of the aggregate principal
amount of tendered Notes and Pari Passu Notes. Upon completion of such Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. 

        (c)   The
Asset Disposition Offer will remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by
applicable law (the 

50

 

"Asset Disposition
Offer Period"). No later than five Business Days after the termination of the Asset Disposition Offer Period
(the "Asset Disposition Purchase Date"), the Company will purchase the principal amount of Notes and Pari Passu Notes required to be purchased pursuant to
this Section 3.8 (the "Asset Disposition Offer Amount") or, if less than the Asset Disposition Offer Amount has been so validly
tendered, all Notes and Pari Passu Notes validly tendered in response to the Asset Disposition Offer. 

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

        (e)   On
or before the Asset Disposition Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the
Asset Disposition Offer Amount of Notes and Pari Passu Notes or portions of Notes and Pari Passu Notes so validly tendered and not properly withdrawn pursuant to the Asset Disposition
Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Notes and Pari Passu Notes so validly tendered and not properly withdrawn, in
each case in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Company will deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof
were accepted for payment by the Company in accordance with the terms of this Section 3.8 and, in addition, the Company will deliver all certificates and notes
required, if any, by the agreements governing the Pari Passu Notes. The Company or the Paying Agent, as the case may be, will promptly (but in any case not later than five Business Days
after termination of the Asset Disposition Offer Period) mail or deliver to each tendering Holder or holder or lender of Pari Passu Notes, as the case may be, an amount equal to the purchase
price of the Notes or Pari Passu Notes so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Company for purchase, and the Company
will promptly issue a new Note, and the Trustee, upon delivery of an Officers' Certificate from the Company, will authenticate and mail or deliver such new Note to such holder, in a principal amount
equal to any unpurchased portion of the Note surrendered; provided that each such new Note will be in a principal amount of $2,000 or an integral
multiple of $1,000 in excess thereof. In addition, the Company will take any and all other actions required by the agreements governing the Pari Passu Notes in connection with the Asset
Disposition Offer. Any Note not so accepted will be promptly mailed or delivered by the Company to the holder thereof. The Company will publicly announce the results of the Asset Disposition Offer on
or before the Asset Disposition Purchase Date. 

        (f)    For
the purposes of this Section 3.8, the following shall be deemed to be cash: (1) the assumption by the transferee of
Indebtedness (other than Subordinated Obligations or Disqualified Stock) of the Company or Indebtedness of a Wholly Owned Subsidiary (other than Guarantor Subordinated Obligations or Disqualified
Stock of any Wholly Owned Subsidiary that is a Subsidiary Guarantor) and the release of the Company or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition (in which case the Company will, without further action, be deemed to have applied such deemed cash to Indebtedness in accordance with
Section 3.8(a)(3)(i)); and (2) securities, notes or other obligations received by the Company or any Restricted Subsidiary from the transferee that, within
180 days of receipt thereof, are converted, sold or exchanged by the Company or such Restricted Subsidiary into or for cash. 

        (g)   The
Company will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to this Section 3.8. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section 3.8, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached
its obligations under this Indenture by virtue of any conflict. 

51

 

        SECTION 3.9.    Limitation
on Affiliate Transactions. (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless: 

        (1)   the
terms of such Affiliate Transaction are not materially less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be
obtained in a comparable transaction at the time of such transaction in arm's-length dealings with a Person who is not such an Affiliate; 

        (2)   in
the event such Affiliate Transaction involves an aggregate consideration to the Affiliate of the Company with a value in excess of $10.0 million, the terms of
such transaction have been approved by a majority of the members of the Board of Directors of the Company and by a majority of the members of such Board having no personal stake in such transaction,
if any (and such majority or majorities, as the case may be, determines that such Affiliate Transaction satisfies the criteria in Section 3.9(a)(1)); and 

        (3)   in
the event such Affiliate Transaction involves an aggregate consideration to the Affiliate of the Company with a value in excess of $25.0 million, the Company
has received a written opinion from an independent investment banking, engineering, consulting, accounting or appraisal firm of nationally recognized standing, or other recognized firm or expert that
in the judgment of the Board of Directors of the Company is independent and qualified to render such opinion, either (i) that such Affiliate Transaction is fair, from a financial point of view,
to the Company or the applicable Restricted Subsidiary, as the case may be, or (ii) that the terms of such Affiliate Transaction are not materially less favorable to the Company or the
applicable Restricted Subsidiary, as the case may be, than those that might reasonably have been obtained in a comparable transaction at such time on an arm's length basis from a Person that is not
an Affiliate. 

        (b)   The
provisions of Section 3.9(a) will not apply to: 

        (1)   any
Restricted Payment (other than a Restricted Investment) permitted to be made pursuant to Section 3.4; 

        (2)   any
issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements and other
compensation arrangements, options to purchase Capital Stock of the Company, restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or
other employee benefits plans and/or insurance and indemnification arrangements approved by the Board of Directors of the Company or the applicable Restricted Subsidiary provided to or for the benefit
of directors, officers, employees, managers or consultants who are Affiliates of the Company; 

        (3)   loans
or advances to employees, officers, directors, managers and consultants who are Affiliates of the Company in the ordinary course of business of the Company or any
Restricted Subsidiary, in an aggregate principal amount not in excess of $2.0 million with respect to all loans or advances made since the Issue Date (without giving effect to the forgiveness
of any such loan); 

        (4)   any
transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries and Guarantees issued by the Company or a Restricted Subsidiary for
the benefit of the Company or a Restricted Subsidiary, as the case may be, in accordance with Section 3.3; 

        (5)   any
transaction with a joint venture, partnership, limited liability company or other entity that would constitute an Affiliate Transaction solely because the Company or
a Restricted Subsidiary owns an equity interest in such joint venture, partnership, limited liability company or other entity; 

52

 

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

        (7)   the
existence of, and the performance of obligations of the Company or any of its Restricted Subsidiaries under the terms of, any agreement to which the Company or any
of its Restricted Subsidiaries is a party as of or on the Issue Date, as these agreements may be amended, modified, supplemented, extended or renewed from time to time;  provided, however, that any
future amendment, modification, supplement, extension or renewal entered into after the Issue Date will be permitted to the
extent that its terms are not more disadvantageous to the Holders than the terms of the agreements in effect on the Issue Date; 

        (8)   transactions
with customers, clients, suppliers or purchasers or sellers of goods or services that are Affiliates of the Company, in each case in the ordinary course of
the business of the Company and its Restricted Subsidiaries and otherwise in compliance with the terms of this Indenture; provided that in the good
faith reasonable determination of the Company, such transactions are on terms that are not materially less favorable, taken as a whole, to the Company or the relevant Restricted Subsidiary, as the
case may be, than those that would have been obtained in a comparable transaction at such time by the Company or such Restricted Subsidiary from a Person that is not an Affiliate; 

        (9)   any
issuance or sale of Capital Stock or debt securities made to an Affiliate of the Company on the same terms as are being made to the non-Affiliate
investors in any public or private issuance or sale of such Capital Stock or debt securities; provided, that any such issuance or sale complies with the
requirements of Section 3.9(a)(1); and 

        (10) any
issuance or sale of Capital Stock (other than Disqualified Stock) to Affiliates of the Company and the granting of registration and other customary rights in
connection therewith. 

        SECTION 3.10.    Change
of Control. (a) If a Change of Control occurs, unless the Company has exercised its right to redeem all of
the Notes as described under Section 5.1, each Holder will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess thereof) of such Holder's Notes at a purchase price in cash equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date). 

        (b)   Within
30 days following any Change of Control, unless the Company has exercised its right to redeem all of the Notes as described under
Section 5.1, or at the Company's option, prior to such Change of Control but after it is publicly announced, the Company will mail a notice
(the "Change of Control Offer") to each Holder, with a copy to the Trustee, stating: 

        (1)   that
a Change of Control has occurred or will occur and that such Holder has the right to require the Company to purchase such Holder's Notes at a purchase price in cash
equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on a record date to receive interest on
the relevant interest payment date) (the "Change of Control Payment"); 

        (2)   the
repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, or such later date as is necessary
to comply with the requirements under the Exchange Act) (the "Change of Control Payment Date"); provided that the
Change of Control Payment Date may not occur prior to the Change of Control; and 

        (3)   the
procedures determined by the Company, consistent with this Indenture, that a Holder must follow in order to have its Notes repurchased. 

53

 

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

        (1)   accept
for payment all Notes or portions of Notes (of $2,000 or an integral multiple of $1,000 in excess thereof) properly tendered and not withdrawn pursuant to
the Change of Control Offer; 

        (2)   deposit,
to the extent not previously deposited for such purpose, with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or
portions of Notes so tendered; and 

        (3)   deliver
or cause to be delivered to the Trustee the Notes, to the extent not previously delivered for such purpose, so accepted and an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being purchased by the Company. 

        (d)   The
Paying Agent will promptly mail to each Holder so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail or
deliver (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any;  provided that each such new Note
will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Paying Agent will
deliver the Change of Control Payment for such Notes in global form registered in the name of or held by The Depository Trust Company or its nominee in immediately available funds to The Depository
Trust Company or its nominee, as the case may be, as the registered Holder of such global Note. 

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

        (f)    The
Change of Control provisions described in this Section 3.10 will be applicable whether or not any other provisions of this
Indenture are applicable. 

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

        (h)   The
Company will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to this Section 3.10. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in this
Indenture by virtue of the conflict. 

        SECTION 3.11.    Future
Subsidiary Guarantors. (a) The Company will cause each Restricted Subsidiary (other than a Foreign
Subsidiary) that Guarantees, on the Issue Date or any time thereafter, Indebtedness of the Company under the Senior Secured Credit Agreement to execute and deliver to the Trustee a supplemental
indenture pursuant to which such Restricted Subsidiary will unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest in
respect of the Notes on a senior unsecured basis and all other obligations under this Indenture on an unsecured basis. Notwithstanding the foregoing, in the event (1) a Subsidiary Guarantor is
released and discharged in full from all of its obligations under its Guarantees of (i) the Senior Secured Credit Agreement and (ii) all other Indebtedness of the Company and its
Restricted Subsidiaries and (2) such Subsidiary Guarantor has not Incurred any Indebtedness in reliance on its status as a Subsidiary Guarantor under
Section 3.3 or such Subsidiary Guarantor's obligations under 

54

 

such
Indebtedness are satisfied in full and discharged or are otherwise permitted to be Incurred by a Restricted Subsidiary (other than a Subsidiary Guarantor) under
Section 3.3(b), then the Subsidiary Guarantee of such Subsidiary Guarantor shall be automatically and unconditionally released or discharged. 

        (b)   The
obligations of each Subsidiary Guarantor will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such
Subsidiary Guarantor (including, without limitation, any Guarantees under the Senior Secured Credit Agreement) and after giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture, result in
the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. 

        (c)   Each
Subsidiary Guarantee shall also be released in accordance with the provisions of Section 10.2. 

        SECTION 3.12.    Limitation
on Lines of Business. The Company will not, and will not permit any Restricted Subsidiary to, engage in any
material business other than the Oil and Gas Business. 

        SECTION 3.13.    Payments
for Consent. Neither the Company nor any of its Restricted Subsidiaries will, directly or indirectly, pay or cause
to be paid any consideration, whether by way of interest, fees or otherwise, to any Holder 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 that consent, waive or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or amendment. 

        SECTION 3.14.    Limitation
on the Sale of Capital Stock of Restricted Subsidiaries. (a) The Company will not, and will not permit
any Restricted Subsidiary to, transfer, convey, sell, lease or otherwise dispose
of any Voting Stock of any Restricted Subsidiary or, with respect to a Restricted Subsidiary, to issue any of the Voting Stock of a Restricted Subsidiary (other than, if necessary, shares of its
Voting Stock constituting directors' qualifying shares) to any Person except: 

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

        (2)   in
compliance with Section 3.8 and immediately after giving effect to such issuance or sale, such Restricted Subsidiary would
continue to be a Restricted Subsidiary. 

        (b)   Notwithstanding
Section 3.14(a), the Company and its Restricted Subsidiaries may sell all the Voting Stock of a Restricted Subsidiary
as long as the Company or its Restricted Subsidiaries comply with the terms of Section 3.8 (it being understood that only such portion of the Net Available
Cash, if any, as is required to be applied on the date of such transaction in accordance with the terms of this Indenture needs to be applied in accordance therewith at such time). 

        SECTION 3.15.    Effectiveness
of Covenants. (a) Following the first Business Day on which: 

        (1)   the
Notes have an Investment Grade Rating from both of the Rating Agencies; and 

        (2)   no
Default has occurred and is continuing under this Indenture, 

55

  

the Company and its Restricted Subsidiaries will not be subject to Sections 3.3, 3.4, 3.7,
3.8, 3.9, 3.12, 3.14 and 4.1(a)(3),
(collectively, the "Suspended Covenants"). 

        (b)   If
at any time the Notes' credit rating is downgraded from an Investment Grade Rating by any Rating Agency or a Default or Event of Default occurs and is continuing,
then the Suspended Covenants will thereafter be reinstated as if such covenants had never been suspended (the "Reinstatement Date") and thereafter be applicable
pursuant to the terms of this Indenture (including in connection with performing any calculation or assessment to determine compliance with the terms of this Indenture), unless and until the Notes
subsequently attain an Investment Grade Rating (in which event the Suspended Covenants shall no longer be in effect for such time that the Notes maintain an Investment Grade Rating and no
Default or Event of Default has occurred and is continuing); provided, however, that no Default, Event of Default or breach of any kind shall be deemed
to exist under this Indenture, the Notes or the Subsidiary Guarantees with respect to the Suspended Covenants based on, and none of the Company or any of its Subsidiaries shall bear any liability for,
any actions taken or events occurring after the Notes attain an Investment Grade Rating and before any reinstatement of such Suspended Covenants as provided above, or any actions taken at any time
pursuant to any contractual obligation arising prior to such reinstatement, regardless of whether such actions or events would have been permitted if the applicable Suspended Covenants remained in
effect during such period. The period of time between the date of suspension of the covenants and the Reinstatement Date is referred to as the "Suspension Period." 

        (c)   On
the Reinstatement Date, all Indebtedness Incurred during the Suspension Period will be classified to have been Incurred pursuant to
Section 3.3(a) or one of the clauses set forth in Section 3.3(b) (to the extent such Indebtedness would be
permitted to be Incurred thereunder as of the Reinstatement Date and after giving effect to Indebtedness Incurred prior to the Suspension Period and outstanding on the Reinstatement Date). To the
extent such Indebtedness would not be so permitted to be Incurred pursuant to Section 3.3, such Indebtedness will be deemed to have been outstanding on the Issue
Date, so that it is classified as permitted under Section 3.3(b)(4)(b). Calculations made after the Reinstatement Date of the amount available to be made as
Restricted Payments pursuant to Section 3.4 will be made as though Section 3.4 had been in effect since the Issue Date and
throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will reduce the amount available to be made as Restricted Payments pursuant to
Section 3.4(a). 

        (d)   During
any period when the Suspended Covenants are suspended, the Board of Directors of the Company may not designate any of the Company's Subsidiaries as Unrestricted
Subsidiaries pursuant to this Indenture. 

        SECTION 3.16.    Maintenance
of Office or Agency. The Company shall 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 of the Trustee, at 100 Wall Street, Suite 1600, New York, NY 10005, shall be such office or agency of the Company
for such purposes, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company shall 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 

56

 

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 Borough of Manhattan, The City of New York for such purposes. The Company shall 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 3.17.    Money
for Note Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent, it shall, on or
before each due date of the principal of (or premium, if any) or interest on any of the Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to
pay the principal of (or premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the
Trustee in writing of its action or failure to so act. 

        Whenever
the Company shall have one or more Paying Agents for the Notes, it shall, on or before each due date of the principal of (or premium, if any) or interest on any Notes,
deposit with any Paying Agent a sum in same day funds (or New York Clearing House funds (or such other funds as may be acceptable to the Paying Agent) if such deposit is made
prior to the date on which such deposit is required to be made) that shall be available to the Trustee by 10:00 a.m. New York City time on such due date sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is
the Trustee) the Company shall promptly notify the Trustee in writing of such action or any failure to so act. 

        The
Company shall cause each Paying Agent (other than the Trustee) to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section 3.17, that such Paying Agent shall: 

        (a)   hold
all sums held by it for the payment of the principal of (and premium, if any) or interest on Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein provided; 

        (b)   give
the Trustee prompt written notice of any default by the Company (or any other obligor upon the Notes) in the making of any payment of principal
(and premium, if any) or interest; and 

        (c)   at
any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent. 

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

        Any
money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (or premium, if any) or interest on any Note
and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid, without liability for interest earned thereon, to the Company on Company
Order, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease;  provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment to the Company, may at the expense of the
Company cause to be published once, in a leading daily newspaper (if practicable, The Wall Street Journal (Eastern Edition)) printed in the
English language and of general circulation in New York City, notice 

57

 

that
such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication nor shall it be later than two years after
such principal (or premium, if any) or interest shall have become due and payable, subject to any applicable abandoned property law, any unclaimed balance of such money then remaining shall be
repaid to the Company. The Company shall pay all publication costs incurred by the Trustee pursuant to its duties under this Section 3.17. 

        SECTION 3.18.    Corporate
Existence. Subject to Article IV, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate existence and that of each Restricted Subsidiary and the corporate rights (charter and statutory) licenses and
franchises of the Company and each Restricted Subsidiary; provided, however, that the Company shall not be required to preserve any such existence
(except the Company), right, license or franchise if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the
Company and each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not, and shall not be, disadvantageous in any material respect to the Holders. 

        SECTION 3.19.    Payment
of Taxes and Other Claims. The Company shall pay or discharge or cause to be paid or discharged, before the same
shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company
or any Subsidiary and (ii) all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a material liability or lien upon the property of the Company or any
Restricted Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good
faith judgment of management of the Company) are being maintained in accordance with GAAP. 

        SECTION 3.20.    Maintenance
of Properties. The Company shall cause all material properties owned by the Company or any Restricted
Subsidiary or used or held for use in the conduct of its business or the business of any Restricted Subsidiary to be maintained and kept in normal condition, repair and working order and shall cause
to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that nothing in this Section shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any
Restricted Subsidiary and not adverse in any material respect to the Holders. 

        SECTION 3.21.    Compliance
with Laws. The Company shall comply, and shall cause each of its Restricted Subsidiaries to comply, with all
applicable statutes, rules, regulations, orders and restrictions of the United States of America, all states and municipalities thereof, and of any governmental regulatory authority of any
thereof, in respect of the conduct of their respective businesses and the ownership of their respective properties, except for such noncompliances as would not in the aggregate have a material adverse
effect on the financial condition or results of operations of the Company and its Restricted Subsidiaries, taken as a whole. 

        SECTION 3.22.    Compliance
Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year
of the Company a certificate executed by the Company's principal executive officer, principal accounting officer or principal financial officer stating that in the course of the performance by the
signer of his or her duties as such officer 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 

58

 

to
take with respect thereto. The Company also shall comply with TIA § 314(a)(4). An Officers' Certificate shall also notify the Trustee should the then current fiscal year be
changed to end on any date other than on December 31. 

 
 

ARTICLE IV    
    
    Successor Company and Successor Subsidiary Guarantor  
    

        SECTION 4.1.    Merger and Consolidation (a). The Company will not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to, any Person, unless: 

        (1)   the
resulting, surviving or transferee Person (the "Successor Company") will be a corporation, partnership, trust or limited
liability company organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and the Successor Company
(if not the Company) will expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the
Notes and this Indenture; provided, that if the Successor Company is not a corporation, a corporate Wholly Owned Subsidiary that is a Restricted
Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia shall become a co-issuer of the Notes; 

        (2)   immediately
after giving effect to such transaction (and treating any Indebtedness not previously an obligation of the Company or any of its Restricted
Subsidiaries that becomes an obligation of the Successor Company or any Subsidiary of the Successor Company as a result of such transaction as having been Incurred by the Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; 

        (3)   immediately
after giving effect to such transaction, the Successor Company would be able to Incur at least $1.00 of additional Indebtedness pursuant to
Section 3.3(a); 

        (4)   each
Subsidiary Guarantor (unless it is the other party to the transactions above, in which case clause (1) shall apply) shall have by supplemental indenture
confirmed that its Subsidiary Guarantee shall apply to such Person's obligations in respect of this Indenture and the Notes; and 

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

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

        (c)   The
predecessor Company will be released from its obligations under this Indenture and the Successor Company will succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture, but, in the case of a lease of all or substantially all its assets, the predecessor Company will not be released from the obligation to pay
the principal of and interest on the Notes. 

        (d)   Notwithstanding
Section 4.1(a)(2) and (3), (1) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties
and assets to the Company and (2) the Company may merge with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing the Company in another jurisdiction
to realize tax benefits; provided that, in the case of a 

59

 

Restricted
Subsidiary that merges into the Company, the Company will not be required to comply with Section 4.1(a)(5). 

        (e)   In
addition, the Company will not permit any Subsidiary Guarantor to consolidate with or merge with or into any Person (other than the Company or another Subsidiary
Guarantor) and will not permit the conveyance, transfer or lease of all or substantially all of the assets of any Subsidiary Guarantor (other than to the Company or another Subsidiary Guarantor)  unless:

        (1)   (a)
if such entity remains a Subsidiary Guarantor, the resulting, surviving or transferee Person will be a corporation, partnership, trust or limited liability company
organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and shall
have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person's obligations in respect of this Indenture and the Notes; (b) immediately after giving effect
to such transaction (and treating any Indebtedness not previously an obligation of the Company or any of its Subsidiaries that becomes an obligation of the resulting, surviving or transferee
Person or any Restricted Subsidiary as a result of such transaction as having been Incurred by such Person or such Restricted Subsidiary at the time of such transaction), no Default of Event of
Default shall have occurred and be continuing; and (c) the Company will have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this Indenture; and 

        (2)   if
applicable, the transaction is made in compliance with Section 3.8 (it being understood that only such portion of the Net
Available Cash, if any, as is required to be applied on the date of such transaction in accordance with the terms of this Indenture needs to be applied in accordance therewith at such time),
Section 3.14 and this Article IV. 

 
 

ARTICLE V    
    
    Redemption of Notes  
    

        SECTION 5.1.    Optional Redemption. The Notes may be redeemed, as a whole or from time to time in part, subject to
the conditions and at the redemption prices specified in paragraph 5 of the form of Notes set forth in Exhibit A hereto, which is hereby incorporated by reference and made a part of this
Indenture, together with accrued and unpaid interest to the Redemption Date (as defined below). 

        SECTION 5.2.    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. 

        SECTION 5.3.    Election
to Redeem; Notice to Trustee. The election of the Company to redeem any Notes pursuant to
Section 5.1 shall be evidenced by a Board Resolution. 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 45 days prior to the redemption date (the "Redemption Date") fixed by the Company or 15 days prior to the date on which notice is
given to the Holders (except as provided in Section 5.5 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 5.4. Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of
no effect. 

        SECTION 5.4.    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 

60

 

outstanding
Notes not previously called for redemption, in compliance with the requirements of the principal national 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 in its sole discretion shall deem fair and appropriate (and in
such manner as complies with applicable legal requirements), and which may provide for the selection for redemption of portions of the principal of the Notes (equal to $2,000 or in an integral
multiple of $1,000 in excess thereof); provided, however, no Notes of $2,000 in principal amount or less shall be redeemed in part. If any Note is to be
redeemed in part only, the notice of redemption relating to such Note will state the portion of the principal amount thereof to be redeemed. 

        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 method it has chosen for
the selection of Notes and the principal amount thereof to be redeemed. 

        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 5.5.    Notice
of Redemption. Notice of redemption shall be given in the manner provided for in
Section 11.2 not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed. At the Company's request,
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 45 days (or such shorter period of time as shall be satisfactory to the Trustee) prior to the Redemption Date, an Officers' Certificate requesting that the Trustee give
such notice at the Company's expense and setting forth the information to be stated in such notice as provided in the following items. 

        All
notices of redemption shall state: 

          (i)  the
Redemption Date, 

         (ii)  the
redemption price and the amount of accrued interest to the Redemption Date payable as provided in Section 5.7, if any, 

        (iii)  if
less than all outstanding Notes are to be redeemed, the method for selecting the Notes 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, 

        (iv)  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 shall receive, without charge, a new Note or Notes of authorized denominations for the principal amount thereof remaining unredeemed, 

         (v)  that
on the Redemption Date the redemption price (and accrued interest, if any, to the Redemption Date payable as provided in Section 5.7) shall 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 to be redeemed) shall cease to accrue on and after said date, 

        (vi)  the
place or places where such Notes are to be surrendered for payment of the redemption price and accrued interest, if any, 

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

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

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        (ix)  the
CUSIP number, 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, and any
redemption shall not be affected by any defect in such CUSIP numbers, and 

         (x)  the
paragraph of the Notes pursuant to which the Notes are to be redeemed. 

        SECTION 5.6.    Deposit
of Redemption Price. Prior to 10:00 a.m., New York City time, on any Redemption Date, the Company
shall deposit with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary that is a Domestic Subsidiary is a Paying Agent, shall segregate and hold in trust as provided
in Section 2.4) 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 other
than Notes or portions of Notes called for redemption that are beneficially owned by the Company and have been delivered by the Company to the Trustee for cancellation. 

        SECTION 5.7.    Notes
Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Notes or portions of Notes so 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 5.8.    Notes
Redeemed in Part. Any Note which is to be redeemed only in part (pursuant to the provisions of this Article) shall be
surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 3.16 (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 issued in denominations of $2,000 or an integral multiple of $1,000 in excess thereof.
 

 
 

ARTICLE VI    
    
    Defaults and Remedies  
    

        SECTION 6.1.    Events of Default. Each of the following is an "Event
of Default": 

        (1)   default
in any payment of interest on any Note when due, continued for 30 days; 

        (2)   default
in the payment of principal of or premium, if any, on any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise; 

        (3)   failure
by the Company or any Subsidiary Guarantor to comply with its obligations under Article IV; 

        (4)   failure
by the Company to comply for 30 days after notice with any of its obligations pursuant to Sections 3.3,
3.4, 3.5, 3.6, 3.7, 3.8,
3.9, 3.10, 3.11, 3.12, 3.13
and 3.14 (in each case, other than a failure to purchase Notes which shall constitute an Event of Default under clause (2) above; 

62

 

        (5)   failure
by the Company to comply for 60 days after notice with its other agreements contained in this Indenture (other than a failure to comply with
Section 3.2) or a failure by the Company to comply for 90 days after notice with its agreements pursuant to
Section 3.2; 

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

        (a)   is
caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness ("payment default"); or 

        (b)   results
in the acceleration of such Indebtedness prior to its maturity (the "cross acceleration provision"); 

and,
in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such outstanding Indebtedness under which there is an outstanding uncured payment
default or the maturity of which has been and remains so accelerated, aggregates $15.0 million or more; 

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

        (A)  commences
a voluntary case or voluntary proceeding; 

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

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

        (D)  makes
a general assignment of substantially all of its property for the benefit of its creditors; 

        (E)  transmits
its written or oral consent to or acquiescence in the institution of a bankruptcy proceeding or other collective proceeding for relief by or against its
creditors generally; 

        (F)  takes
any corporate action to authorize or effect any of the foregoing; or 

        (G)  takes
any comparable action under any foreign laws relating to insolvency; 

together,
the "bankruptcy provisions"); 

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

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

63

  

        (B)  appoints
a Custodian for all or substantially all of the property of the Company or any Significant Subsidiary or a group of Restricted Subsidiaries that, taken together
(as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries) would constitute a Significant Subsidiary, pursuant to or within the meaning of the
Bankruptcy Law; 

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

        (D)  in
each case, the order, decree or relief remains unstayed or not dismissed and in effect for 60 days following the entry, issuance or effective
date thereof; 

        (9)   failure
by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $15.0 million (net of any amounts
that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days after such judgment
becomes final and no longer subject to appeal (the "judgment default provision"); or 

        (10) any
Subsidiary Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that, taken together as of the latest audited consolidated financial statements
for the Company and its Restricted Subsidiaries, would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of this Indenture) or is declared
null and void in a judicial proceeding, or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that, taken together as of the latest audited consolidated
financial statements of the Company and its Restricted Subsidiaries, would constitute a Significant Subsidiary denies or disaffirms its obligations under this Indenture or its Subsidiary Guarantee. 

        However,
a default under clauses (4) and (5) of this Section 6.1 shall not constitute an Event of Default until the Trustee or the
Holders of 25% in principal amount of the outstanding Notes notify the Company in writing of the default and the Company does not cure such default within the time specified in clauses (4)
and (5) of this Section 6.1 after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default." 

        The
foregoing shall 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, promptly, but in no event later than 30 days after, a senior officer of the Company becomes aware of any events which would constitute an
Event of Default under clauses (3), (4), (5), (6), (7), (8), (9) or (10) of this Section 6.1 in the form of an Officers' Certificate, which
Officers' Certificate shall set forth in reasonable detail the status of such Event of Default and what action the Company is taking or proposing to take in respect thereof. 

        SECTION 6.2.    Acceleration.
If an Event of Default (other than an Event of Default described in clauses (7) and (8) of
Section 6.1) has occurred and is continuing, the Trustee by written notice to the Company, or the Holders of at least 25% in principal amount of the outstanding
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, premium, if any, and accrued and unpaid interest, if any,
on all the Notes to be due and payable. Such notice must specify the Event of Default and state that such notice is a "Notice of Acceleration." Upon such a declaration, such principal, premium and
accrued and unpaid interest will be due and payable immediately. 

64

 

        In
the event of a declaration of acceleration of the Notes because an Event of Default described in clause (6) of Section 6.1 has occurred and
is continuing, the declaration of acceleration of the Notes shall be automatically annulled if the default triggering such Event of Default pursuant to clause (6) of
Section 6.1 shall be remedied or cured by the Company or a Restricted Subsidiary or waived by the holders of the relevant Indebtedness within 20 days after
the written notice of declaration of acceleration of the Notes with respect thereto is received by the Company and if (1) the annulment of the acceleration of the Notes would not conflict with
any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest on the Notes that became due solely
because of the acceleration of the Notes, have been cured or waived. 

        If
an Event of Default described in clauses (7) or (8) of Section 6.1 occurs and is continuing, the principal of, premium, if any, and
accrued and unpaid interest on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. 

        At
any time after a declaration of acceleration, but before a judgment or decree for the payment of the money due has been obtained by the Trustee, the Holders of a majority in principal
amount of the
outstanding Notes by notice to the Trustee and the Company (including, without limitation, waivers and consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes)
may rescind and annul such declaration of acceleration and its consequences; provided, that (i) rescission would not conflict with any judgment
or decree of a court of competent jurisdiction and (ii) all existing Events of Default, other than nonpayment of the principal of, premium, if any, and interest on the Notes that have become
due solely by such declaration of acceleration, have been cured or waived. 

        SECTION 6.3.    Other
Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding
at law or in equity to collect the payment of principal of (or 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 Holder in
exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. Except as otherwise provided in
Section 2.7 with respect to the replacement of mutilated, destroyed, lost or wrongfully taken Notes, no remedy is exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law. 

        SECTION 6.4.    Waiver
of Past Defaults. The Holders of a majority in principal amount of the outstanding Notes by notice to the Trustee may
waive (including, without limitation, waivers and consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) an existing or past Default or Event of Default and
its consequences except (i) a Default or Event of Default in the payment of the principal of, premium or interest on, a Note or (ii) a Default or Event of Default in respect of a
provision that under Section 9.2 cannot be amended without the consent of each Holder affected. When a Default or Event of Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto. 

        SECTION 6.5.    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 Sections 7.1 and 7.2, that the Trustee determines is unduly prejudicial to
the rights of other Holders or 

65

 

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 6.6.    Limitation
on Suits. Subject to Section 7.1, 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 Holders have offered to
the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no Holder may
pursue any remedy with respect to this Indenture or the Notes unless: 

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

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

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

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

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

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

        SECTION 6.7.    Rights
of Holders to Receive Payment. Notwithstanding any other provision of this Indenture (including, without limitation,
Section 6.6), the right of any Holder to receive payment of principal of, premium, if any, or interest on the Notes held by such Holder, on or after the respective
due dates expressed in the Notes, 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 6.8.    Collection
Suit by Trustee. If an Event of Default specified in clauses (1) or (2) of
Section 6.1 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount
then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.7. 

        SECTION 6.9.    Trustee
May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders allowed in any judicial proceedings relative to the Company, its Subsidiaries or its 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, its agents and its counsel pursuant to
Section 7.7 and any other amounts due the Trustee hereunder. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder 

66

 

thereof,
or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 

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

        First:
to the Trustee for amounts due under Section 7.7; 

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

        Third:
to the Company. 

        The
Trustee may, upon prior written notice to the Company, fix a record date and payment date for any payment to Holders pursuant to this Section. At least 15 days before such
record date, the Company shall mail to each Holder 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 does not apply
to a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in outstanding principal
amount of the Notes. 

 
 

ARTICLE VII    
    
    Trustee  
    

        SECTION 7.1.    Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the
conduct of such Person's own affairs; provided that if an Event of Default occurs and is continuing, the Trustee shall 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 Holders have offered the Trustee indemnity or security satisfactory to the
Trustee against loss, liability or expense. 

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

        (1)   the
Trustee undertakes to perform such duties and only such duties as are specifically set forth in 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 otherwise verify the contents thereof). 

67

 

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

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

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

        (3)   the
Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to
Section 6.5 or Section 6.6. 

        (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 any 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 and to the provisions of the TIA. 

        (h)   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 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 7.2.    Rights
of Trustee. (a) The Trustee may conclusively rely and shall be protected in acting or refraining from acting
upon any paper or document believed by it to be genuine and to have been signed or presented by the proper Person or Persons. The Trustee need not investigate any fact or matter stated in
the document. 

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

        (c)   The
Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any attorney or 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 bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, notice,
request, direction, consent, order, bond or other paper or document; but the Trustee may make such further inquiry or 

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investigation
into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company and its Subsidiaries at reasonable times and in a reasonable manner, upon reasonable prior written notice to the Company, personally or by agent or attorney at the sole cost of
the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. 

        (g)   The
Trustee shall not be deemed to have knowledge of any Default or Event of Default except (i) during any period it is serving as Registrar and Paying Agent for
the Notes, any Event of Default occurring pursuant to Sections 6.1(1) and 6.1(2), or (ii) any Default or Event of Default
of which a Responsible Officer shall have received written notification or obtained "actual knowledge." "Actual knowledge" shall mean the actual fact or statement of knowing by a Responsible Officer
without independent investigation with respect thereto. 

        (h)   Delivery
of the reports, information and documents to the Trustee pursuant to Section 3.2 is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). 

        (i)    In
no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss
of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. 

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

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

        SECTION 7.3.    Individual
Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of 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 or co-paying agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11. 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 SEC for permission to continue acting as Trustee or (iii) resign. 

        SECTION 7.4.    Trustee's
Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use of the Notes or the proceeds from the Notes, and it shall not be responsible for any statement of the Company in this
Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee's certificate of authentication or for the use or application of any funds received
by any Paying Agent other than the Trustee. 

        SECTION 7.5.    Notice
of Defaults. If a Default or Event of Default occurs and is continuing and if a Responsible Officer has actual
knowledge thereof, the Trustee shall mail to each Holder notice of the Default or Event of Default within 90 days after the Responsible Officer obtains actual knowledge 

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of
a Default or Event of Default. Except in the case of a Default or Event of Default in payment of principal of, premium (if any), or interest on any Note (including payments pursuant to the
required repurchase provisions of such Note, if any), the Trustee may withhold the notice if and so long as its board of directors, a committee of its board of directors or a committee of its
Responsible Officers or a Responsible Officer in good faith determines that withholding notice is in the interests of Holders. 

        SECTION 7.6.    Reports
by Trustee to Holders. As promptly as practicable after each January 15 beginning with the January 15
following the date of this Indenture, and in any event prior to February 15 in each year, the Trustee shall mail to each Holder a brief report dated as of such January 15 that complies
with TIA § 313(a), if and to the extent such report may be required by the TIA. The Trustee also shall comply with TIA § 313(b). The Trustee shall also transmit
by mail all reports required by TIA § 313(c). 

        A
copy of each report at the time of its mailing to Holders 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 in writing whenever the Notes become listed on any stock exchange and of any delisting thereof. 

        SECTION 7.7.    Compensation
and Indemnity. The Company and the Subsidiary Guarantors, jointly and severally, shall pay to the Trustee from
time to time such compensation for its services as the parties shall agree in writing from time to time. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company and the Subsidiary Guarantors, jointly and severally, shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by it, including, but not limited to, costs of collection, costs of preparing and reviewing reports, certificates and other documents, costs of preparation
and mailing of notices to Holders and reasonable costs of counsel retained by the Trustee in connection with the delivery of an Opinion of Counsel or otherwise, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company and the Subsidiary
Guarantors, jointly and severally, shall indemnify the Trustee, and each of its officers, directors, counsel and agents, against any and all loss, liability or expense (including, but not limited to,
reasonable attorneys' fees and expenses) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses
of enforcing this Indenture (including this Section 7.7) and the Notes and of defending itself against any claims (whether asserted by any Holder, the
Company or otherwise). The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may have separate counsel and the Company shall pay the fees and expenses of such counsel. The Company and the Subsidiary
Guarantors need not reimburse any expense or indemnify against any loss, liability or expense incurred
by the Trustee or any other indemnified Person through the Trustee's or such indemnified Person's own willful misconduct, negligence or bad faith, subject to the exceptions contained in
Section 7.1(c) hereof. 

        To
secure the Company's and the Subsidiary Guarantors' payment obligations in this Section, 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 interest on particular Notes. The Trustee's right to receive payment of any amounts due under this
Section 7.7 shall not be subordinate to any other liability or indebtedness of the Company or the Subsidiary Guarantors. 

        The
Company's payment obligations pursuant to this Section and any lien arising hereunder shall survive the discharge of this Indenture and the resignation or removal of the Trustee.
When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.1(7) or (8), the expenses are intended
to constitute expenses of administration under any Bankruptcy Law. 

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        SECTION 7.8.    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 Company and the Trustee in writing. The Company shall remove the Trustee if: 

        (1)   the
Trustee fails to comply with Section 7.10; 

        (2)   the
Trustee is adjudged bankrupt or insolvent; 

        (3)   a
receiver or other public officer takes charge of the Trustee or its property; or 

        (4)   the
Trustee otherwise becomes incapable of acting. 

        A
resignation or removal of the Trustee and the appointment of a Successor Trustee shall become effective only upon the Successor Trustee's acceptance of appointment as provided in this
Section 7.8. If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal amount of the Notes, or if a vacancy exists in the office of Trustee for any reason
(the Trustee in such event being referred to herein as the retiring Trustee), the Company shall, by a Board Resolution, 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 Holders.
The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided that all sums owing to the Trustee
hereunder have been paid and subject to the lien provided for in Section 7.7. 

        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 expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee. 

        If
the Trustee fails to comply with Section 7.10, unless the Trustee's duty to resign is stayed as provided in TIA § 310(b), any
Holder who satisfies the requirements of TIA § 310(b) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 

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

        SECTION 7.9.    Successor Trustee
by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation, banking association or other entity, the resulting, surviving or transferee entity without any further act shall be
the successor Trustee. 

        In
case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by 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; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have. 

        SECTION 7.10.    Eligibility;
Disqualification. The Trustee shall at all times satisfy the requirements of TIA § 310(a).
The Trustee shall have a combined capital and surplus of at least $150 million as set forth in its most recent filed annual report of condition. The Trustee shall comply with TIA
§ 310(b). 

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        SECTION 7.11.    Preferential Collection of Claims Against Company. If and when the Trustee shall be or become a creditor of the Company,
the Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be
subject to TIA § 311(a) to the extent indicated. 

 
 

ARTICLE VIII    
    
    Discharge of Indenture; Defeasance  
    

        SECTION 8.1.    Satisfaction and Discharge of Indenture. This Indenture shall upon Company Order cease to be of
further effect (except as to any surviving rights of registration of transfer or exchange of Notes herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when 

        (1)   either

        (A)  all
Notes theretofore authenticated and delivered (other than (i) Notes which have been mutilated, destroyed, lost or wrongfully taken and which have been
replaced or paid as provided in Section 2.7 and (ii) Notes for which payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section 3.17) have been delivered to the Trustee for cancellation; or 

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

          (i)  have
become due and payable, or 

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

        (iii)  are
to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company, 

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

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

        (3)   the
Company has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied with. 

        Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.7, the obligations of the Trustee or the Company to
any Authenticating Agent under Section 2.2 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 8.3 and the last paragraph of Section 3.17 shall survive such satisfaction and discharge. 

        SECTION 8.2.    Discharge
of Liability on Notes; Defeasance. (a) Subject to Section 8.2(b), the
Company at any time may terminate (i) all its obligations under the Notes and the Indenture and all obligations of the Subsidiary Guarantors under the Subsidiary Guarantees and the Indenture
("legal defeasance"), and after giving effect to such legal defeasance, any omission to comply with such 

72

 

obligations
shall no longer constitute a Default or Event of Default or (ii) its obligations under clause (3) of Section 4.1(a) and
Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7,
3.8, 3.9, 3.10, 3.11, 3.12, 3.13,
3.14, 3.15 or 3.19 and the Company may omit to comply with and shall have no liability in respect of any term, condition
or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply with such covenants shall no longer constitute a Default or an Event of Default under clauses (3),
(4) and (5) of Section 6.1, and the events specified in clauses (6), (7) (but only with respect to a Significant Subsidiary or
group of Restricted Subsidiaries that would constitute a Significant Subsidiary), (8) and (9) of Section 6.1 shall no longer constitute an Event of
Default (clause (ii) being referred to as the "Covenant Defeasance"), but except as specified above, the remainder of the 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 legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect to the Notes, and the Subsidiary Guarantees
in effect at such time 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
clauses (4) or (5) of Section 6.1 (as such clauses relate to Sections 3.2, 3.3,
3.4, 3.5, 3.6, 3.7, 3.8,
3.9, 3.10, 3.11, 3.12, 3.13, 3.14,
3.15 or 3.19), or in clauses (6), (7) (but only with respect to a Significant Subsidiary or group of Restricted
Subsidiaries that would constitute a Significant Subsidiary), (8) and (9) of Section 6.1 or because of the failure of the Company to comply
with clause (3) of Section 4.1(a). 

        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. 

        (b)   The
Company may exercise its legal defeasance option or its Covenant Defeasance option only if: 

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

         (ii)  the
Company delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion (or if nationally
recognized independent accounting firms no longer routinely express such opinions, a certificate from the chief financial officer of the Company expressing his or her opinion) that the payments of
principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment shall provide cash at such times and in such
amounts as shall be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be; 

        (iii)  no
Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than Defaults and Events of Default arising out of the
incurrence of Indebtedness used to fund such deposit) or, with respect to the Company under clause (7) of Section 6.1, on the 123rd day after such
date of deposit; 

        (iv)  such
legal defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a Default under, the Indenture or any other material agreement
or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; 

         (v)  the
Company shall have delivered to the Trustee an Opinion of Counsel (subject to customary assumptions and exclusions) to the effect that, assuming no intervening
bankruptcy 

73

 

of
the Company between the date of deposit and the 123rd day following the deposit and that no Holder of the Notes is an insider of the Company within the meaning of the Bankruptcy Law, after
the 123rd day following the deposit, the trust funds shall not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' right
generally; 

        (vi)  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 Investment Company Act of 1940; 

       (vii)  in
the case of legal defeasance, 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 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 Holders shall not recognize income,
gain or loss for Federal income tax purposes as a result of such defeasance and shall 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; 

      (viii)  in
the case of Covenant Defeasance, 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 Holders shall not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and Covenant Defeasance and shall 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 

        (ix)  the
Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, together stating that all conditions precedent to the defeasance and discharge
of the Notes and the Indenture as contemplated by this Article VIII have been complied with. 

        (c)   Notwithstanding
the provisions of Sections 8.2(a) and (b), the Company's obligations in
Sections 2.3, 2.4, 2.5, 2.6, 7.1,
7.2, 7.7, 7.8, 8.4, 8.5
and 8.6 shall survive until the Notes have been paid in full. Thereafter, the Company's and the Subsidiary Guarantors' obligations in
Sections 7.7, 8.4 and 8.5 shall survive. 

        SECTION 8.3.    Application
of Trust Money. Subject to Section 8.6, the Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article VIII. It shall apply the deposited money and the money from
U.S. Government Obligations through the Paying Agent and in accordance with the Notes and this Indenture to the payment of principal of premium, if any, and interest on the Notes. 

        SECTION 8.4.    Repayment
to Company. Anything herein to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from
time to time upon Company Order any money or U.S. Government Obligations held by it as provided in this Article VIII which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect legal defeasance or covenant defeasance, as applicable, provided that the Trustee shall not be required to liquidate any
U.S. Government Obligations in order to comply with the provisions of this Section 8.4. 

        Subject
to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal of,
premium, 

74

 

if
any, or interest on the Notes that remains unclaimed for two years, and, thereafter, Holders entitled to such money must look to the Company for payment as general creditors. 

        SECTION 8.5.    Indemnity
for U.S. Government Obligations. The Company shall pay and shall indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations. 

        SECTION 8.6.    Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in
accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to
this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this
Article VIII; provided, however, that, if the Company 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 Obligations
held by the Trustee or Paying Agent. 

 
 

ARTICLE IX    
    
    Amendments  
    

        SECTION 9.1.    Without Consent of Holders. The Company, the Subsidiary Guarantors and the Trustee may amend or
supplement this Indenture, the Notes and the Subsidiary Guarantees without notice to or consent of any Holder to: 

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

        (2)   provide
for the assumption by a successor of the obligations of the Company or any Subsidiary Guarantor under this Indenture; 

        (3)   provide
for uncertificated Notes in addition to or in place of certificated Notes (provided 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)   add
Guarantees with respect to the Notes; 

        (5)   release
a Subsidiary Guarantor from its obligations under its Subsidiary Guarantee or this Indenture in accordance with the applicable provisions of
this Indenture; 

        (6)   secure
the Notes; 

        (7)   add
to the covenants of the Company, any Subsidiary Guarantor or other obligor under this Indenture, the Notes or Subsidiary Guarantees, as the case may be, for the
benefit of the Holders or surrender any right or power conferred upon the Company, any Subsidiary Guarantor or other such obligor; 

        (8)   make
any change that does not adversely affect the legal or contractual rights of any Holder under this Indenture, the Notes or the Subsidiary Guarantees; 

        (9)   comply
with any requirement of the SEC in connection with the qualification of this Indenture under the TIA; 

        (10) provide
for the appointment of a successor Trustee; provided that the successor Trustee is otherwise qualified and
eligible to act as such under the terms of this Indenture; 

75

 

        (11) provide
for the issuance of Additional Notes under this Indenture in accordance with the limitations described in this Indenture; 

        (12) to
comply with the rules of any applicable securities depositary; or 

        (13) conform
the text of this Indenture, the Notes or the Subsidiary Guarantees to any provision of the section of the Registration Statement
(333-[            ]) on Form S-3 of the Company, filed with the SEC on April [            ], 2007, entitled
"Description of Notes." 

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

        SECTION 9.2.    With
Consent of Holders. The Company, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture, the
Subsidiary Guarantee or the Notes without notice to any Holder 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 or exchange offer for, Notes). Any Default or Event of Default (subject to
Section 6.4) or compliance with any provision of this Indenture, a Subsidiary Guarantee or the Notes may be waived with the written consent of the Holders of
a majority in principal amount of the Notes then outstanding (including, without limitation, waivers and consents obtained in connection with a purchase of, or tender offer or exchange offer for,
Notes). However, without the consent of each Holder of an outstanding Note affected, no amendment, supplement or waiver may: 

        (1)   reduce
the percentage in principal amount of Notes outstanding whose Holders must consent to an amendment; 

        (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 or repurchase of any Note or change the time at which any Note may be redeemed or repurchased as described under
Section 3.8, Section 3.10 or Article V or any similar provision, whether through an
amendment or waiver of Section 3.8, Section 3.10 or Article V, related definitions or
otherwise (except for amendments to the definition of "Change of Control"); 

        (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, 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 provisions of this Section 9.2 or in the waiver provisions of this Indenture; or 

        (8)   modify
the Subsidiary Guarantees in any manner adverse to the Holders. 

        It
shall not be necessary for the consent of the Holders under this Section 9.2 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment, supplement or waiver under this Indenture by any Holder given in connection with a
tender of such Holder's Notes will not be rendered invalid by such tender. 

        After
an amendment or supplement under this Section 9.2 becomes effective, the Company shall mail to Holders a notice briefly describing such
amendment or supplement. The failure to give such 

76

 

notice
to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.2. 

        SECTION 9.3.    Compliance
with Trust Indenture Act. Every amendment or supplement to this Indenture, a Subsidiary Guarantee or the Notes
shall comply with the TIA as then in effect. 

        SECTION 9.4.    Revocation
and Effect of Consents and Waivers. A consent to an amendment, supplement 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. 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, supplement or waiver becomes effective or otherwise in accordance with any related solicitation documents. After an amendment, supplement or waiver becomes effective, it shall bind every
Holder unless it makes a change described in any of clauses (1) through (10) of Section 9.2, in which case the amendment, supplement, waiver or other
action shall bind each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder's Notes. An amendment, supplement or waiver shall become
effective upon receipt by the Trustee or the Company of the requisite number of written consents, if any, under Section 9.1
or 9.2 as applicable. 

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

        SECTION 9.5.    Notation
on or Exchange of Notes. If an amendment, supplement or waiver 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 determine, 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, supplement or waiver. 

        SECTION 9.6.    Trustee
to Sign Amendments. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this
Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee
may but need not sign it. In signing any amendment, supplement or waiver the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to
Sections 7.1 and 7.2) shall be fully protected in relying upon an Officers' Certificate and an Opinion of Counsel stating that
such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any
Subsidiary Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including
Section 9.3). 

 
 

ARTICLE X    
    
    Subsidiary Guarantees  
    

        SECTION 10.1.    Guarantees. The Subsidiary Guarantors hereby, jointly and severally, unconditionally guarantee on a
senior unsecured basis and as primary obligor and not merely as surety 

77

 

to
each Holder and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the principal of, premium, if any, and interest on the Notes
and all other obligations and liabilities of the Company under this Indenture (including without limitation interest accruing after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Company or any Subsidiary Guarantor whether or not a claim for post-filing or post-petition interest is allowed
in such proceeding) (all the foregoing being hereinafter collectively called the "Obligations"). The Obligations of Subsidiary Guarantors under the Subsidiary
Guarantees shall rank equally in right of payment with other Indebtedness of such Subsidiary Guarantor, except to the extent such other Indebtedness is expressly subordinate to the obligations arising
under the Subsidiary Guarantee. Each Subsidiary 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 shall remain bound under this Article X notwithstanding any extension or renewal of any Obligation. 

        Each
Subsidiary Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Obligations and also waives notice of protest for nonpayment. Each
Subsidiary Guarantor waives notice of any default under the Notes or the Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure of 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; (e) the failure of any Holder to exercise any right or remedy against any other Subsidiary
Guarantor; or (f) any change in the ownership of the Company. 

        Each
Subsidiary Guarantor further agrees that its 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 to any security held for payment of the Obligations. 

        The
obligations of each Subsidiary 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 each Subsidiary 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 any Subsidiary Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity. 

        Each
Subsidiary Guarantor agrees that its Guarantee herein shall remain in full force and effect until payment in full of all the Obligations or such Subsidiary Guarantor is released
from its Guarantee upon the merger or the sale of all the Capital Stock or assets of the Subsidiary Guarantor in compliance with Section 10.2 or otherwise in
accordance with the terms of this Indenture. Each Subsidiary Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any 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 any Subsidiary Guarantor by virtue hereof, upon the failure of
the Company to 

78

 

pay
any of the Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, the Subsidiary Guarantors hereby jointly and severally promise to
and shall, 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). 

        Each
Subsidiary Guarantor further agrees that, as between such Subsidiary 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 its 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 Subsidiary Guarantor for the purposes of this Guarantee. 

        Each
Subsidiary 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 10.1. 

        SECTION 10.2.    Limitation
on Liability; Termination, Release and Discharge. 

        (a)   The
obligations of each Subsidiary Guarantor hereunder shall be limited to the maximum amount as shall, after giving effect to all other contingent and fixed liabilities
of such Subsidiary Guarantor (including, without limitation, any guarantees under the Senior Secured Credit Agreement) and after giving effect to any collections from or payments made by or on behalf
of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture,
result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being
void or voidable under any similar laws affecting the rights of creditors generally. 

        (b)   In
the event a Subsidiary Guarantor is sold or disposed of (whether by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of
its assets (other than by lease) and whether or not the Subsidiary Guarantor is the surviving corporation in such transaction) to a Person which is not the Company or a Restricted Subsidiary of the
Company (other than a Receivables Entity) after giving effect to the sale or other disposition, such Subsidiary Guarantor shall be released from its obligations under this Indenture and its Subsidiary
Guarantee if: (1) the sale or other disposition is in compliance with this Indenture, including Section 3.8 (it being understood that only such
portion of the Net Available Cash as is required to be applied on or before the date of such release in accordance with the terms of this Indenture needs to be applied in accordance therewith at such
time), Section 3.14 and Article IV; and (2) all the obligations of such Subsidiary Guarantor under all Credit Facilities
and any other agreements evidencing any other Indebtedness of the Company or any Restricted Subsidiary (after giving effect to the sale or other disposition) terminate upon consummation of such
transaction. 

        (c)   Each
Subsidiary Guarantor shall be deemed released and discharged in full from all its obligations under this Indenture and its Subsidiary Guarantee and such Subsidiary
Guarantee shall terminate upon the legal defeasance of the Notes pursuant to the provisions of Article VIII hereof. 

        (d)   A
Subsidiary Guarantor shall be deemed released and discharged in full from all of its obligations under this Indenture and its Subsidiary Guarantee and such Subsidiary
Guarantee shall terminate if (1) (a) such Subsidiary Guarantor is released from its Guarantees of, and all pledges and security interests granted in connection with, the Senior Secured
Credit Agreement and all other Indebtedness of the Company and its other Restricted Subsidiary and (b) such Subsidiary 

79

 

Guarantor
has not Incurred any Indebtedness in reliance on its status as a Subsidiary Guarantor under Section 3.3 or such Subsidiary Guarantor's obligations under such Indebtedness are
satisfied in full and discharged or are otherwise permitted to be Incurred by a Restricted Subsidiary (other than a Subsidiary Guarantor) under Section 3.3(b) or (2) the Company
designates such Subsidiary Guarantor as an Unrestricted Subsidiary and such designation complies with the applicable provisions of this Indenture or (3) in connection with any legal defeasance
of the Notes or upon satisfaction and discharge of this Indenture, each in accordance with the terms of this Indenture. 

        SECTION 10.3.    Right
of Contribution. Each Subsidiary Guarantor hereby agrees that to the extent that any Subsidiary Guarantor shall have
paid more than its proportionate share of any payment made on the obligations under the Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and
against the Company or any other Subsidiary Guarantor who has not paid its proportionate share of such payment. The provisions of this Section 10.3 shall in no
respect limit the obligations and liabilities of each Subsidiary Guarantor to the Trustee and the Holders, and each Subsidiary Guarantor shall remain liable to the Trustee and the Holders for the full
amount guaranteed by such Subsidiary Guarantor hereunder. 

        SECTION 10.4.    No
Subrogation. Notwithstanding any payment or payments made by each Subsidiary Guarantor hereunder, no Subsidiary
Guarantor shall be entitled to be subrogated to any of the rights of the Trustee or any Holder against the Company or any other Subsidiary Guarantor or any collateral security or guarantee or right of
offset held by the Trustee or any Holder for the payment of the Obligations, nor shall any Subsidiary Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any
other Subsidiary Guarantor in respect of payments made by such Subsidiary Guarantor hereunder, until all amounts owing to the Trustee and the Holders by the Company on account of the Obligations are
paid in full. If any amount shall be paid to any Subsidiary Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall
be held by such Subsidiary Guarantor in trust for the Trustee and the Holders, segregated from other funds of such Subsidiary Guarantor, and shall, forthwith upon receipt by such Subsidiary Guarantor,
be turned over to the Trustee in the exact form received by such Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to the Trustee, if required), to be applied against the Obligations. 

        SECTION 10.5.    Execution
and Delivery of Subsidiary Guarantee. To evidence its Subsidiary Guarantee set forth in
Section 10.1, each Subsidiary Guarantor hereby agrees that a notation of such Subsidiary Guarantee substantially in the form included in Exhibit B shall be
endorsed by an Officer of such Subsidiary Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Subsidiary Guarantor by
an Officer. 

        Each
Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 10.1 shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Subsidiary Guarantee. 

        If
an Officer whose signature is on this Indenture or on the Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Subsidiary
Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless. 

        The
delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of
the Subsidiary Guarantors. 

80

  

 
 

ARTICLE XI    
    
    Miscellaneous  
    

        SECTION 11.1.    Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control. 

        SECTION 11.2.    Notices.
Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed
as follows: 

if
to the Company: 

Cimarex
Energy Co.

1700 Lincoln Street, Suite 1800

Denver, Colorado 80203

Attention: Paul Korus

Facsimile No.: (303) 295-3494 

if
to the Trustee: 

U.S.
Bank National Association

950 17th Street, 12th Floor

Denver, Colorado 80202

Attention: Corporate Trust Services

Facsimile No.: (303) 585-6865 

        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 Holder shall be mailed to the Holder at the Holder's address as it appears on the Note Register and shall be sufficiently given if so mailed
within the time prescribed. 

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

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

        In
case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made
with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. 

        SECTION 11.3.    Communication
by Holders with other Holders. Holders may communicate pursuant to TIA § 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c). 

        SECTION 11.4.    Certificate
and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this 

81

 

Indenture,
except upon the initial issuance of Notes hereunder, the Company shall furnish to the Trustee: 

        (1)   an
Officers' Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in 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 11.5.    Statements
Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include: 

        (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 Officers' Certificate or on certificates of public officials. 

        SECTION 11.6.    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 any of its Affiliates (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 Responsible 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 11.7.    Rules
by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by, or a meeting of,
Holders. The Registrar and the Paying Agent may make reasonable rules for their functions. 

        SECTION 11.8.    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 City. 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 11.9.    Governing
Law. This Indenture, the Subsidiary Guarantees 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. No director, officer, employee, manager, member, partner, incorporator or stockholder of the
Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the Company or any Subsidiary Guarantor under the Notes, this Indenture or the Subsidiary Guarantees or
for any claim based on, in respect of, or by reason of, such obligations or their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and release shall be
part of the consideration for the issuance of the Notes. 

82

 

        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.    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 11.13.    Variable
Provisions. The Company initially appoints the Trustee as Paying Agent and Registrar and custodian with respect
to any Global Notes. 

        SECTION 11.14.    Table
of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. 

[Remainder of page left intentionally blank.] 

83

 

        IN
WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. 

	 	 	CIMAREX ENERGY CO.
	
 	
 	

By:	

 Name:

Title:
	
 	
 	

[SUBSIDIARY GUARANTOR]
	
 	
 	

By:	

 Name:

Title:
	
 	
 	

[SUBSIDIARY GUARANTOR]
	
 	
 	

By:	

 Name:

Title:
	
 	
 	

[        ],

as Trustee
	
 	
 	

By:	

 Name:

Title:

84

  

 
 

EXHIBIT A    
    

 
 

[FORM OF FACE OF GLOBAL NOTE]    
    
    [Depositary Legend, if applicable]    
    

A-1

 

	 
	 

	No. [                        ]	Principal Amount $
[                                    ],

as revised by the Schedule of Increases

and Decreases in the Global Note attached hereto
	 	CUSIP NO.
                                    

CIMAREX
ENERGY CO.

[            ] Senior Note due 2017 

        Cimarex
Energy Co., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of
[                                    ] Dollars, as revised by
the Schedule of Increases and Decreases in the Global Note attached hereto, on April
[            ], 2017. 

        Interest
Payment Dates: [            ] and [            ], commencing
[                                    ]
[            ], 20[            ]. 

        Record
Dates: [            ] and [            ]. 

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

	 	 	CIMAREX ENERGY CO.
	
 	
 	

By:	

 
	 	 	 	
 Name:

Title:
	
 	
 	

By:	

 
	 	 	 	
 Name:

Title:

	
 TRUSTEE'S CERTIFICATE OF

AUTHENTICATION
	
 Dated:
	 [TRUSTEE'S NAME],
	 as Trustee, certifies that this is one of

the Notes referred to in the Indenture.
	
 By:	

 
	 	
 Authorized Signatory

A-2

 
 
 

[FORM OF REVERSE SIDE OF GLOBAL NOTE]
  [            ]% Senior Note due 2017    

1.     Interest  

        Cimarex Energy Co., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this Note at the rate per annum shown above. 

        The
Company shall pay interest semiannually on [            ] and [            ] of each year. Interest on the Notes shall accrue
from the most recent date to which interest has been paid on the Notes or, if no interest has been paid, from [            ], 2007. The Company shall pay interest on overdue
principal or premium, if any (plus interest on overdue installments of interest to the extent lawful), at the rate borne by the Notes to the extent lawful. Interest shall be computed on the basis of a
360-day year comprised of twelve 30-day months. 

2.     Method of Payment  

        By no later than 10:00 a.m. (New York City time) on the date on which any principal of (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, or interest. The Company shall pay interest (except Defaulted
Interest) to the Persons who are registered Holders at the close of business on the [            ] and [            ] next
preceding the interest
payment date even if Notes are cancelled or repurchased 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 shall 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. Payments in
respect of Notes represented by a Global Note (including principal, premium, if any, and interest) shall be made by the transfer of immediately available funds to the accounts specified by the
Depositary. The Company shall make all payments in respect of a Definitive Note (including principal, premium, if any, and interest) by mailing a check to the registered address of each Holder thereof
as such address shall appear on the in the Registrar's books; provided, however, that payments on the
Notes represented by Definitive Notes may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Notes represented by Definitive Notes, 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). 

3.     Paying Agent and Registrar  

        Initially, [            ], the trustee under the Indenture ("Trustee"), shall act as Paying Agent and Registrar. The Company
may
appoint and change any Paying Agent or Registrar without notice to any Holder. The Company or any Wholly Owned Subsidiary that is a Domestic Subsidiary may act as Paying Agent or Registrar. 

4.     Indenture  

        The Company issued the Notes under an Indenture dated as of April [            ], 2007 (as it may be amended or
supplemented
from time to time in accordance with the terms thereof, the "Indenture"), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect from
time to time (the "Act"). Capitalized terms used 

A-3

 

herein
and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Act for a statement of
those terms. In the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. 

        The
Notes are general unsecured, senior obligations of the Company. The aggregate principal amount of Notes which may be authenticated and delivered under the Indenture is unlimited.
This Note is one of the [            ]% Senior Notes due 2017 referred to in the Indenture. The Notes include (i) $300,000,000 aggregate principal amount of the
Company's [            ]% Senior Notes due 2017 issued under the Indenture on April [            ], 2007 and registered under the
Securities Act
(the "Initial Notes"), and (ii) if and when issued, an unlimited principal amount of additional [            ]% Senior Notes due 2017 that may be issued from
time to time, under the Indenture, subsequent to April [            ], 2007 in a registered offering of the Company (the "Additional Notes" and together with the
Initial Notes, the "Notes"). The Initial Notes and Additional Notes are treated as a single class of securities under the Indenture. The Indenture imposes, among other things, certain limitations on
the Incurrence of Indebtedness by the Company and its Subsidiaries, the payment of dividends and other distributions on the Capital Stock of the Company and its Subsidiaries, the purchase or
redemption of Capital Stock of the Company and Capital Stock of such Subsidiaries, certain purchases or redemptions of Subordinated Obligations, the sale or transfer of assets and Capital Stock of
Subsidiaries, certain Sale/Leaseback Transactions involving the Company or any Restricted Subsidiary, the incurrence of certain Liens, transactions with Affiliates, mergers and consolidations,
payments for consent, the business activities and investments of the Company and its Subsidiaries and the sale of Capital Stock of Restricted Subsidiaries,  provided, however, certain of such limitations shall no longer be in effect if the Notes attain an
Investment Grade Rating from both Rating Agencies. In addition, the Indenture limits the ability of the Company and its Subsidiaries to enter into agreements that restrict distributions and dividends
from Subsidiaries and requires the Company to make available SEC information to the Holders as well as requiring certain Restricted Subsidiaries to guarantee the obligations under the Notes and
the Indenture. 

5.     Redemption 

        Except
as described below, the Notes are not redeemable until [            ], 2012. On and after [            ], 2012, the Company
may redeem all or, from time to time, a part of the Notes upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as a percentage of principal
amount) plus accrued and unpaid interest on
the Notes, if any, to the applicable Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed
during the twelve-month period beginning on [            ] of the years indicated below: 

	Year
 
	 	Percentage

	2012	 	[      ]%
	2013	 	[      ]%
	2014	 	[      ]%
	2015 and thereafter	 	100.000%

        Prior
to [            ], 2010, the Company may on any one or more occasions redeem up to 35% of the original principal amount of the Notes (including the
original principal amount of any Additional Notes) with the Net Cash Proceeds of one or more Equity Offerings at a redemption price of [            ]% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the Redemption 

A-4

 

Date
(subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date);  provided that: 

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

        (2)   the
redemption occurs within 60 days after the closing of such Equity Offering. 

        If
the optional Redemption Date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, shall be paid to the
Person in whose name the Note is registered at the close of business, on such record date, and no additional interest shall be payable to Holders whose Notes shall be subject to redemption by
the Company. 

        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 will deem to be
fair and appropriate, although no Note of $2,000 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 will 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. 

        In
addition, at any time prior to [            ], 2012, the Notes may be redeemed, in whole but not in part, at the option of the Company upon not less than
30 nor more than 60 days' prior notice mailed by first-class mail to each Holder at its registered address, at a redemption price equal to 100% of the principal amount of the Notes
redeemed plus the Applicable Premium plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant interest payment date). 

        "Applicable
Premium" means, with respect to a Note on any date of redemption prior to [            ], 2012, the greater of
(1) [            ]% of the principal amount of such Note and (2) the excess of (a) the present value at such time of (i) the redemption price of
such Note on [            ], 2012 (such redemption price being described under the first paragraph of this Section 5) plus
(ii) all required interest payments due on such Note through [            ], 2012 (but excluding accrued and unpaid interest to the Redemption Date), computed
using a discount rate equal to the Treasury Rate plus [            ] basis points, over (b) the then-outstanding principal amount of such Note. 

        "Treasury
Rate" means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the Redemption Date (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to [            ], 2012;  provided, however, that if the period from the Redemption Date to
[            ], 2012 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are
given, except that if the period from the Redemption Date to [            ], 2012 is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used. 

        The
Company is not required to make mandatory redemption payments or sinking fund payments with respect to the Notes. 

A-5

 

        The
Company and its Subsidiaries and Affiliates may at any time and from time to time acquire Notes through tender offers, open market purchases, negotiated transactions or otherwise, in
accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture. 

6.     Put Provisions  

        If a Change of Control occurs, unless the Company has exercised its right to redeem all of the Notes as described under Section 5 herein and subject to the
terms of the Indenture, each Holder will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder's
Notes at a purchase price in cash equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest payment date) as provided in, and subject to the terms of, the Indenture. The Company shall be required to make an Asset
Disposition Offer in certain circumstances described in the Indenture. 

7.     Denominations; Transfer; Exchange  

        The Notes are in registered form without coupons in denominations of principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. 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 any Note (1) for a period beginning 15 Business Days before the
mailing of a notice of a redemption of Notes to the Holders and ending at the close of business on the day of such mailing or (2) selected for redemption. 

8.     Persons Deemed Owners  

        The registered Holder of this Note may be treated as the owner of it for all purposes. 

9.     Unclaimed Money  

        If money for the payment of the principal of or premium, if any, or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its written 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 or the Paying Agent for payment. 

10.   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 Obligations for the payment of principal, premium, if any, and interest on the Notes to maturity. 

11.   Amendment, Waiver  

        Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Subsidiary Guarantees, and 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 (including, without limitation, consents obtained in connection with a purchase of, or tender offer or
exchange offer for, Notes) and (ii) subject to certain exceptions, any Default or Event of Default (other than with respect to nonpayment) or noncompliance with any provision may be waived with
the written consent of the Holders of a majority in principal amount of the then outstanding Notes (including, without limitation, waivers and consents 

A-6

 

obtained
in connection with a purchase of, or tender offer or exchange offer for, Notes). Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement the Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency, to comply with
Article IV or Article X of the Indenture in respect of the assumption by a successor of the obligations of the Company or any
Subsidiary Guarantor under the Indenture, to provide for uncertificated Notes in addition to or in place of certificated Notes, to add Guarantees with respect to the Notes or release a Subsidiary
Guarantor from its obligations under its Subsidiary Guarantee upon its designation as an Unrestricted Subsidiary or otherwise in accordance with the Indenture, to secure the Notes, to add to the
covenants of the Company, any Subsidiary Guarantor or other obligor under the Indenture, this Note or the Subsidiary Guarantees for the benefit of the Holders or that would surrender any right or
power conferred upon the Company, any Subsidiary Guarantor or any other obligor or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with any
requirement of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, to provide for the appointment of a successor trustee; to provide for the issuance of Additional
Notes in accordance with the Indenture, to comply with the rules of any applicable securities depositary or to conform the text of the Indenture, the Notes or the Subsidiary Guarantees to any
provisions of the section in the Registration Statement (333-[            ]) on Form S-3 of the Company, filed with the SEC on
[            ], 2007, entitled "Description of Notes.". 

12.   Defaults and Remedies  

        Under the Indenture, Events of Default include (each of which are more specifically described in the Indenture) (i) default for 30 days in payment
of interest when due on the Notes; (ii) default in payment of principal or premium, if any, on the Notes at Stated Maturity, upon required repurchase or upon optional redemption pursuant to
paragraph 5 hereof, upon declaration or otherwise; (iii) the failure by the Company or any Subsidiary Guarantor to comply with its obligations under Article IV of the Indenture;
(iv) failure by the Company to comply for 30 days after written notice with any of their obligations under the covenants described under Sections 3.3 through 3.14 of the
Indenture; (v) (a) the failure by the Company to comply for 60 days after written notice with their other agreements contained in the Indenture or under the Notes (other than
those referred to in (i), (ii), (iii) or (iv) above or in (v)(b) below), or (b) a failure by the Company to comply for 90 days after notice with Section 3.2 of the
Indenture; (vi) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than Indebtedness owed to the Company or a Restricted
Subsidiary, whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, which default (a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness ("payment default") or (b) results in the
acceleration of such Indebtedness prior to its maturity (the "cross acceleration provision") and, in each case, the principal amount of any such outstanding
Indebtedness, together with the principal amount of any other such Indebtedness under which there is an outstanding uncured payment of default, a payment default or the maturity of which has been and
remains so accelerated, aggregates $15.0 million or more; (vii) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary or group of
Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary (the "bankruptcy provisions"); (viii) failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments
aggregating in excess of $15.0 million (net of any amounts that a reputable and creditworthy insurance company has 

A-7

 

acknowledged
liability for in writing), which judgments are not paid, discharged, waived or stayed for a period of 60 days after such judgment becomes final and no longer subject to appeal
(the "judgment default provision"); or (ix) any Subsidiary Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that, taken together
(as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary ceases to be in full force and effect
(except as contemplated by the terms of the Indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary
Guarantors that, taken together (as of the last audited consolidated financial statements for the Company and its Restricted Subsidiaries), denies or disaffirms its obligations under the
Indenture or its Subsidiary Guarantee. However, a default under clauses (iv) and (v) 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 of the default and the Company does not cure such default within the time specified in clauses (iv) and (v) hereof after receipt of
such notice. 

        If
an Event of Default (other than an Event of Default described in (vii) hereof) occurs and is continuing, the Trustee by notice to the Company or the Holders of at least 25% in
principal amount of the outstanding Notes may declare all the Notes to be due and payable immediately. If an Event of Default described in (vii) hereof occurs and is continuing, the principal
of, premium, if any, and accrued
and unpaid interest on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Subject to certain conditions
contained in the Indenture, if the Notes are accelerated as a result of an Event of Default described in (vi) above, the declaration of acceleration shall be automatically annulled if the
default triggering such Event of Default is remedied, cured or waived within 20 days after written notice of acceleration is received by the Company and the other conditions to such annulment
are satisfied. 

        Holders
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 indemnity or
security satisfactory to it. 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 Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interest. 

13.   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 otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. 

14.   No Recourse Against Others  

        A director, officer, employee, manager, member, partner, incorporator or stockholder, as such, of the Company or any Subsidiary Guarantor shall not have any
liability for any obligations of the Company of any Subsidiary Guarantor under the Notes, the Indenture or the Subsidiary Guarantees or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes. 

15.   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 on the other side of this Note. 

A-8

 

16.   Abbreviations  

        Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the 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). 

17.   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. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers placed thereon. 

18.   Defined Terms  

        As used in this Note, terms defined in the Indenture are used herein as therein defined. 

19.   Governing Law  

        This Note shall be governed by, and construed in accordance with, the laws of the State of New York. 

        The
Company shall furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture, which has in it the text of this Note in larger type. Requests may
be made to: 

Cimarex
Energy Co.

1700 Lincoln Street, Suite 1800

Denver, Colorado 80203

Attention: Corporate Secretary

Facsimile No.: (303) [            ] 

A-9

 

ASSIGNMENT
FORM 

To
assign this Note, fill in the form below: 

I
or we assign and transfer this Note to 

	

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

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

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

Date:
                                     Your Signature:
                                         
                                   
 

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-10

 
[TO
BE ATTACHED TO GLOBAL NOTES] 

SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL NOTE 

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

	Date of Exchange
 
	 	Amount of decrease in Principal Amount of this Global Note
	 	Amount of increase in Principal Amount of this Global Note
	 	Principal Amount of this Global Note following such decrease or increase
	 	Signature of authorized signatory of Trustee or Notes Custodian

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

A-11

 
OPTION OF HOLDER TO ELECT PURCHASE 

        If
you want to elect to have this Note purchased by the Company pursuant to Section 3.8 or 3.10 of the Indenture,
check the box: 

o 

        If you want to elect to have only part of this Note purchased by the Company pursuant to Section 3.8
or 3.10 of the Indenture, state the amount in principal amount (must be denominations of $2,000 or an integral multiple of $1,000 in excess thereof): $ 

Date:
                                     Your Signature:
                                         
                                   

                                         
   (Sign exactly as your name appears on the other side of the Note) 

Signature
Guarantee:
                                         
                                   

                                         
   (Signature must be guaranteed) 

        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-12

  

 
 

EXHIBIT B    
    

 
 

FORM OF NOTATION OF GUARANTEE    
    

        For value received, each Subsidiary Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of April [            ], 2007
(the "Indenture") among Cimarex Energy Co., the Subsidiary Guarantors listed on the signature pages thereto and [            ], as
trustee (the "Trustee"), (a) the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the principal of,
premium, if any, and interest on the Notes and all other obligations and liabilities of the Company to the Holders or the Trustee under the Indenture (including without limitation interest accruing
after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceedings, relating to the Company or any Subsidiary Guarantor whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding). The obligations of the Subsidiary Guarantors to the Holders and to the Trustee pursuant to the
Subsidiary Guarantee and the Indenture are expressly set forth in Article X of the Indenture and reference is hereby made to the Indenture for the precise terms of
the Subsidiary Guarantee, which terms are incorporated herein by reference. 

	 	 	[Guarantor]
	
 	
 	

By:	

 Name:

Title:

B-1

  

 
 

EXHIBIT C    
    

 
  FORM OF INDENTURE SUPPLEMENT TO ADD SUBSIDIARY GUARANTORS TO GUARANTEE NOTES    
    

        This Supplemental Indenture and Subsidiary Guarantee, dated as of
[                                    ],
20            (this
"Supplemental Indenture" or "Guarantee"), among [name of future Subsidiary
Guarantor] (the "New Subsidiary Guarantor"), Cimarex Energy Co. (together with its successors and assigns, the
"Company"), each other existing Subsidiary Guarantor under the Indenture referred to below (the "Existing Subsidiary Guarantors"), and
[            ], as Trustee under the Indenture referred to below. 

 
 

W I T N E S S E T H:    
    

        WHEREAS,
the Company, the Existing Subsidiary Guarantors and the Trustee have heretofore executed and delivered an Indenture, dated as of April [            ],
2007 (as amended, supplemented, waived or otherwise modified, the "Indenture"), providing for the issuance of an unlimited aggregate principal amount of
[            ]% Senior Notes due 2017 of the Company (the "Notes"); 

        WHEREAS,
Section 3.11 of the Indenture provides that the Company is required to cause each Restricted Subsidiary (other than a Foreign Subsidiary)
created or acquired by the Company or one or more of its Restricted Subsidiaries that Guarantees the payment of any Indebtedness of the Company under the Senior Secured Credit Agreement to execute and
deliver to the Trustee a Supplemental Indenture and Subsidiary Guarantee pursuant to which such Subsidiary Guarantor shall unconditionally Guarantee, on a joint and several basis, the full and prompt
payment of the principal of, premium, if
any and interest on the Notes on a senior unsecured basis and all other obligations under the Indenture on an unsecured basis; and 

        WHEREAS,
pursuant to Section 9.1 of the Indenture, the Trustee, the Company and the Existing Subsidiary Guarantors are authorized to execute and
deliver this Supplemental Indenture to amend the Indenture to provide for the Subsidiary Guarantee by the New Subsidiary Guarantor, without the consent of any Holder; 

        NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Subsidiary Guarantor, the
Existing Subsidiary Guarantors, the Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows: 

ARTICLE
I 

Definitions
SECTION 1.1 Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein
as therein defined, except that the term "Holders" in this Guarantee shall refer to the term "Holders" as defined in the Indenture and the Trustee acting on behalf or for
the benefit of such Holders. The words "herein," "hereof" and "hereby" and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to
any particular section hereof. 

ARTICLE
II 

Agreement
to be Bound; Guarantee SECTION 2.1 Agreement to be Bound. The New Subsidiary Guarantor hereby becomes a party to the Indenture as a Subsidiary
Guarantor and as such shall have all of the rights and be subject to all of the obligations and agreements of a Subsidiary Guarantor under the Indenture. The New Subsidiary Guarantor agrees to
be bound by all of the provisions of the Indenture applicable to a Subsidiary Guarantor and to perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture. 

C-1

 

        SECTION 2.2
Guarantee. The New Subsidiary Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary obligor and not merely
as a surety, jointly and severally with each other Subsidiary Guarantor, to each Holder and the Trustee, the full and punctual payment when due, whether at maturity, by acceleration, by redemption or
otherwise, of the Obligations pursuant to Article X of the Indenture. 

ARTICLE
III 

Miscellaneous
SECTION 3.1 Notices. All notices and other communications to the New Subsidiary Guarantor shall be given as provided in the Indenture to the
New Subsidiary Guarantor, at its address set forth below, with a copy to the Company as provided in the Indenture for notices to the Company. 

        [Name of future Subsidiary Guarantor] 

        [            ] 

        [            ] 

        [Attention:]

        [Facsimile
No.: (            ) —] 

        SECTION 3.2
Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the
Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained. 

        SECTION 3.3
Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of
New York. 

        SECTION 3.4
Severability Clause. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality
or unenforceability. 

        SECTION 3.5
Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every Holder heretofore or hereafter authenticated and
delivered shall be bound hereby. The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture. 

        SECTION 3.6
Counterparts. The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts, all of which together shall
constitute one and the same agreement. 

        SECTION 3.7
Headings. The headings of the Articles and the sections in this Guarantee are for convenience of reference only and shall not be deemed to
alter or affect the meaning or interpretation of any provisions hereof. 

C-2

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. 

	 	 	[NEW SUBSIDIARY GUARANTOR],

as a Subsidiary Guarantor
	
 	
 	

By:	

 Name:

Title:
	
 	
 	

[            ], as Trustee
	
 	
 	

By:	

 Name:

Title:
	
 	
 	

CIMAREX ENERGY CO.
	
 	
 	

By:	

 Name:

Title:
	
 	
 	

[EXISTING SUBSIDIARY GUARANTORS],
	
 	
 	

By:	

 Name:

Title:

C-3

QuickLinks

EXHIBIT 4.4

CROSS-REFERENCE TABLE

TABLE OF CONTENTS

EXHIBITS

ARTICLE I Definitions and Incorporation by Reference

ARTICLE II The Notes

ARTICLE III Covenants

ARTICLE IV Successor Company and Successor Subsidiary Guarantor

ARTICLE V Redemption of Notes

ARTICLE VI Defaults and Remedies

ARTICLE VII Trustee

ARTICLE VIII Discharge of Indenture; Defeasance

ARTICLE IX Amendments

ARTICLE X Subsidiary Guarantees

ARTICLE XI Miscellaneous

EXHIBIT A

[FORM OF FACE OF GLOBAL NOTE] [Depositary Legend, if applicable]

[FORM OF REVERSE SIDE OF GLOBAL NOTE] [ ]% Senior Note due 2017

EXHIBIT B

FORM OF NOTATION OF GUARANTEE

EXHIBIT C

FORM OF INDENTURE SUPPLEMENT TO ADD SUBSIDIARY GUARANTORS TO GUARANTEE NOTES

W I T N E S S E T HTHE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933

 

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
    BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
    THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
    EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN
    OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF
    COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT REQUIRED UNDER
    SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT.

    

  

CALLABLE SECURED CONVERTIBLE NOTE

Oxford, Mississippi

April 10, 2007 $132,000

FOR VALUE RECEIVED, MODERN TECHNOLOGY CORP., a
Nevada corporation (hereinafter called the "Borrower"), hereby promises
to pay to the order of AJW OFFSHORE, LTD or registered assigns (the "Holder")
the sum of $132,000, on April 10, 2010 (the "Maturity Date"), and to pay
interest on the unpaid principal balance hereof at the rate of six percent (8%)
per annum from April 10, 2007 (the "Issue Date") until the same becomes
due and payable, whether at maturity or upon acceleration or by prepayment or
otherwise. Any amount of principal or interest on this Note which is not paid
when due shall bear interest at the rate of fifteen percent (15%) per annum from
the due date thereof until the same is paid ("Default Interest").
Interest shall commence accruing on the Issue Date, shall be computed on the
basis of a 365-day year and the actual number of days elapsed and shall be
payable quarterly provided that no interest shall be due and payable for any
month in which the Trading Price (as such term is defined below) is greater than
$.075 for each Trading Day (as such term is defined below) of the month. All
payments due hereunder (to the extent not converted into common stock, $.0001
par value per share (the "Common Stock") in accordance with the terms
hereof) shall be made in lawful money of the United States of America and shall
commence on June 30, 2006. All payments shall be made at such address as the
Holder shall hereafter give to the Borrower by written notice made in accordance
with the provisions of this Note. Whenever any amount expressed to be due by the
terms of this Note is due on any day which is not a business day, the same shall
instead be due on the next succeeding day which is a business day and, in the
case of any interest payment date which is not the date on which this Note is
paid in full, the extension of the due date thereof shall not be taken into
account for purposes of determining the amount of interest due on such date. As
used in this Note, the term "business day" shall mean any day other than a
Saturday, Sunday or a day on which commercial banks in the city of New York, New
York are authorized or required by law or executive order to remain closed. Each
capitalized term used herein, and not otherwise defined, shall have the meaning
ascribed thereto in that certain Securities Purchase Agreement, dated April 10,
2007, pursuant to which this Note was originally issued (the "Purchase
Agreement"). 

This Note is free from all taxes, liens, claims and
encumbrances with respect to the issue thereof and shall not be subject to
preemptive rights or other similar rights of shareholders of the Borrower and
will not impose personal liability upon the holder thereof. The obligations of
the Borrower under this Note shall be secured by that certain Security Agreement
and that certain Intellectual Property Security Agreement, each dated April 10,
2007, by and between the Borrower and the Holder.

The following terms shall apply to this Note:

Article I. CONVERSION RIGHTS

1.1 Conversion Right. The Holder shall have
the right from time to time, and at any time on or prior to the earlier of (i)
the Maturity Date and (ii) the date of payment of the Default Amount (as defined
in Article III) pursuant to Section 1.6(a) or Article III, the Optional
Prepayment Amount (as defined in Section 5.1 or any payments pursuant to Section
1.7, each in respect of the remaining outstanding principal amount of this Note
to convert all or any part of the outstanding and unpaid principal amount of
this Note into fully paid and non-assessable shares of Common Stock, as such
Common Stock exists on the Issue Date, or any shares of capital stock or other
securities of the Borrower into which such Common Stock shall hereafter be
changed or reclassified at the conversion price (the "Conversion Price")
determined as provided herein (a "Conversion"); provided, 
however, that in no event shall the Holder be entitled to convert any
portion of this Note in excess of that portion of this Note upon conversion of
which the sum of (1) the number of shares of Common Stock beneficially owned by
the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unconverted portion of
the Notes or the unexercised or unconverted portion of any other security of the
Borrower (including, without limitation, the Preferred Shares and Warrants
issued by the Borrower pursuant to the Purchase Agreement) subject to a
limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the
conversion of the portion of this Note with respect to which the determination
of this proviso is being made, would result in beneficial ownership by the
Holder and its affiliates of more than 4.9% of the outstanding shares of Common
Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
except as otherwise provided in clause (1) of such proviso. The number of shares
of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing the Conversion Amount (as defined below) by the
applicable Conversion Price then in effect on the date specified in the notice
of conversion, in the form attached hereto as Exhibit A (the "Notice of
Conversion"), delivered to the Borrower by the Holder in accordance with
Section 1.4 below; provided that the Notice of Conversion is submitted by
facsimile (or by other means resulting in, or reasonably expected to result in,
notice) to the Borrower before 6:00 p.m., New York, New York time on such
conversion date (the "Conversion Date"). The term "Conversion Amount"
means, with respect to any conversion of this Note, the sum of (1) the principal
amount of this Note to be converted in such conversion plus (2) accrued
and unpaid interest, if any, on such principal amount at the interest rates
provided in this Note to the Conversion Date plus (3) Default Interest,
if any, on the amounts referred to in the immediately preceding clauses (1)
and/or (2) plus (4) at the Holder's option, any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
that certain Registration Rights Agreement, dated as of April 10, 2007, executed
in connection with the initial issuance of this Note and the other Notes issued
on the Issue Date (the "Registration Rights Agreement").

1.2 Conversion Price.

(a) Calculation of Conversion Price. The
Conversion Price shall be the lesser of (i) the Variable Conversion Price (as
defined herein) and (ii) the Fixed Conversion Price (as defined herein)
(subject, in each case, to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the Borrower's
securities or the securities of any subsidiary of the Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions and similar
events). The "Variable Conversion Price" shall mean the Applicable
Percentage (as defined herein) multiplied by the Market Price (as defined
herein). "Market Price" means the average of the lowest three (3) Trading
Prices (as defined below) for the Common Stock during the twenty (20) Trading
Day period ending one Trading Day prior to the date the Conversion Notice is
sent by the Holder to the Borrower via facsimile (the "Conversion Date").
"Trading Price" means, for any security as of any date, the intraday
trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as
reported by a reliable reporting service mutually acceptable to and hereafter
designated by Holders of a majority in interest of the Debentures and the
Borrower or, if the OTCBB is not the principal trading market for such security,
the intraday trading price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no intraday
trading price of such security is available in any of the foregoing manners, the
average of the intraday trading prices of any market makers for such security
that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If
the Trading Price cannot be calculated for such security on such date in the
manner provided above, the Trading Price shall be the fair market value as
mutually determined by the Borrower and the holders of a majority in interest of
the Debentures being converted for which the calculation of the Trading Price is
required in order to determine the Conversion Price of such Debentures. "Trading
Day" shall mean any day on which the Common Stock is traded for any period
on the OTCBB, or on the principal securities exchange or other securities market
on which the Common Stock is then being traded. "Applicable Percentage"
shall mean 50%. The "Fixed Conversion Price" shall mean $.06.

(b) Conversion Price During Major Announcements.
Notwithstanding anything contained in Section 1.2(a) to the contrary, in the
event the Borrower (i) makes a public announcement that it intends to
consolidate or merge with any other corporation (other than a merger in which
the Borrower is the surviving or continuing corporation and its capital stock is
unchanged) or sell or transfer all or substantially all of the assets of the
Borrower or (ii) any person, group or entity (including the Borrower) publicly
announces a tender offer to purchase 50% or more of the Borrower's Common Stock
(or any other takeover scheme) (the date of the announcement referred to in
clause (i) or (ii) is hereinafter referred to as the "Announcement Date"),
then the Conversion Price shall, effective upon the Announcement Date and
continuing through the Adjusted Conversion Price Termination Date (as defined
below), be equal to the lower of (x) the Conversion Price which would have been
applicable for a Conversion occurring on the Announcement Date and (y) the
Conversion Price that would otherwise be in effect. From and after the Adjusted
Conversion Price Termination Date, the Conversion Price shall be determined as
set forth in this Section 1.2(a). For purposes hereof, "Adjusted Conversion
Price Termination Date" shall mean, with respect to any proposed transaction
or tender offer (or takeover scheme) for which a public announcement as
contemplated by this Section 1.2(b) has been made, the date upon which the
Borrower (in the case of clause (i) above) or the person, group or entity (in
the case of clause (ii) above) consummates or publicly announces the termination
or abandonment of the proposed transaction or tender offer (or takeover scheme)
which caused this Section 1.2(b) to become operative.

1.3 Authorized Shares. The Borrower
covenants that during the period the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note and the other Notes issued pursuant to the
Purchase Agreement. The Borrower is required at all times to have authorized and
reserved two times the number of shares that is actually issuable upon full
conversion of the Notes (based on the Conversion Price of the Notes and
Preferred Shares or the Exercise Price of the Warrants in effect from time to
time) (the "Reserved Amount"). The Reserved Amount shall be increased
from time to time in accordance with the Borrower's obligations pursuant to
Section 4(h) of the Purchase Agreement. The Borrower represents that upon
issuance, such shares will be duly and validly issued, fully paid and
non-assessable. In addition, if the Borrower shall issue any securities or make
any change to its capital structure which would change the number of shares of
Common Stock into which the Notes shall be convertible at the then current
Conversion Price, the Borrower shall at the same time make proper provision so
that thereafter there shall be a sufficient number of shares of Common Stock
authorized and reserved, free from preemptive rights, for conversion of the
outstanding Notes. The Borrower (i) acknowledges that it has irrevocably
instructed its transfer agent to issue certificates for the Common Stock
issuable upon conversion of this Note, and (ii) agrees that its issuance of this
Note shall constitute full authority to its officers and agents who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock in accordance with the terms and
conditions of this Note.

If, at any time a Holder of this Note submits a Notice of
Conversion, and the Borrower does not have sufficient authorized but unissued
shares of Common Stock available to effect such conversion in accordance with
the provisions of this Article I (a "Conversion Default"), subject to
Section 4.8, the Borrower shall issue to the Holder all of the shares of Common
Stock which are then available to effect such conversion. The portion of this
Note which the Holder included in its Conversion Notice and which exceeds the
amount which is then convertible into available shares of Common Stock (the "Excess
Amount") shall, notwithstanding anything to the contrary contained herein,
not be convertible into Common Stock in accordance with the terms hereof until
(and at the Holder's option at any time after) the date additional shares of
Common Stock are authorized by the Borrower to permit such conversion, at which
time the Conversion Price in respect thereof shall be the lesser of (i) the
Conversion Price on the Conversion Default Date (as defined below) and (ii) the
Conversion Price on the Conversion Date thereafter elected by the Holder in
respect thereof. In addition, the Borrower shall pay to the Holder payments ("Conversion
Default Payments") for a Conversion Default in the amount of (x) the sum
of (1) the then outstanding principal amount of this Note plus (2)
accrued and unpaid interest on the unpaid principal amount of this Note through
the Authorization Date (as defined below) plus (3) Default Interest, if
any, on the amounts referred to in clauses (1) and/or (2), multiplied by
(y) .24, multiplied by (z) (N/365), where N = the number of days from the
day the holder submits a Notice of Conversion giving rise to a Conversion
Default (the "Conversion Default Date") to the date (the "Authorization
Date") that the Borrower authorizes a sufficient number of shares of Common
Stock to effect conversion of the full outstanding principal balance of this
Note. The Borrower shall use its best efforts to authorize a sufficient number
of shares of Common Stock as soon as practicable following the earlier of (i)
such time that the Holder notifies the Borrower or that the Borrower otherwise
becomes aware that there are or likely will be insufficient authorized and
unissued shares to allow full conversion thereof and (ii) a Conversion Default.
The Borrower shall send notice to the Holder of the authorization of additional
shares of Common Stock, the Authorization Date and the amount of Holder's
accrued Conversion Default Payments. The accrued Conversion Default Payments for
each calendar month shall be paid in cash or shall be convertible into Common
Stock (at such time as there are sufficient authorized shares of Common Stock)
at the applicable Conversion Price, at the Borrower's option, as follows:

(a) In the event Holder elects to take such
payment in cash, cash payment shall be made to Holder by the fifth (5th)
day of the month following the month in which it has accrued; and

(b) In the event Holder elects to take such
payment in Common Stock, the Holder may convert such payment amount into Common
Stock at the Conversion Price (as in effect at the time of conversion) at any
time after the fifth day of the month following the month in which it has
accrued in accordance with the terms of this Article I (so long as there is then
a sufficient number of authorized shares of Common Stock).

The Holder's election shall be made in writing to the
Borrower at any time prior to 6:00 p.m., New York, New York time, on the third
day of the month following the month in which Conversion Default payments have
accrued. If no election is made, the Holder shall be deemed to have elected to
receive cash. Nothing herein shall limit the Holder's right to pursue actual
damages (to the extent in excess of the Conversion Default Payments) for the
Borrower's failure to maintain a sufficient number of authorized shares of
Common Stock, and each holder shall have the right to pursue all remedies
available at law or in equity (including degree of specific performance and/or
injunctive relief).

1.4 Method of Conversion.

(a) Mechanics of Conversion. Subject to
Section 1.1, this Note may be converted by the Holder in whole or in part at any
time from time to time after the Issue Date, by (A) submitting to the Borrower a
Notice of Conversion (by facsimile or other reasonable means of communication
dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time)
and (B) subject to Section 1.4(b), surrendering this Note at the principal
office of the Borrower. 

(b) Surrender of Note Upon Conversion. 
Notwithstanding anything to the contrary set forth herein, upon conversion of
this Note in accordance with the terms hereof, the Holder shall not be required
to physically surrender this Note to the Borrower unless the entire unpaid
principal amount of this Note is so converted. The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this Note
upon each such conversion. In the event of any dispute or discrepancy, such
records of the Borrower shall be controlling and determinative in the absence of
manifest error. Notwithstanding the foregoing, if any portion of this Note is
converted as aforesaid, the Holder may not transfer this Note unless the Holder
first physically surrenders this Note to the Borrower, whereupon the Borrower
will forthwith issue and deliver upon the order of the Holder a new Note of like
tenor, registered as the Holder (upon payment by the Holder of any applicable
transfer taxes) may request, representing in the aggregate the remaining unpaid
principal amount of this Note. The Holder and any assignee, by acceptance of
this Note, acknowledge and agree that, by reason of the provisions of this
paragraph, following conversion of a portion of this Note, the unpaid and
unconverted principal amount of this Note represented by this Note may be less
than the amount stated on the face hereof.

(c) Payment of Taxes. The Borrower shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock or other securities
or property on conversion of this Note in a name other than that of the Holder
(or in street name), and the Borrower shall not be required to issue or deliver
any such shares or other securities or property unless and until the person or
persons (other than the Holder or the custodian in whose street name such shares
are to be held for the Holder's account) requesting the issuance thereof shall
have paid to the Borrower the amount of any such tax or shall have established
to the satisfaction of the Borrower that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion.
Upon receipt by the Borrower from the Holder of a facsimile transmission (or
other reasonable means of communication) of a Notice of Conversion meeting the
requirements for conversion as provided in this Section 1.4, the Borrower shall
issue and deliver or cause to be issued and delivered to or upon the order of
the Holder certificates for the Common Stock issuable upon such conversion
within two (2) business days after such receipt (and, solely in the case of
conversion of the entire unpaid principal amount hereof, surrender of this Note)
(such second business day being hereinafter referred to as the "Deadline")
in accordance with the terms hereof and the Purchase Agreement (including,
without limitation, in accordance with the requirements of Section 2(g) of the
Purchase Agreement that certificates for shares of Common Stock issued on or
after the effective date of the Registration Statement upon conversion of this
Note shall not bear any restrictive legend).

(e) Obligation of Borrower to Deliver Common Stock.
Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be
deemed to be the holder of record of the Common Stock issuable upon such
conversion, the outstanding principal amount and the amount of accrued and
unpaid interest on this Note shall be reduced to reflect such conversion, and,
unless the Borrower defaults on its obligations under this Article I, all rights
with respect to the portion of this Note being so converted shall forthwith
terminate except the right to receive the Common Stock or other securities, cash
or other assets, as herein provided, on such conversion. If the Holder shall
have given a Notice of Conversion as provided herein, the Borrower's obligation
to issue and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of the Borrower to the Holder in
connection with such conversion. The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as the Notice of Conversion is
received by the Borrower before 6:00 p.m., New York, New York time, on such
date.

(f) Delivery of Common Stock by Electronic Transfer.
In lieu of delivering physical certificates representing the Common Stock
issuable upon conversion, provided the Borrower's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer ("FAST") program, upon request of the Holder and its
compliance with the provisions contained in Section 1.1 and in this Section 1.4,
the Borrower shall use its best efforts to cause its transfer agent to
electronically transmit the Common Stock issuable upon conversion to the Holder
by crediting the account of Holder's Prime Broker with DTC through its Deposit
Withdrawal Agent Commission ("DWAC") system.

(g) Failure to Deliver Common Stock Prior to
Deadline. Without in any way limiting the Holder's right to pursue other
remedies, including actual damages and/or equitable relief, the parties agree
that if delivery of the Common Stock issuable upon conversion of this Note is
more than two (2) days after the Deadline (other than a failure due to the
circumstances described in Section 1.3 above, which failure shall be governed by
such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for
each day beyond the Deadline that the Borrower fails to deliver such Common
Stock. Such cash amount shall be paid to Holder by the fifth day of the month
following the month in which it has accrued or, at the option of the Holder (by
written notice to the Borrower by the first day of the month following the month
in which it has accrued), shall be added to the principal amount of this Note,
in which event interest shall accrue thereon in accordance with the terms of
this Note and such additional principal amount shall be convertible into Common
Stock in accordance with the terms of this Note.

1.5 Concerning the Shares. The shares of
Common Stock issuable upon conversion of this Note may not be sold or
transferred unless (i) such shares are sold pursuant to an effective
registration statement under the Act or (ii) the Borrower or its transfer agent
shall have been furnished with an opinion of counsel (which opinion shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the shares to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration or
(iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or
a successor rule) ("Rule 144") or (iv) such shares are transferred to an
"affiliate" (as defined in Rule 144) of the Borrower who agrees to sell or
otherwise transfer the shares only in accordance with this Section 1.5 and who
is an Accredited Investor (as defined in the Purchase Agreement). Except as
otherwise provided in the Purchase Agreement (and subject to the removal
provisions set forth below), until such time as the shares of Common Stock
issuable upon conversion of this Note have been registered under the Act as
contemplated by the Registration Rights Agreement or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as
of a particular date that can then be immediately sold, each certificate for
shares of Common Stock issuable upon conversion of this Note that has not been
so included in an effective registration statement or that has not been sold
pursuant to an effective registration statement or an exemption that permits
removal of the legend, shall bear a legend substantially in the following form,
as appropriate:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
    BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
    MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
    REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF
    COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN
    COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
    UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT."

  

The legend set forth above shall be removed and the Borrower
shall issue to the Holder a new certificate therefor free of any transfer legend
if (i) the Borrower or its transfer agent shall have received an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Common Stock may be made without registration under the Act and the shares are
so sold or transferred, (ii) such Holder provides the Borrower or its transfer
agent with reasonable assurances that the Common Stock issuable upon conversion
of this Note (to the extent such securities are deemed to have been acquired on
the same date) can be sold pursuant to Rule 144 or (iii) in the case of the
Common Stock issuable upon conversion of this Note, such security is registered
for sale by the Holder under an effective registration statement filed under the
Act or otherwise may be sold pursuant to Rule 144 without any restriction as to
the number of securities as of a particular date that can then be immediately
sold. Nothing in this Note shall (i) limit the Borrower's obligation under the
Registration Rights Agreement or (ii) affect in any way the Holder's obligations
to comply with applicable prospectus delivery requirements upon the resale of
the securities referred to herein.

1.6 Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc.
At the option of the Holder, the sale, conveyance or disposition of all or
substantially all of the assets of the Borrower, the effectuation by the
Borrower of a transaction or series of related transactions in which more than
50% of the voting power of the Borrower is disposed of, or the consolidation,
merger or other business combination of the Borrower with or into any other
Person (as defined below) or Persons when the Borrower is not the survivor shall
either: (i) be deemed to be an Event of Default (as defined in Article III)
pursuant to which the Borrower shall be required to pay to the Holder upon the
consummation of and as a condition to such transaction an amount equal to the
Default Amount (as defined in Article III) or (ii) be treated pursuant to
Section 1.6(b) hereof. "Person" shall mean any individual, corporation,
limited liability company, partnership, association, trust or other entity or
organization.

(b) Adjustment Due to Merger, Consolidation, Etc.
If, at any time when this Note is issued and outstanding and prior to
conversion of all of the Notes, there shall be any merger, consolidation,
exchange of shares, recapitalization, reorganization, or other similar event, as
a result of which shares of Common Stock of the Borrower shall be changed into
the same or a different number of shares of another class or classes of stock or
securities of the Borrower or another entity, or in case of any sale or
conveyance of all or substantially all of the assets of the Borrower other than
in connection with a plan of complete liquidation of the Borrower, then the
Holder of this Note shall thereafter have the right to receive upon conversion
of this Note, upon the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock immediately theretofore issuable upon
conversion, such stock, securities or assets which the Holder would have been
entitled to receive in such transaction had this Note been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of the Holder of this Note to
the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Note) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Borrower shall not effect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of
shareholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the
Holder shall be entitled to convert this Note) and (b) the resulting successor
or acquiring entity (if not the Borrower) assumes by written instrument the
obligations of this Section 1.6(b). The above provisions shall similarly apply
to successive consolidations, mergers, sales, transfers or share exchanges.

(c) Adjustment Due to Distribution. If the
Borrower shall declare or make any distribution of its assets (or rights to
acquire its assets) to holders of Common Stock as a dividend, stock repurchase,
by way of return of capital or otherwise (including any dividend or distribution
to the Borrower's shareholders in cash or shares (or rights to acquire shares)
of capital stock of a subsidiary (i.e., a spin-off)) (a "Distribution"),
then the Holder of this Note shall be entitled, upon any conversion of this Note
after the date of record for determining shareholders entitled to such
Distribution, to receive the amount of such assets which would have been payable
to the Holder with respect to the shares of Common Stock issuable upon such
conversion had such Holder been the holder of such shares of Common Stock on the
record date for the determination of shareholders entitled to such Distribution.

(d) Adjustment Due to Dilutive Issuance.
If, at any time when any Notes are issued and outstanding, the Borrower issues
or sells, or in accordance with this Section 1.6(d) hereof is deemed to have
issued or sold, any shares of Common Stock for no consideration or for a
consideration per share (before deduction of reasonable expenses or commissions
or underwriting discounts or allowances in connection therewith) less than the
Fixed Conversion Price in effect on the date of such issuance (or deemed
issuance) of such shares of Common Stock (a "Dilutive Issuance"), then
immediately upon the Dilutive Issuance, the Fixed Conversion Price will be
reduced to the amount of the consideration per share received by the Borrower in
such Dilutive Issuance; provided that only one adjustment will be made
for each Dilutive Issuance.

The Borrower shall be deemed to have issued or sold shares of
Common Stock if the Borrower in any manner issues or grants any warrants, rights
or options, whether or not immediately exercisable, to subscribe for or to
purchase Common Stock or other securities convertible into or exchangeable for
Common Stock ("Convertible Securities") (such warrants, rights and
options to purchase Common Stock or Convertible Securities are hereinafter
referred to as "Options") and the price per share for which Common Stock
is issuable upon the exercise of such Options is less than the Fixed Conversion
Price then in effect, then the Fixed Conversion Price shall be equal to such
price per share. For purposes of the preceding sentence, the "price per share
for which Common Stock is issuable upon the exercise of such Options" is
determined by dividing (i) the total amount, if any, received or receivable by
the Borrower as consideration for the issuance or granting of all such Options,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Borrower upon the exercise of all such Options, plus, in the case of
Convertible Securities issuable upon the exercise of such Options, the minimum
aggregate amount of additional consideration payable upon the conversion or
exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Conversion Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or
sold shares of Common Stock if the Borrower in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options), and the price per share for
which Common Stock is issuable upon such conversion or exchange is less than the
Fixed Conversion Price then in effect, then the Fixed Conversion Price shall be
equal to such price per share. For the purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon such conversion or
exchange" is determined by dividing (i) the total amount, if any, received or
receivable by the Borrower as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment to the Fixed Conversion Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

(e) Purchase Rights. If, at any time when
any Notes are issued and outstanding, the Borrower issues any convertible
securities or rights to purchase stock, warrants, securities or other property
(the "Purchase Rights") pro rata to the record holders of any class of
Common Stock, then the Holder of this Note will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which
such Holder could have acquired if such Holder had held the number of shares of
Common Stock acquirable upon complete conversion of this Note (without regard to
any limitations on conversion contained herein) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights
or, if no such record is taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.

(f) Notice of Adjustments. Upon the
occurrence of each adjustment or readjustment of the Conversion Price as a
result of the events described in this Section 1.6, the Borrower, at its
expense, shall promptly compute such adjustment or readjustment and prepare and
furnish to the Holder of a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Borrower shall, upon the written request at any time
of the Holder, furnish to such Holder a like certificate setting forth (i) such
adjustment or readjustment, (ii) the Conversion Price at the time in effect and
(iii) the number of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon conversion of
the Note.

1.7 Trading Market Limitations. Unless
permitted by the applicable rules and regulations of the principal securities
market on which the Common Stock is then listed or traded, in no event shall the
Borrower issue upon conversion of or otherwise pursuant to this Note and the
other Notes issued pursuant to the Purchase Agreement more than the maximum
number of shares of Common Stock that the Borrower can issue pursuant to any
rule of the principal United States securities market on which the Common Stock
is then traded (the "Maximum Share Amount"), which shall be 19.99% of the
total shares of Common Stock outstanding on the Closing Date (as defined in the
Purchase Agreement), subject to equitable adjustment from time to time for stock
splits, stock dividends, combinations, capital reorganizations and similar
events relating to the Common Stock occurring after the date hereof. Once the
Maximum Share Amount has been issued (the date of which is hereinafter referred
to as the "Maximum Conversion Date"), if the Borrower fails to eliminate
any prohibitions under applicable law or the rules or regulations of any stock
exchange, interdealer quotation system or other self-regulatory organization
with jurisdiction over the Borrower or any of its securities on the Borrower's
ability to issue shares of Common Stock in excess of the Maximum Share Amount (a
"Trading Market Prepayment Event"), in lieu of any further right to
convert this Note, and in full satisfaction of the Borrower's obligations under
this Note, the Borrower shall pay to the Holder, within fifteen (15) business
days of the Maximum Conversion Date (the "Trading Market Prepayment Date"),
an amount equal to 130% times the sum of (a) the then outstanding
principal amount of this Note immediately following the Maximum Conversion Date,
plus (b) accrued and unpaid interest on the unpaid principal amount of
this Note to the Trading Market Prepayment Date, plus (c) Default
Interest, if any, on the amounts referred to in clause (a) and/or (b) above, 
plus (d) any optional amounts that may be added thereto at the Maximum
Conversion Date by the Holder in accordance with the terms hereof (the then
outstanding principal amount of this Note immediately following the Maximum
Conversion Date, plus the amounts referred to in clauses (b), (c) and (d)
above shall collectively be referred to as the "Remaining Convertible Amount").
With respect to each Holder of Notes, the Maximum Share Amount shall refer to
such Holder's pro rata share thereof determined in accordance with
Section 4.8 below. In the event that the sum of (x) the aggregate number of
shares of Common Stock issued upon conversion of this Note and the other Notes
issued pursuant to the Purchase Agreement plus (y) the aggregate number
of shares of Common Stock that remain issuable upon conversion of this Note and
the other Notes issued pursuant to the Purchase Agreement, represents at least
one hundred percent (100%) of the Maximum Share Amount (the "Triggering Event"),
the Borrower will use its best efforts to seek and obtain Shareholder Approval
(or obtain such other relief as will allow conversions hereunder in excess of
the Maximum Share Amount) as soon as practicable following the Triggering Event
and before the Maximum Conversion Date. As used herein, "Shareholder Approval"
means approval by the shareholders of the Borrower to authorize the issuance of
the full number of shares of Common Stock which would be issuable upon full
conversion of the then outstanding Notes but for the Maximum Share Amount.

1.8 Status as Shareholder. Upon submission
of a Notice of Conversion by a Holder, (i) the shares covered thereby (other
than the shares, if any, which cannot be issued because their issuance would
exceed such Holder's allocated portion of the Reserved Amount or Maximum Share
Amount) shall be deemed converted into shares of Common Stock and (ii) the
Holder's rights as a Holder of such converted portion of this Note shall cease
and terminate, excepting only the right to receive certificates for such shares
of Common Stock and to any remedies provided herein or otherwise available at
law or in equity to such Holder because of a failure by the Borrower to comply
with the terms of this Note. Notwithstanding the foregoing, if a Holder has not
received certificates for all shares of Common Stock prior to the tenth (10th)
business day after the expiration of the Deadline with respect to a conversion
of any portion of this Note for any reason, then (unless the Holder otherwise
elects to retain its status as a holder of Common Stock by so notifying the
Borrower) the Holder shall regain the rights of a Holder of this Note with
respect to such unconverted portions of this Note and the Borrower shall, as
soon as practicable, return such unconverted Note to the Holder or, if the Note
has not been surrendered, adjust its records to reflect that such portion of
this Note has not been converted. In all cases, the Holder shall retain all of
its rights and remedies (including, without limitation, (i) the right to receive
Conversion Default Payments pursuant to Section 1.3 to the extent required
thereby for such Conversion Default and any subsequent Conversion Default and
(ii) the right to have the Conversion Price with respect to subsequent
conversions determined in accordance with Section 1.3) for the Borrower's
failure to convert this Note.

Article II. CERTAIN COVENANTS

2.1 Distributions on Capital Stock. So long
as the Borrower shall have any obligation under this Note, the Borrower shall
not without the Holder's written consent (a) pay, declare or set apart for such
payment, any dividend or other distribution (whether in cash, property or other
securities) on shares of capital stock other than dividends on shares of Common
Stock solely in the form of additional shares of Common Stock or (b) directly or
indirectly or through any subsidiary make any other payment or distribution in
respect of its capital stock except for distributions pursuant to any
shareholders' rights plan which is approved by a majority of the Borrower's
disinterested directors.

2.2 Restriction on Stock Repurchases. So
long as the Borrower shall have any obligation under this Note, the Borrower
shall not without the Holder's written consent redeem, repurchase or otherwise
acquire (whether for cash or in exchange for property or other securities or
otherwise) in any one transaction or series of related transactions any shares
of capital stock of the Borrower or any warrants, rights or options to purchase
or acquire any such shares.

2.3 Borrowings. So long as the Borrower
shall have any obligation under this Note, the Borrower shall not, without the
Holder's written consent, create, incur, assume or suffer to exist any liability
for borrowed money, except (a) borrowings in existence or committed on the date
hereof and of which the Borrower has informed Holder in writing prior to the
date hereof, (b) indebtedness to trade creditors or financial institutions
incurred in the ordinary course of business or (c) borrowings, the proceeds of
which shall be used to repay this Note.

2.4 Sale of Assets. So long as the Borrower
shall have any obligation under this Note, the Borrower shall not, without the
Holder's written consent, sell, lease or otherwise dispose of any significant
portion of its assets outside the ordinary course of business. Any consent to
the disposition of any assets may be conditioned on a specified use of the
proceeds of disposition.

2.5 Advances and Loans. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder's written consent, lend money, give credit or make advances
to any person, firm, joint venture or corporation, including, without
limitation, officers, directors, employees, subsidiaries and affiliates of the
Borrower, except loans, credits or advances (a) in existence or committed on the
date hereof and which the Borrower has informed Holder in writing prior to the
date hereof, (b) made in the ordinary course of business or (c) not in excess of
$50,000.

2.6 Contingent Liabilities. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder's written consent, assume, guarantee, endorse, contingently
agree to purchase or otherwise become liable upon the obligation of any person,
firm, partnership, joint venture or corporation, except by the endorsement of
negotiable instruments for deposit or collection and except assumptions,
guarantees, endorsements and contingencies (a) in existence or committed on the
date hereof and which the Borrower has informed Holder in writing prior to the
date hereof, and (b) similar transactions in the ordinary course of business.

Article III. EVENTS OF DEFAULT

If any of the following events of default (each, an "Event
of Default") shall occur:

3.1 Failure to Pay Principal or Interest.
The Borrower fails to pay the principal hereof or interest thereon when due on
this Note, whether at maturity, upon a Trading Market Prepayment Event pursuant
to Section 1.7, upon acceleration or otherwise;

3.2 Conversion and the Shares. The Borrower
fails to issue shares of Common Stock to the Holder (or announces or threatens
that it will not honor its obligation to do so) upon exercise by the Holder of
the conversion rights of the Holder in accordance with the terms of this Note
(for a period of at least sixty (60) days, if such failure is solely as a result
of the circumstances governed by Section 1.3 and the Borrower is using its best
efforts to authorize a sufficient number of shares of Common Stock as soon as
practicable), fails to transfer or cause its transfer agent to transfer
(electronically or in certificated form) any certificate for shares of Common
Stock issued to the Holder upon conversion of or otherwise pursuant to this Note
as and when required by this Note or the Registration Rights Agreement, or fails
to remove any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any shares of Common Stock issued to
the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note or the Registration Rights Agreement (or makes any
announcement, statement or threat that it does not intend to honor the
obligations described in this paragraph) and any such failure shall continue
uncured (or any announcement, statement or threat not to honor its obligations
shall not be rescinded in writing) for ten (10) days after the Borrower shall
have been notified thereof in writing by the Holder;

3.3 Failure to Timely File Registration or Effect
Registration. The Borrower fails to file the Registration Statement
within sixty (60) days following the Closing Date (as defined in the Purchase
Agreement) or obtain effectiveness with the Securities and Exchange Commission
of the Registration Statement within one hundred fifteen (115) days following
the Closing Date (as defined in the Purchase Agreement) or such Registration
Statement lapses in effect (or sales cannot otherwise be made thereunder
effective, whether by reason of the Borrower's failure to amend or supplement
the prospectus included therein in accordance with the Registration Rights
Agreement or otherwise) for more than twenty (20) consecutive days or forty (40)
days in any twelve month period after the Registration Statement becomes
effective;

3.4 Breach of Covenants. The Borrower
breaches any material covenant or other material term or condition contained in
Sections 1.3, 1.6 or 1.7 of this Note, or Sections 4(c), 4(e), 4(h), 4(i), 4(j)
or 5 of the Purchase Agreement and such breach continues for a period of ten
(10) days after written notice thereof to the Borrower from the Holder;

3.5 Breach of Representations and Warranties.
Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
herewith (including, without limitation, the Purchase Agreement and the
Registration Rights Agreement), shall be false or misleading in any material
respect when made and the breach of which has (or with the passage of time will
have) a material adverse effect on the rights of the Holder with respect to this
Note, the Purchase Agreement or the Registration Rights Agreement;

3.6 Receiver or Trustee. The Borrower or
any subsidiary of the Borrower shall make an assignment for the benefit of
creditors, or apply for or consent to the appointment of a receiver or trustee
for it or for a substantial part of its property or business, or such a receiver
or trustee shall otherwise be appointed;

3.7 Judgments. Any money judgment, writ or
similar process shall be entered or filed against the Borrower or any subsidiary
of the Borrower or any of its property or other assets for more than $50,000,
and shall remain unvacated, unbonded or unstayed for a period of twenty (20)
days unless otherwise consented to by the Holder, which consent will not be
unreasonably withheld;

3.8 Bankruptcy. Bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by
or against the Borrower or any subsidiary of the Borrower;

3.9 Delisting of Common Stock. The Borrower
shall fail to maintain the listing of the Common Stock on at least one of the
OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the
Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock
Exchange; or

3.10 Default Under Other Notes. An Event of
Default has occurred and is continuing under any of the other Notes issued
pursuant to the Purchase Agreement,

then, upon the occurrence and during the continuation of any
Event of Default specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or
3.10, at the option of the Holders of a majority of the aggregate principal
amount of the outstanding Notes issued pursuant to the Purchase Agreement
exercisable through the delivery of written notice to the Borrower by such
Holders (the "Default Notice"), and upon the occurrence of an Event of
Default specified in Section 3.6 or 3.8, the Notes shall become immediately due
and payable and the Borrower shall pay to the Holder, in full satisfaction of
its obligations hereunder, an amount equal to the greater of (i) 130% times
the sum of (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note to
the date of payment (the "Mandatory Prepayment Date") plus (y)
Default Interest, if any, on the amounts referred to in clauses (w) and/or (x)
plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and
1.4(g) hereof or pursuant to Section 2(c) of the Registration Rights Agreement
(the then outstanding principal amount of this Note to the date of payment 
plus the amounts referred to in clauses (x), (y) and (z) shall collectively
be known as the "Default Sum") or (ii) the "parity value" of the Default
Sum to be prepaid, where parity value means (a) the highest number of shares of
Common Stock issuable upon conversion of or otherwise pursuant to such Default
Sum in accordance with Article I, treating the Trading Day immediately preceding
the Mandatory Prepayment Date as the "Conversion Date" for purposes of
determining the lowest applicable Conversion Price, unless the Default Event
arises as a result of a breach in respect of a specific Conversion Date in which
case such Conversion Date shall be the Conversion Date), multiplied by
(b) the highest Closing Price for the Common Stock during the period beginning
on the date of first occurrence of the Event of Default and ending one day prior
to the Mandatory Prepayment Date (the "Default Amount") and all other
amounts payable hereunder shall immediately become due and payable, all without
demand, presentment or notice, all of which hereby are expressly waived,
together with all costs, including, without limitation, legal fees and expenses,
of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity. If the Borrower fails to pay the Default
Amount within five (5) business days of written notice that such amount is due
and payable, then the Holder shall have the right at any time, so long as the
Borrower remains in default (and so long and to the extent that there are
sufficient authorized shares), to require the Borrower, upon written notice, to
immediately issue, in lieu of the Default Amount, the number of shares of Common
Stock of the Borrower equal to the Default Amount divided by the Conversion
Price then in effect.

Article IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No
failure or delay on the part of the Holder in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privileges. All rights
and remedies existing hereunder are cumulative to, and not exclusive of, any
rights or remedies otherwise available.

4.2 Notices. Any notice herein required or
permitted to be given shall be in writing and may be personally served or
delivered by courier or sent by United States mail and shall be deemed to have
been given upon receipt if personally served (which shall include telephone line
facsimile transmission) or sent by courier or three (3) days after being
deposited in the United States mail, certified, with postage pre-paid and
properly addressed, if sent by mail. For the purposes hereof, the address of the
Holder shall be as shown on the records of the Borrower; and the address of the
Borrower shall be 1420 N. Lamar Boulevard, Oxford, Mississippi 38655, facsimile
number: 662-236-7663. Both the Holder and the Borrower may change the address
for service by service of written notice to the other as herein provided.

4.3 Amendments. This Note and any provision
hereof may only be amended by an instrument in writing signed by the Borrower
and the Holder. The term "Note" and all reference thereto, as used throughout
this instrument, shall mean this instrument (and the other Notes issued pursuant
to the Purchase Agreement) as originally executed, or if later amended or
supplemented, then as so amended or supplemented.

4.4 Assignability. This Note shall be
binding upon the Borrower and its successors and assigns, and shall inure to be
the benefit of the Holder and its successors and assigns. Each transferee of
this Note must be an "accredited investor" (as defined in Rule 501(a) of the
1933 Act). Notwithstanding anything in this Note to the contrary, this Note may
be pledged as collateral in connection with a bona fide margin
account or other lending arrangement.

4.5 Cost of Collection. If default is made
in the payment of this Note, the Borrower shall pay the Holder hereof costs of
collection, including reasonable attorneys' fees.

4.6 Governing Law. THIS NOTE SHALL BE
ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS
LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS
NOTE, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES
FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN
ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A
FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY
OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING
UNDER THIS NOTE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

4.7 Certain Amounts. Whenever pursuant to
this Note the Borrower is required to pay an amount in excess of the outstanding
principal amount (or the portion thereof required to be paid at that time) plus
accrued and unpaid interest plus Default Interest on such interest, the Borrower
and the Holder agree that the actual damages to the Holder from the receipt of
cash payment on this Note may be difficult to determine and the amount to be so
paid by the Borrower represents stipulated damages and not a penalty and is
intended to compensate the Holder in part for loss of the opportunity to convert
this Note and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Note at a price in excess of the price paid for such
shares pursuant to this Note. The Borrower and the Holder hereby agree that such
amount of stipulated damages is not plainly disproportionate to the possible
loss to the Holder from the receipt of a cash payment without the opportunity to
convert this Note into shares of Common Stock.

4.8 Allocations of Maximum Share Amount and
Reserved Amount. The Maximum Share Amount and Reserved Amount shall be
allocated pro rata among the Holders of Notes based on the principal amount of
such Notes issued to each Holder. Each increase to the Maximum Share Amount and
Reserved Amount shall be allocated pro rata among the Holders of Notes based on
the principal amount of such Notes held by each Holder at the time of the
increase in the Maximum Share Amount or Reserved Amount. In the event a Holder
shall sell or otherwise transfer any of such Holder's Notes, each transferee
shall be allocated a pro rata portion of such transferor's Maximum Share Amount
and Reserved Amount. Any portion of the Maximum Share Amount or Reserved Amount
which remains allocated to any person or entity which does not hold any Notes
shall be allocated to the remaining Holders of Notes, pro rata based on the
principal amount of such Notes then held by such Holders.

4.9 Damages Shares. The shares of Common
Stock that may be issuable to the Holder pursuant to Sections 1.3 and 1.4(g)
hereof and pursuant to Section 2(c) of the Registration Rights Agreement ("Damages
Shares") shall be treated as Common Stock issuable upon conversion of this
Note for all purposes hereof and shall be subject to all of the limitations and
afforded all of the rights of the other shares of Common Stock issuable
hereunder, including without limitation, the right to be included in the
Registration Statement filed pursuant to the Registration Rights Agreement. For
purposes of calculating interest payable on the outstanding principal amount
hereof, except as otherwise provided herein, amounts convertible into Damages
Shares ("Damages Amounts") shall not bear interest but must be converted
prior to the conversion of any outstanding principal amount hereof, until the
outstanding Damages Amounts is zero.

4.10 Denominations. At the request of the
Holder, upon surrender of this Note, the Borrower shall promptly issue new Notes
in the aggregate outstanding principal amount hereof, in the form hereof, in
such denominations of at least $50,000 as the Holder shall request.

4.11 Purchase Agreement. By its acceptance
of this Note, each Holder agrees to be bound by the applicable terms of the
Purchase Agreement.

4.12 Notice of Corporate Events. Except as
otherwise provided below, the Holder of this Note shall have no rights as a
Holder of Common Stock unless and only to the extent that it converts this Note
into Common Stock. The Borrower shall provide the Holder with prior notification
of any meeting of the Borrower's shareholders (and copies of proxy materials and
other information sent to shareholders). In the event of any taking by the
Borrower of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend or other
distribution, any right to subscribe for, purchase or otherwise acquire
(including by way of merger, consolidation, reclassification or
recapitalization) any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining shareholders who
are entitled to vote in connection with any proposed sale, lease or conveyance
of all or substantially all of the assets of the Borrower or any proposed
liquidation, dissolution or winding up of the Borrower, the Borrower shall mail
a notice to the Holder, at least twenty (20) days prior to the record date
specified therein (or thirty (30) days prior to the consummation of the
transaction or event, whichever is earlier), of the date on which any such
record is to be taken for the purpose of such dividend, distribution, right or
other event, and a brief statement regarding the amount and character of such
dividend, distribution, right or other event to the extent known at such time.
The Borrower shall make a public announcement of any event requiring
notification to the Holder hereunder substantially simultaneously with the
notification to the Holder in accordance with the terms of this Section 4.12.

4.13 Remedies. The Borrower acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder, by vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Borrower acknowledges that the remedy at law for a
breach of its obligations under this Note will be inadequate and agrees, in the
event of a breach or threatened breach by the Borrower of the provisions of this
Note, that the Holder shall be entitled, in addition to all other available
remedies at law or in equity, and in addition to the penalties assessable
herein, to an injunction or injunctions restraining, preventing or curing any
breach of this Note and to enforce specifically the terms and provisions
thereof, without the necessity of showing economic loss and without any bond or
other security being required.

 

Article V. CALL OPTION

5.1 Call Option. Notwithstanding anything
to the contrary contained in this Article V, so long as no Event of Default or
Trading Market Prepayment Event shall have occurred and be continuing, the
Borrower has a sufficient number of authorized shares of Common Stock reserved
for issuance upon full conversion of the Notes, then at any time after the Issue
Date, and the Common Stock is trading at or below $.04 per share, the Borrower
shall have the right, exercisable on not less than ten (10) Trading Days prior
written notice to the Holders of the Notes (which notice may not be sent to the
Holders of the Notes until the Borrower is permitted to prepay the Notes
pursuant to this Section 5.1), to prepay all of the outstanding Notes in
accordance with this Section 5.1. Any notice of prepayment hereunder (an "Optional
Prepayment") shall be delivered to the Holders of the Notes at their
registered addresses appearing on the books and records of the Borrower and
shall state (1) that the Borrower is exercising its right to prepay all of the
Notes issued on the Issue Date and (2) the date of prepayment (the "Optional
Prepayment Notice"). On the date fixed for prepayment (the "Optional
Prepayment Date"), the Borrower shall make payment of the Optional
Prepayment Amount (as defined below) to or upon the order of the Holders as
specified by the Holders in writing to the Borrower at least one (1) business
day prior to the Optional Prepayment Date. If the Borrower exercises its right
to prepay the Notes, the Borrower shall make payment to the holders of an amount
in cash (the "Optional Prepayment Amount") equal to either (i) 125% (for
prepayments occurring within thirty (30) days of the Issue Date), (ii) 135% (for
prepayments occurring between thirty-one (31) and sixty (60) days of the Issue
Date) and (iii) 140% (for prepayments occurring on or after the sixty-first (61st)
day following the Issue Date), multiplied by the sum of (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the
unpaid principal amount of this Note to the Optional Prepayment Date plus
(y) Default Interest, if any, on the amounts referred to in clauses (w) and (x)
plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and
1.4(g) hereof or pursuant to Section 2(c) of the Registration Rights Agreement
(the then outstanding principal amount of this Note to the date of payment 
plus the amounts referred to in clauses (x), (y) and (z) shall collectively
be known as the "Optional Prepayment Sum"). Notwithstanding notice of an
Optional Prepayment, the Holders shall at all times prior to the Optional
Prepayment Date maintain the right to convert all or any portion of the Notes in
accordance with Article I and any portion of Notes so converted after receipt of
an Optional Prepayment Notice and prior to the Optional Prepayment Date set
forth in such notice and payment of the aggregate Optional Prepayment Amount
shall be deducted from the principal amount of Notes which are otherwise subject
to prepayment pursuant to such notice. If the Borrower delivers an Optional
Prepayment Notice and fails to pay the Optional Prepayment Amount due to the
Holders of the Notes within two (2) business days following the Optional
Prepayment Date, the Borrower shall forever forfeit its right to redeem the
Notes pursuant to this Section 5.1.

5.2 Partial Call Option. Notwithstanding
anything to the contrary contained in this Article V, in the event that the
Average Daily Price of the Common Stock, as reported by the Reporting Service,
for each day of the month ending on any Determination Date is below the Initial
Market Price, the Borrower may, at its option, prepay a portion of the
outstanding principal amount of the Notes equal to 104% of the principal amount
hereof divided by thirty-six (36) plus one month's interest. The term 
"Initial Market Price" means shall mean the volume weighted average price of
the Common Stock for the five (5) Trading Days immediately preceding the Closing
which is $.06. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Borrower has caused this Note to be
signed in its name by its duly authorized officer this 10th day of
April, 2007.

MODERN TECHNOLOGY CORP.

                        
                         

                        

                         

                        
                        
                        By:
                        

                        
                        Anthony K. Welch

                        
                        Chief Executive Officer

                        
                        
                        

                      
                    
                  
                
              
            
          
        
      
    
  

EXHIBIT A

NOTICE OF CONVERSION

(To be Executed by the Registered Holder

in order to Convert the Notes)

The undersigned hereby irrevocably elects to convert
$__________ principal amount of the Note (defined below) into shares of common
stock, par value $.0001 per share ("Common Stock"), of Modern Technology
Corp., a Nevada corporation (the "Borrower") according to the conditions
of the convertible Notes of the Borrower dated as of April 10, 2007 (the "Notes"),
as of the date written below. If securities are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates. No
fee will be charged to the Holder for any conversion, except for transfer taxes,
if any. A copy of each Note is attached hereto (or evidence of loss, theft or
destruction thereof).

The Borrower shall electronically transmit the Common Stock
issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system
("DWAC Transfer").

Name of DTC Prime Broker: 

  

Account Number: 

In lieu of receiving shares of Common Stock issuable pursuant
to this Notice of Conversion by way of a DWAC Transfer, the undersigned hereby
requests that the Borrower issue a certificate or certificates for the number of
shares of Common Stock set forth below (which numbers are based on the Holder's
calculation attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto:

Name: 

  

Address: 

The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable to the undersigned upon
conversion of the Notes shall be made pursuant to registration of the securities
under the Securities Act of 1933, as amended (the "Act"), or pursuant to
an exemption from registration under the Act.

Date of Conversion:___________________________

        Applicable Conversion Price:____________________

        Number of Shares of Common Stock to be Issued
        Pursuant to

        Conversion of the Notes:______________

        Signature:___________________________________

        Name:______________________________________

        Address:____________________________________

        

      
    
  

The Borrower shall issue and deliver shares of Common Stock
to an overnight courier not later than three business days following receipt of
the original Note(s) to be converted, and shall make payments pursuant to the
Notes for the number of business days such issuance and delivery is late.

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