Document:

Exhibit 10.2

 

 

 

NEITHER THIS WARRANT NOR THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. 
SUBJECT TO SECTION 6 BELOW, NO SALE OR DISPOSITION MAY BE
EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR WITH AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR
HOLDER, SATISFACTORY TO COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION.

 

 

SAMPLE

 

 

WARRANT TO PURCHASE                    SHARES
OF COMMON STOCK

 

 

 

June 27, 2008

 

 

THIS CERTIFIES THAT, for value received, [GE Capital Equity Investments, Inc.] [CIT Healthcare LLC]
(“Holder”) is entitled to subscribe for and purchase
                    
(                )
shares of fully paid and nonassessable Common Stock of Helicos Biosciences Corporation, a Delaware corporation (the “Company”),
at the Warrant Price (as hereinafter defined), subject to the provisions and upon
the terms and conditions hereinafter set forth. 
As used herein, the term “Common Stock” shall mean Company’s presently
authorized common stock,
$                
par value per share, and any stock into which such common stock may hereafter
be converted or exchanged and the term “Warrant Shares” shall mean the shares
of Common Stock which Holder may acquire pursuant to this Warrant and any other
shares of stock into which such shares of Common Stock may hereafter be
converted or exchanged.

 

1.             Warrant Price.  The “Warrant Price” shall initially be four
dollars and eighty cents ($4.80) per share, subject to adjustment as provided
in Section 7 below.

 

2.             Conditions
to Exercise.  The purchase right
represented by this Warrant may be exercised at any time, or from time to time,
in whole or in part during the term commencing on the date hereof and ending at
5:00 P.M. Pacific time on the sixth anniversary of the date of this
Warrant (the “Expiration Date”).

 

3.             Method of Exercise or
Conversion; Payment; Issuance of Shares; Issuance of New Warrant.

 

(a)           Cash Exercise.  Subject to Section 2 hereof, the
purchase right represented by this Warrant may be exercised by Holder hereof,
in whole or in part, by the surrender of the original of this Warrant (together
with a duly executed Notice of Exercise in substantially the form attached
hereto) at the principal office of Company (as set forth in Section 19
below) and by payment to Company, by certified or bank check, or wire transfer
of immediately available funds, of an amount equal to the then applicable
Warrant Price per share multiplied by the number of Warrant Shares then being
purchased.  In the event of any exercise
of the rights represented by this Warrant, certificates for the shares of stock
so purchased shall be in the name of, and delivered to, Holder hereof, or as
such Holder may direct (subject to the terms of transfer contained herein and
upon payment by such Holder hereof of any applicable transfer taxes).  Such delivery shall be made within
30 days after exercise of this Warrant and at Company’s expense and,
unless this Warrant has been fully exercised 

 

 

 

 

or expired, a new Warrant having terms and conditions substantially
identical to this Warrant and representing the portion of the Warrant Shares,
if any, with respect to which this Warrant shall not have been exercised, shall
also be issued to Holder hereof within 30 days after exercise of this
Warrant.

 

(b)           Conversion.   In lieu of exercising this Warrant as
specified in Section 3(a), Holder may from time to time convert this
Warrant, in whole or in part, into Warrant Shares  by surrender of the original of this Warrant
(together with a duly executed Notice of Exercise in substantially the form
attached hereto) at the principal office of Company, in which event Company
shall issue to Holder the number of Warrant Shares computed using the following
formula:

 

X = Y (A-B)

            A

 

Where:

 

X = the number of Warrant Shares to be issued to
Holder.

 

Y = the number of Warrant Shares purchasable under
this Warrant (at the date of such calculation).

 

A = the Fair Market Value of
one share of Company’s Common Stock (at the date of such calculation).

 

B = Warrant Price (as adjusted to the date of such calculation).

 

(c)          Fair Market Value.  For purposes of this Section 3, Fair
Market Value of one share of Company’s Common Stock shall mean:

 

(i)            The
average of the closing bid and asked prices of Common Stock quoted in the
Over-The-Counter Market Summary, the last reported sale price quoted on the
Nasdaq Stock Market or on any other exchange on which the Common Stock is
listed, whichever is applicable, as published in the Western Edition of the Wall
Street Journal for the three (3) trading days prior to the
date of determination of Fair Market Value; or

 

(ii)           In
the event of an exercise in connection with an Acquisition (as hereinafter
defined), the per share Fair Market Value for the Common Stock shall be the
value to be received per share of Common Stock by all holders of the Common
Stock in such transaction as determined by the Board of Directors; or

 

(iii)          In
any other instance, the per share Fair Market Value for the Common Stock shall
be as determined in the reasonable good faith judgment of Company’s Board of
Directors.

 

In the event of 3(c)(ii) or 3(c)(iii), above,
Company’s Board of Directors shall prepare a certificate, to be signed by an
authorized officer of Company, setting forth in reasonable detail the basis for
and method of determination of the per share Fair Market Value of the Common
Stock.  The Board of Directors will also
certify to Holder that this per share Fair Market Value will be applicable to
all holders of Company’s Common Stock. 
Such certification must be made to Holder at least thirty (30)
business days prior to the proposed effective date of the merger,
consolidation, sale, or other triggering event as defined in 3(c)(ii) or
3(c)(iii).

 

(d)           Automatic Exercise.  To the extent this Warrant
is not previously exercised, it shall be deemed to have been automatically
converted in accordance with Sections 3(b) and 3(c) hereof
(even 

 

 

2

 

 

if not surrendered) as of
immediately before its expiration, involuntary termination or cancellation if
the then-Fair Market Value of a Warrant Share exceeds the then-Warrant Price,
unless Holder notifies Company in writing to the contrary prior to such
automatic exercise.

 

(e)           Treatment of
Warrant Upon Acquisition of Company.

 

(i)            Certain Definitions.  For the purpose of this Warrant,
“Acquisition” means any sale, license, or other disposition of all or
substantially all of the assets of Company, or any reorganization,
consolidation, or merger of Company, or sale of outstanding Company securities
by holders thereof, where the holders of Company’s securities before the
transaction beneficially own less than a majority of the outstanding voting
securities of the successor or surviving entity after the transaction.  For purposes of this Section 3(e),
“Affiliate” shall mean any person or entity that owns or controls directly or
indirectly ten percent (10%) or more of the voting capital stock of Company,
any person or entity that controls or is controlled by or is under common
control with such persons or entities, and each of such person’s or entity’s
officers, directors, joint venturers or partners, as applicable.

 

(ii)           Cash Acquisition. 
In the event of an Acquisition in which the sole consideration to be
received by the holders of the Company’s common stock (other than such
stockholders who are employees or Affiliates of the Company) is cash, Holder
shall either (a) exercise its conversion or purchase right under this
Warrant and such exercise will be deemed effective immediately prior to the
consummation of such Acquisition or (b) have the Warrant expire upon the
consummation of such Acquisition (and the Warrant shall so expire upon the
consummation of such Acquisition). 
Company shall provide Holder with written notice of any proposed
Acquisition together with such reasonable information as Holder may request in
connection with such contemplated Acquisition giving rise to such notice, which
is to be delivered to Holder not less than ten (10) business days prior to
the closing of the proposed Acquisition.

 

(iii)          Asset Sale. 
In the event of an Acquisition that is an arms length sale of all or
substantially all of Company’s assets (and only its assets) to a third party
that is not an Affiliate of Company (a “True Asset Sale”), Holder shall
either (a) exercise its conversion or purchase right under this Warrant
and such exercise will be deemed effective immediately prior to the
consummation of such Acquisition or (b) have the Warrant continue until
the Expiration Date if Company continues as a going concern following the
closing of any such True Asset Sale. 
Company shall provide Holder with written notice of any proposed asset
sale together with such reasonable information as Holder may request in
connection with such asset sale giving rise to such notice, which is to be
delivered to Holder not less than ten (10) business days prior to the
closing of the proposed asset sale.

 

(iv)          Assumption of Warrant.  Upon the closing of any Acquisition other
than those particularly described in subsections (ii) and (iii) above,
the successor entity shall assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Warrant Shares issuable upon exercise of the
unexercised portion of this Warrant as if such Warrant Shares were outstanding
on the record date for the Acquisition and subsequent closing.  The Warrant Price and/or number of Warrant
Shares shall be adjusted accordingly.

 

 

3

 

 

4.             Representations
and Warranties of Holder and Company.

 

(a)           Representations and Warranties by Holder.  Holder represents and warrants to Company
with respect to this purchase as follows:

 

(i)            Evaluation.  Holder has substantial experience in
evaluating and investing in private placement transactions of securities of
companies similar to Company so that Holder is capable of evaluating the merits
and risks of its investment in Company and has the capacity to protect its
interests.

 

(ii)           Resale.  Except for transfers to an affiliate of
Holder, Holder is acquiring this Warrant and the Warrant Shares issuable upon
exercise of this Warrant (collectively the “Securities”) for investment
for its own account and not with a view to, or for resale in connection with,
any distribution thereof.  Holder
understands that the Securities have not been registered under the Securities
Act of 1933, as amended (the “Act”) by reason of a specific exemption
from the registration provisions of the Act which depends upon, among other
things, the bona fide nature of the investment intent as expressed herein.

 

(iii)          Rule 144. 
Holder acknowledges that the Securities must be held indefinitely unless
subsequently registered under the Act or an exemption from such registration is
available.  Holder is aware of the
provisions of Rule 144 promulgated under the Act.

 

(iv)          Accredited Investor. 
Holder is an “accredited investor” within the meaning of Regulation D
promulgated under the Act.

 

(v)           Opportunity To Discuss.  Holder has had an opportunity to discuss
Company’s business, management and financial affairs with its management and an
opportunity to review Company’s facilities. 
Holder understands that such discussions, as well as the written
information issued by Company, were intended to describe the aspects of
Company’s business and prospects which Company believes to be material but were
not necessarily a thorough or exhaustive description.

 

(b)           Representations and Warranties by Company.   Company hereby represents and warrants to
Holder that the statements in the following paragraphs of this Section 4(b) are
true and correct (a) as of the date hereof and (b) except where any
such representation and warranty relates specifically to an earlier date, as of
the date of any exercise of this Warrant.

 

(i)            Corporate
Organization and Authority.  Company (a) is
a corporation duly organized, validly existing, and in good standing in its
jurisdiction of incorporation, (b) has the corporate power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted; and (c) is qualified as a foreign
corporation in all jurisdictions where such qualification is required.

 

(ii)           Corporate
Power.  Company has all requisite
legal and corporate power and authority to execute, issue and deliver this
Warrant, to issue the Warrant Shares issuable upon exercise or conversion of
this Warrant, and to carry out and perform its obligations under this Warrant
and any related agreements.

 

(iii)          Authorization;
Enforceability.  All corporate action
on the part of Company, its officers, directors and shareholders necessary for
the authorization, execution, delivery and performance of its obligations under
this Warrant and for the authorization, issuance and delivery of this Warrant
and the Warrant Shares issuable upon exercise of this Warrant has been taken
and this Warrant constitutes the legally binding and valid obligation of
Company enforceable in accordance with its terms.

 

 

4

 

 

(iv)          Valid
Issuance of Warrant and Warrant Shares. 
This Warrant has been validly issued and is free of restrictions on
transfer other than restrictions on transfer set forth herein and under
applicable state and federal securities laws. The Warrant Shares issuable upon
conversion of this Warrant, when issued, sold and delivered in accordance with
the terms of this Warrant for the consideration expressed herein, will be duly
and validly issued, fully paid and nonassessable, and will be free of
restrictions on transfer other than restrictions on transfer under this Warrant
and under applicable state and federal securities laws.  Subject to applicable restrictions on
transfer, the issuance and delivery of this Warrant and the Warrant Shares
issuable upon exercise or conversion of this Warrant are not subject to any preemptive
or other similar rights or any liens or encumbrances except as specifically set
forth in Company’s Certificate of Incorporation or this Warrant.  The offer, sale and issuance of the Warrant
Shares, as contemplated by this Warrant, are exempt from the prospectus and
registration requirements of applicable United States federal and state
security laws, and neither Company nor any authorized agent acting on its
behalf has or will take any action hereafter that would cause the loss of such
exemption.

 

(v)           No Conflict.  The execution, delivery, and performance of this
Warrant will not result in (a) any violation of, be in conflict with, or
constitute a default under, with or without the passage of time or the giving
of notice (1) any provision of Company’s Certificate of Incorporation or
by-laws; (2) any provision of any judgment, decree, or order to which
Company is a party, by which it is bound, or to which any of its material
assets are subject; (3) any contract, obligation, or commitment to which
Company is a party or by which it is bound; or (4) any statute, rule, or
governmental regulation applicable to Company, or (b) the creation of any
lien, charge or encumbrance upon any assets of Company.

 

(vi)          Reports.
Company has previously furnished or made available to Holder complete and
accurate copies, as amended or supplemented, of its (a) Annual Report on Form 10-K
for the fiscal year ended December 31, 2007, as filed with the Securities
and Exchange Commission (the “SEC”), and (b) all other reports filed
by Company under Section 13 or subsections (a) or (c) of Section 14
of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) with
the SEC since December 31, 2007 (such reports are collectively
referred to herein as the “Company Reports”).  The Company Reports constitute all of the
documents required to be filed by Company under Section 13 or subsections (a) or
(c) of Section 14 of the Exchange Act with the SEC from December 31, 2007
through the date of this Warrant. 
The Company Reports complied in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder
when filed.  As of their respective
dates, the Company Reports did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

5.             Legends.

 

(a)           Legend.  Each
certificate representing the Warrant Shares shall be endorsed with
substantially the following legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED (UNLESS SUCH TRANSFER IS
TO AN AFFILIATE OF HOLDER) UNLESS COVERED BY AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT, A “NO ACTION” LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS
OF RULE 144 OF THE SECURITIES 

 

 

5

 

 

AND EXCHANGE COMMISSION, OR (IF REASONABLY REQUIRED
BY COMPANY) AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

Company need not enter into its stock records a
transfer of Warrant Shares unless the conditions specified in the foregoing
legend are satisfied.  Company may also
instruct its transfer agent not to allow the transfer of any of the Warrant
Shares unless the conditions specified in the foregoing legend are
satisfied.

 

(b)           Removal of Legend and Transfer Restrictions.  The legend relating to the Act endorsed on a
certificate pursuant to paragraph 5(a) of this Warrant shall be removed
and Company shall issue a certificate without such legend to Holder if (i) the
Securities are registered under the Act and a prospectus meeting the
requirements of Section 10 of the Act is available or (ii) Holder
provides to Company an opinion of counsel for Holder reasonably satisfactory to
Company, a no-action letter or interpretive opinion of the staff of the SEC
reasonably satisfactory to Company, or other evidence reasonably satisfactory
to Company, to the effect that public sale, transfer or assignment of the
Securities may be made without registration and without compliance with any
restriction such as Rule 144.

 

6.             Condition
of Transfer or Exercise of Warrant. 
It shall be a condition to any transfer or exercise of this Warrant that
at the time of such transfer or exercise, Holder shall provide Company with a
representation in writing that Holder or transferee is acquiring this Warrant
and the shares of Common Stock to be issued upon exercise for investment
purposes only and not with a view to any sale or distribution, or will provide
Company with a statement of pertinent facts covering any proposed distribution.  As a further condition to any transfer of
this Warrant or any or all of the shares of Common Stock issuable upon exercise
of this Warrant, other than a transfer registered under the Act, Company may
request a legal opinion, in form and substance satisfactory to Company and its
counsel, reciting the pertinent circumstances surrounding the proposed transfer
and stating that such transfer is exempt from the registration and prospectus
delivery requirements of the Act. 
Company shall not require Holder to provide an opinion of counsel if the
transfer is to an affiliate of Holder. 
As further condition to each transfer, at the request of Company, Holder
shall surrender this Warrant to Company and the transferee shall receive and
accept a Warrant, of like tenor and date, executed by Company.

 

7.             Adjustment for Certain Events.
The number and kind of securities purchasable upon the exercise of this Warrant
and the Warrant Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:

 

(a)           Reclassification or Merger.  In the case of (i) any reclassification
or change of securities of the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or combination), (ii) other
than a transaction constituting an Acquisition (in which case the provisions of
Section 3(e) shall apply), any merger of Company with or into another
corporation (other than a merger with another corporation in which Company is
the acquiring and the surviving corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), or (iii) other than a transaction constituting an Acquisition
(in which case the provisions of Section 3(e) shall apply), any
sale of all or substantially all of the assets of Company, Company, or such
successor or purchasing corporation, as the case may be, shall duly execute and
deliver to Holder a new Warrant (in form and substance reasonably satisfactory
to Holder of this Warrant), or Company shall make appropriate provision without
the issuance of a new Warrant, so that Holder shall have the right to receive,
at a total purchase price not to exceed that payable upon the exercise of the
unexercised portion of this Warrant, and in lieu of the Warrant Shares
theretofore issuable 

 

 

6

 

 

upon
exercise or conversion of this Warrant, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification,
change, merger or sale by a holder of the number of shares of Common Stock then
purchasable under this Warrant, or in the case of such a merger or sale in
which the consideration paid consists all or in part of assets other than
securities of the successor or purchasing corporation, at the option of Holder,
the securities of the successor or purchasing corporation having a value at the
time of the transaction equivalent to the value of the Warrant Shares
purchasable upon exercise of this Warrant at the time of the transaction.  Any new Warrant shall provide for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 7.  The
provisions of this subparagraph (a) shall similarly apply to successive
reclassifications, changes, mergers and transfers.

 

(b)           Subdivision or Combination of Shares.  If Company at any time while this Warrant
remains outstanding and unexpired shall subdivide or combine its outstanding
shares of Common Stock, the Warrant Price shall be proportionately decreased
and the number of Warrant Shares issuable hereunder shall be proportionately
increased in the case of a subdivision and the Warrant Price shall be
proportionately increased and the number of Warrant Shares issuable hereunder
shall be proportionately decreased in the case of a combination.

 

(c)           Stock Dividends and Other Distributions.  If Company at any time while this Warrant is
outstanding and unexpired shall (i) pay a dividend with respect to Common
Stock payable in Common Stock, then the Warrant Price shall be adjusted, from
and after the date of determination of shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Warrant
Price in effect immediately prior to such date of determination by a fraction (A) the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (B) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution; or (ii) make
any other distribution with respect to Common Stock (except any distribution
specifically provided for in Sections 7(a) and 7(b)), then, in each
such case, provision shall be made by Company such that Holder shall receive
upon exercise of this Warrant a proportionate share of any such dividend or
distribution as though it were Holder of the Warrant Shares as of the record
date fixed for the determination of the shareholders of Company entitled to
receive such dividend or distribution.

 

(d)           Adjustment of Number of Shares.  Upon each adjustment in the Warrant Price,
the number of Warrant Shares purchasable hereunder shall be adjusted, to the
nearest whole share, to the product obtained by multiplying the number of
Warrant Shares purchasable immediately prior to such adjustment in the Warrant
Price by a fraction, the numerator of which shall be the Warrant Price
immediately prior to such adjustment and the denominator of which shall be the
Warrant Price immediately thereafter.

 

8.             Notice of Adjustments.  Whenever any Warrant Price or the kind or
number of securities issuable under this Warrant shall be adjusted pursuant to Section 7
hereof, Company shall prepare a certificate signed by an officer of Company
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the Warrant Price and number or kind of shares issuable upon exercise of
this Warrant after giving effect to such adjustment, and shall cause copies of
such certificate to be mailed (by certified or registered mail, return receipt
required, postage prepaid) within thirty (30) days of such adjustment
to Holder as set forth in Section 19 hereof.

 

9.             Financial and Other Reports.  From time to time up to the earlier of the
Expiration Date or the complete exercise of this Warrant, Company shall furnish
to Holder, if Company is a private company, (a) unaudited consolidated
and, if available, consolidating balance sheets, statements of operations and
cash flow statements within 30 days of each month end, in a form acceptable to
Holder and certified by 

 

 

7

 

 

Company’s
president or chief financial officer, and (b) Company’s complete annual
audited consolidated and, if available, consolidating balance sheets,
statements of operations and cash flow statements certified by an independent
certified public accountant selected by Company and satisfactory to Holder
within 120 days of the fiscal year end or, if sooner, at such time as Company’s
Board of Directors receives the audit.

 

10.           Transferability of Warrant.  This Warrant is transferable on the books of
Company at its principal office by the registered Holder hereof upon surrender
of this Warrant properly endorsed, subject to compliance with Section 6
and applicable federal and state securities laws.  Company shall issue and deliver to the
transferee a new Warrant representing the Warrant so transferred.  Upon any partial transfer, Company will issue
and deliver to Holder a new Warrant with respect to the Warrant not so transferred.  Holder shall not have any right to transfer
any portion of this Warrant to any direct competitor of Company.

 

11.           Reserved.

 

12.           No Fractional Shares.  No fractional share of Common Stock will be
issued in connection with any exercise or conversion hereunder, but in lieu of
such fractional share Company shall make a cash payment therefor upon the basis
of the Warrant Price then in effect.

 

13.           Charges, Taxes and Expenses.  Issuance of certificates for shares of Common
Stock upon the exercise or conversion of this Warrant shall be made without
charge to Holder for any United States or state of the United States
documentary stamp tax or other incidental expense with respect to the issuance
of such certificate, all of which taxes and expenses shall be paid by Company,
and such certificates shall be issued in the name of Holder.

 

14.           No Shareholder Rights Until
Exercise.  Except as expressly
provided herein, this Warrant does not entitle Holder to any voting rights or
other rights as a shareholder of Company prior to the exercise hereof.

 

15.           Registry of Warrant.  Company shall maintain a registry showing the
name and address of the registered Holder of this Warrant.  This Warrant may be surrendered for exchange
or exercise, in accordance with its terms, at such office or agency of Company,
and Company and Holder shall be entitled to rely in all respects, prior to
written notice to the contrary, upon such registry.

 

16.           Loss, Theft, Destruction or
Mutilation of Warrant.  Upon receipt
by Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft, or
destruction, of indemnity reasonably satisfactory to it, and, if mutilated,
upon surrender and cancellation of this Warrant, Company will execute and
deliver a new Warrant, having terms and conditions substantially identical to
this Warrant, in lieu hereof.

 

17.           Miscellaneous.

 

(a)           Issue
Date.  The provisions of this Warrant
shall be construed and shall be given effect in all respect as if it had been
issued and delivered by Company on the date hereof.

 

(b)           Successors.  This Warrant shall be binding upon any
successors or assigns of Company.

 

(c)           Headings.  The headings used in this Warrant are used
for convenience only and are not to be considered in construing or interpreting
this Warrant.

 

(d)           Saturdays,
Sundays, Holidays.  If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday or a Sunday or shall be a legal 

 

 

8

 

 

holiday in the State of New York, then
such action may be taken or such right may be exercised on the next succeeding
day not a legal holiday.

 

(e)           Attorney’s Fees.   In the event of any dispute between the
parties concerning the terms and provisions of this Warrant, the party
prevailing in such dispute shall be entitled to collect from the other party
all costs incurred in such dispute, including reasonable attorney’s fees.

 

18.           No Impairment.  Company will not, by amendment of its
Certificate of Incorporation or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of Holder hereof against impairment.

 

19.           Addresses.  Any notice required or permitted hereunder
shall be in writing and shall be mailed by overnight courier, registered or certified
mail, return receipt requested, and postage prepaid, or otherwise delivered by
hand or by messenger, addressed as set forth below, or at such other address as
Company or Holder hereof shall have furnished to the other party in accordance
with the delivery instructions set forth in this Section 19.

 

 

	
   

  	
   

  	
  If to Company:

  	
  Helicos Biosciences Corporation

  
	
   

  	
   

  	
   

  	
  One Kendall Square, Building 700

  
	
   

  	
   

  	
   

  	
  Cambridge, MA 02139

  
	
   

  	
   

  	
   

  	
  Phone:

  	
   

  
	
   

  	
   

  	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  	
   

  	
  Attn:

  	
   

  
							

 

	
   

  	
  [If
  to Holder:

  	
  GE Capital Equity
  Investments, Inc.

  
	
   

  	
   

  	
  201
  Merritt 7, 1st Floor

  
	
   

  	
   

  	
  P.O. Box
  5201

  
	
   

  	
   

  	
  Norwalk,
  Connecticut 06851

  
	
   

  	
   

  	
  Attn:
  General Counsel

  

 

	
   

  	
  With
  copies to:

  	
  General
  Electric Capital Corporation

  
	
   

  	
   

  	
  c/o
  GE Healthcare Financial Services, Inc.

  
	
   

  	
   

  	
  83
  Wooster Heights Road, Fifth Floor

  
	
   

  	
   

  	
  Danbury,
  Connecticut 06810

  
	
   

  	
   

  	
  Attn:

  	
  Senior
  Managing Director and

  
	
   

  	
   

  	
   

  	
  Senior
  Vice President of Risk]

  

 

 

	
   

  	
   

  	
  [OR]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [If
  to Holder:

  	
  CIT
  Healthcare LLC

  
	
   

  	
   

  	
   

  	
  305
  Fellowship Road, Suite 300

  
	
   

  	
   

  	
   

  	
  Mount
  Laurel, New Jersey 08054

  
	
   

  	
   

  	
   

  	
  Phone:
  (856) 813-2696

  
	
   

  	
   

  	
   

  	
  Facsimile:
  (856) 813-2996

  
	
   

  	
   

  	
   

  	
  Attn:
  Legal

  

 

	
   

  	
  With
  a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  	
                                                                                               ]

  

 

 

9

 

 

If
mailed by registered or certified mail, return receipt requested, and postage
prepaid, notice shall be deemed to be given five (5) days after being
sent, and if sent by overnight courier, by hand or by messenger, notice shall
be deemed to be given when delivered (if on a business day, and if not, on the
next business day).

 

20.           WAIVER
OF JURY TRIAL.  EACH OF THE PARTIES
HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS WARRANT OR THE
WARRANT SHARES.

 

21.           GOVERNING LAW.  THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

 

 

 

[Remainder of
page intentionally blank; signature page follows]

 

 

10

 

 

 

IN WITNESS WHEREOF, Company  has caused
this Warrant to be executed by its officer thereunto duly authorized.

 

 

	
  HELICOS
  BIOSCIENCES CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  	 

	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
  Title:

  	
   

  	
   

  
	
   

  
	
  Dated as of                                   ,
  200     .

  
							

 

 

 

 

SAMPLE

 

 

11

 

 

NOTICE OF EXERCISE

 

 

	
  To:

  	 

	
  Helicos
  Biosciences Corporation

  	 

	
  One Kendall Square, Building 700

  	 

	
  Cambridge, MA 02139

  	 

	
  Phone:

  	
   

  	
   

  	 

	
  Facsimile:

  	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  	 

						

 

 

1.                                       The undersigned Warrantholder (“Holder”)
elects to acquire shares of the Common Stock (the “Common Stock”) of Helicos Biosciences Corporation (the
“Company”), pursuant to the terms of the Stock Purchase Warrant dated                                     ,
2008 (the “Warrant”).

 

2.                                       Holder exercises its rights under the
Warrant as set forth below:

 

	
   

  	
  (          )

  	
  Holder elects to
  purchase                           
  shares of Common Stock as provided in Section 3(a) and tenders
  herewith a check in the amount of $                          
  as payment of the purchase price.

  
	
   

  	
   

  	
   

  
	
   

  	
  (          )

  	
  Holder
  elects to convert the purchase rights into shares of Common Stock as provided
  in Section 3(b) of the Warrant.

  

 

3.                                       Holder surrenders the Warrant with this
Notice of Exercise.

 

Holder represents
that it is acquiring the aforesaid shares of Common Stock for investment and
not with a view to or for resale in connection with distribution and that
Holder has no present intention of distributing or reselling the shares.

 

Please issue a
certificate representing the shares of the Common Stock in the name of Holder
or in such other name as is specified below:

 

	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Taxpayer I.D.:

  	
   

  

 

 

	
   

  	
  [NAME OF HOLDER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:                      ,
  200     

  
					

 

 

12Exhibit 4.1

 

 

 

LINN ENERGY, LLC

 

LINN ENERGY FINANCE CORP.

 

AND

 

THE GUARANTORS NAMED ON THE SIGNATURE PAGE
HEREOF

 

 

97/8% SENIOR NOTES DUE 2018

 

 

INDENTURE

 

Dated as of June 27, 2008

 

 

U.S. BANK NATIONAL ASSOCIATION,

 

As Trustee

 

 

 

 

CROSS-REFERENCE TABLE*

 

	
  Trust Indenture

  Act Section

  	
   

  	
  Indenture

  Section

  	
   

  
	
  310(a)(1)

  	
   

  	
  7.10

  	
   

  
	
  (a)(2)

  	
   

  	
  7.10

  	
   

  
	
  (a)(3)

  	
   

  	
  N/A

  	
   

  
	
  (a)(4)

  	
   

  	
  N/A

  	
   

  
	
  (a)(5)

  	
   

  	
  7.10

  	
   

  
	
  (b)

  	
   

  	
  7.10

  	
   

  
	
  (c)

  	
   

  	
  N/A

  	
   

  
	
  311(a)

  	
   

  	
  7.11

  	
   

  
	
  (b)

  	
   

  	
  7.11

  	
   

  
	
  (c)

  	
   

  	
  N/A

  	
   

  
	
  312(a)

  	
   

  	
  2.05

  	
   

  
	
  (b)

  	
   

  	
  11.03

  	
   

  
	
  (c)

  	
   

  	
  11.03

  	
   

  
	
  313(a)

  	
   

  	
  7.06

  	
   

  
	
  (b)(1)

  	
   

  	
  7.06

  	
   

  
	
  (b)(2)

  	
   

  	
  7.06, 7.07

  	
   

  
	
  (c)

  	
   

  	
  7.06, 11.02

  	
   

  
	
  (d)

  	
   

  	
  7.06

  	
   

  
	
  314(a)

  	
   

  	
  4.03, 4.04, 11.02

  	
   

  
	
  (b)

  	
   

  	
  N/A

  	
   

  
	
  (c)(1)

  	
   

  	
  11.04

  	
   

  
	
  (c)(2)

  	
   

  	
  11.04

  	
   

  
	
  (c)(3)

  	
   

  	
  N/A

  	
   

  
	
  (d)

  	
   

  	
  N/A

  	
   

  
	
  (e)

  	
   

  	
  11.05

  	
   

  
	
  (f)

  	
   

  	
  N/A

  	
   

  
	
  315(a)

  	
   

  	
  7.01

  	
   

  
	
  (b)

  	
   

  	
  7.05, 11.02

  	
   

  
	
  (c)

  	
   

  	
  7.01

  	
   

  
	
  (d)

  	
   

  	
  7.01

  	
   

  
	
  (e)

  	
   

  	
  6.11

  	
   

  
	
  316(a)(last
  sentence)

  	
   

  	
  2.08

  	
   

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  	
   

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  	
   

  
	
  (a)(2)

  	
   

  	
  N/A

  	
   

  
	
  (b)

  	
   

  	
  6.07

  	
   

  
	
  (c)

  	
   

  	
  9.04

  	
   

  
	
  317(a)(1)

  	
   

  	
  6.08

  	
   

  
	
  (a)(2)

  	
   

  	
  6.09

  	
   

  
	
  (b)

  	
   

  	
  2.04

  	
   

  
	
  318(a)

  	
   

  	
  11.01

  	
   

  
	
  (b)

  	
   

  	
  N/A

  	
   

  
	
  (c)

  	
   

  	
  11.01

  	
   

  

 

  N/A means not applicable.

 

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

 

i

 

TABLE OF CONTENTS

 

	
  CROSS-REFERENCE TABLE*

  	
  i

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section
  1.01.

  	
  Definitions

  	
  1

  
	
  Section
  1.02.

  	
  Other Definitions

  	
  32

  
	
  Section
  1.03.

  	
  Incorporation by Reference of Trust Indenture Act

  	
  33

  
	
  Section
  1.04.

  	
  Rules of Construction

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 THE NOTES

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section
  2.01.

  	
  Form and Dating

  	
  33

  
	
  Section
  2.02.

  	
  Execution and Authentication

  	
  34

  
	
  Section
  2.03.

  	
  Registrar and Paying Agent

  	
  34

  
	
  Section
  2.04.

  	
  Paying Agent to Hold Money in Trust

  	
  35

  
	
  Section
  2.05.

  	
  Noteholder Lists

  	
  35

  
	
  Section
  2.06.

  	
  Transfer and Exchange

  	
  35

  
	
  Section
  2.07.

  	
  Replacement Notes

  	
  35

  
	
  Section
  2.08.

  	
  Outstanding Notes

  	
  36

  
	
  Section 2.09.

  	
  Temporary Notes

  	
  36

  
	
  Section
  2.10.

  	
  Cancellation

  	
  36

  
	
  Section
  2.11.

  	
  Defaulted Interest

  	
  37

  
	
  Section
  2.12.

  	
  CUSIP Numbers

  	
  37

  
	
  Section
  2.13.

  	
  Issuance of Additional Notes

  	
  37

  
	
  Section
  2.14.

  	
  Persons Deemed Owners

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 REDEMPTION AND PREPAYMENT

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section
  3.01.

  	
  Notices to Trustee

  	
  38

  
	
  Section
  3.02.

  	
  Selection of Notes to Be Redeemed

  	
  38

  
	
  Section
  3.03.

  	
  Notice of Redemption

  	
  39

  
	
  Section
  3.04.

  	
  Effect of Notice of Redemption

  	
  40

  
	
  Section
  3.05.

  	
  Deposit of Redemption Price

  	
  40

  
	
  Section
  3.06.

  	
  Notes Redeemed in Part

  	
  40

  
	
  Section
  3.07.

  	
  Optional Redemption

  	
  40

  
	
  Section
  3.08.

  	
  Mandatory Redemption

  	
  41

  
	
  Section
  3.09.

  	
  Offer to Purchase by Application of Excess Proceeds

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 COVENANTS

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section
  4.01.

  	
  Payment of Notes

  	
  43

  
	
  Section
  4.02.

  	
  Maintenance of Office or Agency

  	
  44

  
	
  Section
  4.03.

  	
  Reports

  	
  44

  
	
  Section
  4.04.

  	
  Compliance Certificate

  	
  45

  
	
  Section
  4.05.

  	
  Taxes

  	
  46

  
	
  Section
  4.06.

  	
  Stay, Extension and Usury Laws

  	
  46

  
	
  Section
  4.07.

  	
  Limitation on Restricted Payments

  	
  46

  

 

ii

 

	
  Section
  4.08.

  	
  Limitation on Dividend and Other Payment Restrictions Affecting
  Subsidiaries

  	
  50

  
	
  Section
  4.09.

  	
  Limitation on Incurrence of Indebtedness and Issuance of Preferred
  Stock

  	
  52

  
	
  Section
  4.10.

  	
  Limitation on Asset Sales

  	
  56

  
	
  Section
  4.11.

  	
  Limitation on Transactions with Affiliates

  	
  58

  
	
  Section
  4.12.

  	
  Limitation on Liens

  	
  59

  
	
  Section
  4.13.

  	
  Additional Subsidiary Guarantees

  	
  60

  
	
  Section
  4.14.

  	
  Existence

  	
  60

  
	
  Section
  4.15.

  	
  Offer to Repurchase Upon Change of Control

  	
  61

  
	
  Section
  4.16.

  	
  No Partial Inducements

  	
  63

  
	
  Section
  4.17.

  	
  Limitations on Finance Corp. Activities

  	
  63

  
	
  Section
  4.18.

  	
  Designation of Restricted and Unrestricted Subsidiaries

  	
  63

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 SUCCESSORS

  	
  64

  
	
   

  	
   

  	
   

  
	
  Section
  5.01.

  	
  Merger, Consolidation, or Sale of Assets

  	
  64

  
	
  Section
  5.02.

  	
  Successor Substituted

  	
  66

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 DEFAULTS AND REMEDIES

  	
  66

  
	
   

  	
   

  	
   

  
	
  Section
  6.01.

  	
  Events of Default

  	
  66

  
	
  Section
  6.02.

  	
  Acceleration

  	
  68

  
	
  Section
  6.03.

  	
  Other Remedies

  	
  69

  
	
  Section
  6.04.

  	
  Waiver of Past Defaults

  	
  69

  
	
  Section
  6.05.

  	
  Control by Majority

  	
  69

  
	
  Section
  6.06.

  	
  Limitation on Suits

  	
  70

  
	
  Section
  6.07.

  	
  Rights of Holders of Notes to Receive Payment

  	
  70

  
	
  Section
  6.08.

  	
  Collection Suit by Trustee

  	
  70

  
	
  Section
  6.09.

  	
  Trustee is Authorized to File Proofs of Claim

  	
  71

  
	
  Section
  6.10.

  	
  Priorities

  	
  71

  
	
  Section
  6.11.

  	
  Undertaking for Costs

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 TRUSTEE

  	
  72

  
	
   

  	
   

  	
   

  
	
  Section
  7.01.

  	
  Duties of Trustee

  	
  72

  
	
  Section
  7.02.

  	
  Rights of Trustee

  	
  73

  
	
  Section
  7.03.

  	
  Individual Rights of Trustee

  	
  74

  
	
  Section
  7.04.

  	
  Trustee’s Disclaimer

  	
  74

  
	
  Section
  7.05.

  	
  Notice of Defaults

  	
  75

  
	
  Section
  7.06.

  	
  Reports by Trustee to Holders of the Notes

  	
  75

  
	
  Section
  7.07.

  	
  Compensation and Indemnity

  	
  75

  
	
  Section
  7.08.

  	
  Replacement of Trustee

  	
  76

  
	
  Section
  7.09.

  	
  Successor Trustee by Merger, etc.

  	
  77

  
	
  Section
  7.10.

  	
  Eligibility; Disqualification

  	
  77

  
	
  Section
  7.11.

  	
  Preferential Collection of Claims Against Issuers

  	
  78

  

 

iii

 

	
  ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section
  8.01.

  	
  Option to Effect Legal Defeasance or Covenant Defeasance

  	
  78

  
	
  Section
  8.02.

  	
  Legal Defeasance and Discharge

  	
  78

  
	
  Section
  8.03.

  	
  Covenant Defeasance

  	
  79

  
	
  Section
  8.04.

  	
  Conditions to Legal or Covenant Defeasance

  	
  79

  
	
  Section
  8.05.

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

  	
  80

  
	
  Section
  8.06.

  	
  Repayment to Issuers

  	
  81

  
	
  Section
  8.07.

  	
  Reinstatement

  	
  81

  
	
  Section
  8.08.

  	
  Discharge

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

  	
  83

  
	
   

  	
   

  	
   

  
	
  Section
  9.01.

  	
  Without Consent of Holders of Notes

  	
  83

  
	
  Section
  9.02.

  	
  With Consent of Holders of Notes

  	
  84

  
	
  Section
  9.03.

  	
  Compliance with Trust Indenture Act

  	
  85

  
	
  Section
  9.04.

  	
  Revocation and Effect of Consents

  	
  85

  
	
  Section
  9.05.

  	
  Notation on or Exchange of Notes

  	
  86

  
	
  Section
  9.06.

  	
  Trustee to Sign Amendments, etc.

  	
  86

  
	
  Section
  9.07.

  	
  Acts of Holders

  	
  86

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 GUARANTEES OF NOTES

  	
  87

  
	
   

  	
   

  	
   

  
	
  Section
  10.01.

  	
  Subsidiary Guarantees

  	
  87

  
	
  Section
  10.02.

  	
  Guarantors May Consolidate, etc., on Certain Terms

  	
  88

  
	
  Section
  10.03.

  	
  Releases of Subsidiary Guarantees

  	
  89

  
	
  Section
  10.04.

  	
  Limitation on Guarantor Liability

  	
  90

  
	
  Section
  10.05.

  	
  “Trustee” to Include Paying Agent

  	
  90

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 MISCELLANEOUS

  	
  90

  
	
   

  	
   

  	
   

  
	
  Section
  11.01.

  	
  Trust Indenture Act Controls

  	
  90

  
	
  Section
  11.02.

  	
  Notices

  	
  90

  
	
  Section
  11.03.

  	
  Communication by Holders of Notes with Other Holders of Notes

  	
  92

  
	
  Section
  11.04.

  	
  Certificate and Opinion as to Conditions Precedent

  	
  92

  
	
  Section
  11.05.

  	
  Statements Required in Certificate or Opinion

  	
  92

  
	
  Section
  11.06.

  	
  Rules by Trustee and Agents

  	
  93

  
	
  Section
  11.07.

  	
  No Personal Liability of Directors, Officers, Employees and
  Unitholders

  	
  93

  
	
  Section
  11.08.

  	
  Governing Law

  	
  93

  
	
  Section
  11.09.

  	
  No Adverse Interpretation of Other Agreements

  	
  93

  
	
  Section
  11.10.

  	
  Successors

  	
  94

  
	
  Section
  11.11.

  	
  Severability

  	
  94

  
	
  Section
  11.12.

  	
  Table of Contents, Headings, etc.

  	
  94

  
	
  Section
  11.13.

  	
  Counterparts

  	
  94

  
	
  Section
  11.14.

  	
  Benefits of Indenture

  	
  94

  
	
  Section
  11.15.

  	
  Language of Notices, Etc.

  	
  94

  

 

iv

 

	
  APPENDIX AND ANNEXES

  
	
   

  	
   

  	
   

  
	
  RULE 144A/REGULATION S APPENDIX

  	
  App. - 1

  
	
   

  	
   

  
	
  EXHIBIT 1

  	
  Form of Initial Note

  	
   

  
	
  EXHIBIT 2

  	
  Form of Exchange Note or Private Exchange Note

  	
   

  
	
   

  	
   

  	
   

  
	
  ANNEX A

  	
  Form of Supplemental Indenture

  	
  A - 1

  
	
   

  	
   

  	
   

  
	
  ANNEX B

  	
  Form of Registration Rights Agreement

  	
  B - 1

  

 

v

 

This INDENTURE, dated
as of June 27, 2008 is among LINN ENERGY, LLC, a Delaware limited liability
company (the “Company”), LINN ENERGY FINANCE CORP., a Delaware corporation (“Finance
Corp.” and, together with the Company, the “Issuers”), the guarantors listed on
the signature page hereof (each, a “Guarantor” and, collectively, the “Guarantors”)
and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee
(the “Trustee”).

 

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

 

ARTICLE 1

DEFINITIONS AND INCORPORATION 

BY REFERENCE

 

Section 1.01.          Definitions.

 

“Additional
Assets” means:

 

(1)           any assets used or useful in the Oil
and Gas Business, other than Indebtedness or Capital Stock;

 

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

 

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

 

provided, however, that any such
Restricted Subsidiary described in clause (2) or (3) is primarily
engaged in the Oil and Gas Business.

 

“Additional Interest” means all Additional
Interest then owing pursuant to Section 5 of the Registration Rights
Agreement referred to in clause (1) of the definition of “Registration
Rights Agreement” in the Appendix. 
Unless the context indicates otherwise, all references to “interest” in
this Indenture or the Notes shall be deemed to include any Additional Interest.

 

“Additional Notes” means, subject to the
Company’s compliance with Section 4.09, 97/8% Senior Notes due 2018 issued from
time to time after the Initial Issuance Date under the terms of this Indenture
(other than pursuant to Section 2.06, 2.07, 2.09, 3.06, 4.10, 4.15 or 9.05
of this Indenture or Sections 2.3 or 2.4 of the Appendix and other than
Exchange Notes or Private Exchange Notes issued pursuant to an exchange offer
for Initial Notes outstanding under this Indenture).

 

“Adjusted
Consolidated Net Tangible Assets” of a specified Person means
(without duplication), as of the date of determination:

 

 

(1)           the sum of:

 

(a)           discounted future net revenue from
proved crude oil and natural gas reserves of such Person and its Restricted
Subsidiaries calculated in accordance with SEC guidelines before any state or
federal or other income taxes, as estimated by the Company in a reserve report
prepared as of the end of the fiscal year of such Person for which audited
financial statements are available, as increased by, as of the date of
determination, the estimated discounted future net revenue from:

 

(i)            estimated proved crude oil and
natural gas reserves of such Person and its Restricted Subsidiaries attributable
to acquisitions consummated since the date of such reserve report, which
reserves were not reflected in such reserve report, and

 

(ii)           estimated crude oil and natural gas
reserves of such Person and its Restricted Subsidiaries attributable to extensions,
discoveries and other additions and upward revisions of estimates of proved
crude oil and natural gas reserves (including previously estimated development
costs incurred during the period and the accretion of discount since the prior
period end) due to exploration, development or exploitation, production or
other activities which would, in accordance with standard industry practice,
cause such revisions, in the case of clauses (i) and (ii) 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 revenue attributable to:

 

(A)          estimated proved crude oil and natural
gas reserves of such Person and its Restricted Subsidiaries reflected in such
reserve report produced or disposed of since the date of such reserve report,
and

 

(B)           reductions in the estimated crude oil
and natural gas reserves of such Person and its Restricted Subsidiaries reflected
in such reserve report since the date of such reserve report due to changes in
geological conditions or other factors which would, in accordance with standard
industry practice, cause such revisions, in the case of clauses (A) and (B) calculated
in accordance with SEC guidelines (utilizing the prices for the fiscal quarter
ending prior to the date of determination);

 

provided, however, that, in the case of each
of the determinations made pursuant to clauses (i), (ii), (A) and (B) above,
such increases and decreases shall be estimated by the Company’s petroleum
engineers;

 

(b)           the capitalized costs that are
attributable to crude oil and natural gas properties of such Person and its
Restricted Subsidiaries to which no proved crude oil and natural gas reserves
are attributable, based on such Person’s books 

 

2

 

and records as
of a date no earlier than the date of such Person’s latest available annual or
quarterly financial statements;

 

(c)           the Net Working Capital of such
Person as of a date no earlier than the date of such Person’s latest available
annual or quarterly financial statements; and

 

(d)           the greater of:

 

(i)            the net book value of other tangible
assets of such Person and its Restricted Subsidiaries as of a date no earlier
than the date of such Person’s latest available annual or quarterly financial
statements, and

 

(ii)           the appraised value, as estimated by
independent appraisers, of other tangible assets of such Person and its
Restricted Subsidiaries as of a date no earlier than the date of such Person’s
latest available annual or quarterly financial statements (provided that such
Person shall not be required to obtain such an appraisal of such assets if no
such appraisal has been performed);

 

minus

 

(2)           the sum of:

 

(a)           Minority Interests;

 

(b)           to the extent not otherwise taken
into account in determining Adjusted Consolidated Net Tangible Assets, any net
natural gas balancing liabilities of such Person and its Restricted
Subsidiaries reflected in such Person’s latest audited financial statements;

 

(c)           to the extent included in clause (1)(a) above,
the discounted future net revenue, calculated in accordance with SEC guidelines
(utilizing the prices utilized in such Person’s year end reserve report),
attributable to reserves subject to participation interests, overriding royalty
interests or other interests of third parties, pursuant to participation,
partnership, vendor financing or other agreements then in effect, or which
otherwise are required to be delivered to third parties;

 

(d)           to the extent included in clause (1)(a) above,
the discounted future net revenue calculated in accordance with SEC guidelines
(utilizing the prices utilized in such Person’s year end reserve report),
attributable to reserves that are required to be delivered to third parties to
fully satisfy the obligations of such Person and its Restricted Subsidiaries
with respect to Volumetric Production Payments on the schedules specified with
respect thereto; and

 

(e)           the discounted future net revenue,
calculated in accordance with SEC guidelines, attributable to reserves subject
to Dollar-Denominated

 

3

 

Production
Payments that, based on the estimates of production and price assumptions
included in determining the discounted future net revenue specified in clause
(1)(a) above, would be necessary to satisfy fully the obligations of such
Person and its Restricted Subsidiaries with respect to Dollar-Denominated
Production Payments on the schedules specified with respect thereto.

 

If the Company changes its method of accounting
from the full cost method to the successful efforts method or a similar method
of accounting, “Adjusted Consolidated Net Tangible Assets” of the Company 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 purposes of this definition,
“control,” as used with respect to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.

 

“Agent” means
any Registrar or Paying Agent.

 

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

 

“Applicable Procedures”
of a Depository means, with respect to any matter at any time, the policies and
procedures of such Depository, if any, that are applicable to such matter at
such time.

 

“Asset Sale”
means:

 

(1)           the sale, lease, conveyance or other disposition of any
properties or assets (including by way of a Production Payment or a sale and
leaseback transaction or mergers, consolidations or otherwise); provided,
however, that the disposition of all or substantially all of the properties or
assets of the Company and its Restricted Subsidiaries taken as a whole will not
be an “Asset Sale,” but will be governed by the provisions of Section 4.15
and/or the provisions of Section 5.01 and not by the provisions of Section 4.10;
and

 

(2)           the issuance of Equity Interests in any of the Company’s
Restricted Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries.

 

Notwithstanding the preceding, the following items will not
be deemed to be Asset Sales:

 

(1)           any single transaction or series of related transactions that
involves properties or assets having a fair market value of less than $10.0
million;

 

4

 

(2)           a disposition of assets between or among any of the Company
and its Restricted Subsidiaries,

 

(3)           an issuance or sale of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;

 

(4)           any disposition of equipment, inventory, products, accounts
receivable or other properties or assets in the ordinary course of business;

 

(5)           the disposition of cash or Cash Equivalents, Hedging
Contracts or other financial instruments in the ordinary course of business;

 

(6)           a Restricted Payment that is permitted by Section 4.07
or a Permitted Investment;

 

(7)           the farm-out, lease or sublease of developed or undeveloped
crude oil or natural gas properties owned or held by the Company or any
Restricted Subsidiary in the ordinary course of business or in exchange for
crude oil and natural gas properties owned or held by another Person;

 

(8)           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 cash received must be applied in accordance with
the provisions of Section 4.10;

 

(9)           the creation or perfection of a Lien (but not, except to the
extent contemplated in clause (10) below, the sale or other disposition of
the properties or assets subject to such Lien);

 

(10)         the creation or perfection of a Permitted Lien and the
exercise by any Person in whose favor a Permitted Lien is granted of any of its
rights in respect of that Permitted Lien;

 

(11)         a surrender or waiver of contract rights or the settlement,
release or surrender of contract, tort or other claims of any kind;

 

(12)         the grant in the ordinary course of business of any
non-exclusive license or sublicense of patents, trademarks, registrations
therefor and other similar intellectual property, including without limitation
licenses of seismic data; and

 

(13) the
disposition of oil and natural gas properties in connection with tax credit
transactions complying with Section 29 of the Internal Revenue Code or any
successor or analogous provisions of the Internal Revenue Code.

 

5

 

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

 

“Available Cash”
has the meaning assigned to such term in the LLC Agreement, as in effect on the
date of this Indenture.

 

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

 

“Beneficial Owner”
has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
under the Exchange Act, except that in calculating the beneficial ownership of
any particular “person” (as that term is used in Section 13(d)(3) of
the Exchange Act), such “person” will be deemed to have beneficial ownership of
all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition.  The terms “Beneficially Owns” and “Beneficially
Owned” have correlative meanings.

 

“Board of Directors”
means:

 

(1)           with respect to Finance Corp., the board of directors of
Finance Corp.;

 

(2)           with respect to the Company, the Board of Directors of the
Company or any authorized committee thereof; and

 

(3)           with respect to any other Person, the board or committee of
such Person serving a similar function.

 

“Board Resolution”
means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the applicable Person to have been duly adopted by the Board of
Directors of such Person 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 Houston, Texas or in New York, New York or another place of
payment are authorized or required by law to close.

 

6

 

“Capital Lease Obligation”
means, at the time any determination is to be made, the amount of the liability
in respect of a capital lease that would at that time be required to be
capitalized on a balance sheet in accordance with GAAP, and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be prepaid
by the lessee without payment of a penalty.

 

“Capital Stock”  means:

 

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

 

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

 

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

 

(4)           any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person,

 

but excluding from all of the foregoing any debt securities
convertible into Capital Stock, regardless of whether such debt securities
include any right of participation with Capital Stock.

 

“Cash Equivalents”  means:

 

(1)           United States dollars;

 

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

 

(3)           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 thereof, having a credit
rating of “A” or better from either S&P or Moody’s;

 

(4)           certificates of deposit, demand deposits and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers’ acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or
better;

 

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

 

7

 

(6)           commercial paper having the highest rating obtainable from
Moody’s or S&P and, in each case, maturing within six months after the date
of acquisition; and

 

(7)           money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (6) of
this definition.

 

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

 

(1)           the direct or indirect sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the properties
or assets (including Capital Stock of the Restricted Subsidiaries) of the
Company and its Restricted Subsidiaries taken as a whole, to any “person” (as
that term is used in Section 13(d)(3) of the Exchange Act);

 

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

 

(3)           the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any “person”
(as that term is used in Section 13(d)(3) of the Exchange Act)
becomes the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company, measured by voting power rather than number of
shares, units or the like; or

 

(4)           the first day on which a majority of the members of the Board
of Directors of the Company are not Continuing Directors.

 

Notwithstanding the preceding, a conversion of the Company or
any of its Restricted Subsidiaries from a limited liability company,
corporation, limited partnership or other form of entity to a limited liability
company, corporation, limited partnership or other form of entity or an
exchange of all of the outstanding Equity Interests in one form of entity for
Equity Interests in another form of entity shall not constitute a Change of
Control, so long as following such conversion or exchange the “persons” (as
that term is used in Section 13(d)(3) of the Exchange Act) who
Beneficially Owned the Capital Stock of the Company immediately prior to such
transactions continue to Beneficially Own in the aggregate more than 50% of the
Voting Stock of such entity, or continue to Beneficially Own sufficient Equity
Interests in such entity to elect a majority of its directors, managers,
trustees or other persons serving in a similar capacity for such entity, and,
in either case no “person” Beneficially Owns more than 50% of the Voting Stock
of such entity.

 

“Clearstream”
means Clearstream Banking, S.A., or any successor securities clearing agency.

 

“Code” means
the Internal Revenue Code of 1986, as amended from time to time, and any successor
statute.

 

8

 

“Consolidated Cash Flow”
means, with respect to any specified Person for any period, the Consolidated
Net Income of such Person for such period plus, without duplication:

 

(1)           an amount equal to any net loss realized by such Person or
any of its Restricted Subsidiaries in connection with an Asset Sale, to the
extent such losses were deducted in computing such Consolidated Net Income;
plus

 

(2)           provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus

 

(3)           the Fixed Charges of such Person and its Restricted
Subsidiaries for such period, to the extent that such Fixed Charges were
deducted in computing such Consolidated Net Income; plus

 

(4)           depreciation, depletion, amortization (including amortization
of intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period), impairment and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation, depletion,
amortization, impairment and other non-cash expenses were deducted in computing
such Consolidated Net Income; plus

 

(5)           unrealized non-cash losses resulting from foreign currency
balance sheet adjustments required by GAAP to the extent such losses were
deducted in computing such Consolidated Net Income; minus

 

(6)           non-cash items increasing such Consolidated Net Income for
such period, other than items that were accrued in the ordinary course of
business; and minus

 

(7)           to the extent increasing such
Consolidated Net Income for such period, the sum of (a) the amount of
deferred revenues that are amortized during such period and are attributable to
reserves that are subject to Volumetric Production Payments and (b) amounts
recorded in accordance with GAAP as repayments of principal and interest
pursuant to Dollar-Denominated Production Payments;

 

in each case, on a consolidated basis and determined in
accordance with GAAP.

 

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

 

(1)           the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included, but only to the extent of the amount of dividends
or distributions paid in cash to the specified Person or a Restricted
Subsidiary of the Person;

 

9

 

(2)           the Net Income of any Restricted Subsidiary will be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, partners or members;

 

(3)           the cumulative effect of a change in accounting principles
will be excluded;

 

(4)           any gain (loss) realized upon the sale or other disposition
of any property, plant or equipment of such Person or its consolidated
Restricted Subsidiaries (including pursuant to any sale or 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 will be excluded;

 

(5)           any asset impairment writedowns on oil and gas properties
under GAAP or SEC guidelines will be excluded;

 

(6)           unrealized losses and gains under Hedging Contracts included
in the determination of Consolidated Net Income, including, without limitation
those resulting from the application of Statement of Financial Accounting
Standards No. 133 will be excluded;

 

(7)           to the extent deducted in the calculation of Net Income, any
non-cash or nonrecurring charges relating to any premium or penalty paid, write
off of deferred financing costs or other financial recapitalization charges in
connection with redeeming or retiring any Indebtedness prior to its Stated
Maturity will be excluded;

 

(8)           items classified as extraordinary or nonrecurring gains and
losses (less all fees and expenses related thereto) and the related tax
effects, in each case according to GAAP, will be excluded; and

 

(9)           income resulting from transfers of assets (other than cash)
between such Person or any of its Restricted Subsidiaries, on the one hand, and
an Unrestricted Subsidiary of such Person, on the other hand, will be excluded.

 

“Consolidated Net Worth”
means, with respect to any specified Person as of any date, the sum of:

 

(1)           the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date; plus

 

(2)           the respective amounts reported on such Person’s balance
sheet as of such date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and 

 

10

 

payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock.

 

“Continuing Directors”
means, as of any date of determination, any member of the Board of Directors of
the Company who:

 

(1)           was a member of such Board of Directors on the date of this
Indenture; or

 

(2)           was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.

 

“Corporate Trust Office of
the Trustee” means the office of the Trustee in the City of New York
at which at any time its corporate trust business shall be administered, which
office at the date hereof is located at 100 Wall Street, Suite 1600, New
York, New York 10005, Attn: Corporate Trust Department, or such other address
in the City of New York as the Trustee may designate from time to time by
notice to the Holders and the Issuers, or the principal corporate trust office
in the City of New York of any successor Trustee (or such other address as a
successor Trustee may designate from time to time by notice to the Holders and
the Issuers).

 

“Credit Agreement”
means that certain Third Amended and Restated Credit Agreement, dated as of August 31,
2007, among the Company, BNP Paribas, as Administrative Agent, and the other
lenders party thereto, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, in each case as
amended, restated, modified, renewed, refunded, replaced or refinanced from
time to time.

 

“Credit Facilities”
means one or more debt facilities (including, without limitation, the Credit
Agreement), commercial paper facilities or Debt Issuances, in each case with
banks or other institutional lenders or institutional investors providing for
revolving credit loans, term loans, receivables financing (including through
the sale of receivables to such lenders or to special purpose entities formed
to borrow from such lenders against such receivables), letters of credit or
other borrowings or Debt Issuances, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced (including refinancing with
any capital markets transaction) in whole or in part from time to time.

 

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

 

“date of this Indenture”
means June 27, 2008.

 

“Debt Issuance”
means, with respect to the Company or any of its Restricted
Subsidiaries, one or more issuances after the date of this Indenture of
Indebtedness evidenced by notes, debentures, bonds or other similar securities
or instruments.

 

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

 

“Depository”
has the meaning provided in the Appendix.

 

11

 

“Disqualified Stock”
means any Capital Stock that, by its terms (or by the terms of any security
into which it is convertible, or for which it is exchangeable, in each case at
the option of the holder of the Capital Stock), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder of the
Capital Stock, in whole or in part, on or prior to the date that is 91 days
after the final stated maturity date of the Notes.  Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require the Company to
repurchase or redeem such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 4.07. The amount (or principal amount) of
Disqualified Stock deemed to be outstanding at any time for purposes of this
Indenture will be the maximum amount that the Company and its Restricted
Subsidiaries may become obligated to pay upon the maturity of, or pursuant to
any mandatory redemption provisions of, such Disqualified Stock, exclusive of
accrued dividends.

 

“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 of the Company that was
formed under the laws of the United States or any state of the United States or
the District of Columbia.

 

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

 

“Equity Offering”
means any public or private sale of Capital Stock (other than Disqualified
Stock) made for cash on a primary basis by the Company after the date of this
Indenture.

 

“Equity
Repurchase” means the
repurchase or other acquisition or retirement for value of any Equity Interests
of the Company pursuant to any stock repurchase plan of the Company approved by
the Board of Directors of the Company and effected in accordance with Rule 10b-18
under the Securities Exchange Act of 1934, as amended, or otherwise in
accordance with Applicable Law.

 

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

 

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

 

“Exchange Notes”
has the meaning specified in the Appendix.

 

“Existing Immaterial
Subsidiaries” means, collectively, Linn Western
Processing, LLC, Linn Western Operating, Inc., Penn West Storage, LLC, Big
Creek Pipeline Limited Liability Company, Marathon 85-II Limited Partnership
and Marathon 85-III Limited Partnership.

 

12

 

“Existing Indebtedness”
means the aggregate principal amount of Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement and
intercompany Indebtedness) in existence on the date of this Indenture, until
such amounts are repaid.

 

“Fixed Charge Coverage
Ratio” means with respect to any specified Person for any
four-quarter reference period, the ratio of the Consolidated Cash Flow of such
Person for such period to the Fixed Charges of such Person for such
period.  In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, guarantees,
repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness
(other than ordinary working capital borrowings) or issues, repurchases or
redeems preferred stock subsequent to the commencement of the applicable
four-quarter reference period and on or prior to the date on which the event
for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation
Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro
forma effect to such incurrence, assumption, guarantee, repayment, repurchase,
redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase
or redemption of preferred stock, and the use of the proceeds therefrom, as if
the same had occurred at the beginning of the applicable four-quarter reference
period.

 

In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:

 

(1)           acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers, consolidations
or otherwise (including acquisitions of assets used or useful in the Oil and
Gas Business), or any Person or any of its Restricted Subsidiaries acquired by
the specified Person or any of its Restricted Subsidiaries, and including in
each case any related financing transactions and increases in ownership of
Restricted Subsidiaries, during the applicable four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date,
will be given pro forma effect as if they had occurred on the first day of the
four-quarter reference period, and the Consolidated Cash Flow for such
reference period will be calculated giving pro forma effect to any expense and
cost reductions that have occurred or are reasonably expected to occur, in the
reasonable judgment of the chief financial or accounting officer of the Company
(regardless of whether those cost savings or operating improvements could then
be reflected in pro forma financial statements in accordance with Regulation
S-X promulgated under the Securities Act or any other regulation or policy of
the SEC related thereto);

 

(2)           the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
(and ownership interests therein) disposed of prior to the Calculation Date,
will be excluded;

 

(3)           the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses (and ownership
interests therein) disposed of prior to the Calculation Date, will be excluded,
but only to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its Restricted
Subsidiaries following the Calculation Date;

 

13

 

(4)           any Person that is a Restricted Subsidiary of the specified
Person on the Calculation Date will be deemed to have been a Restricted
Subsidiary of the specified Person at all times during such four-quarter
period;

 

(5)           any Person that is not a Restricted Subsidiary of the
specified Person on the Calculation Date will be deemed not to have been a
Restricted Subsidiary of the specified Person at any time during such
four-quarter period; and

 

(6)           if any Indebtedness bears a floating rate of interest, the interest
expense on such Indebtedness will be calculated as if the rate in effect on the
Calculation Date had been the applicable rate for the entire period (taking
into account any obligations arising under any Hedging Contract applicable to
such Indebtedness if such Hedging Contract has a remaining term as at the
Calculation Date in excess of 12 months).

 

“Fixed Charges”
means, with respect to any specified Person for any period, the sum, without
duplication, of:

 

(1)           the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued (excluding any
interest attributable to Dollar-Denominated Production Payments but including,
without limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers’ acceptance financings), and net of the effect of all
payments made or received pursuant to interest rate Hedging Contracts; plus

 

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

 

(3)           any interest expense on Indebtedness of another Person that
is guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such guarantee or Lien is called upon; plus

 

(4)           all dividends on any series of preferred securities of such
Person or any of its Restricted Subsidiaries, whether paid or accrued and
whether or not in cash, other than dividends on Equity Interests payable solely
in Equity Interests of the Company (other than Disqualified Stock) or to the
Company or a Restricted Subsidiary of the Company,

 

in each case, on a consolidated basis and in accordance with
GAAP.

 

“GAAP” means
generally accepted accounting principles in the United States, which are in
effect on the date of this Indenture.

 

“Global Note”
has the meaning provided in the Appendix.

 

14

 

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

 

The term “guarantee”
means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any
manner including, without limitation, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness or 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).  When used as a verb, “guarantee” has a
correlative meaning.

 

“Guarantors”
means each of (a) the Restricted Subsidiaries of the Company, other than
Finance Corp. and the Existing Immaterial Subsidiaries, executing this
Indenture as initial Guarantors, (b) any other Restricted Subsidiary of
the Company that executes a supplement to this Indenture in accordance with Section 4.13
or 10.02 hereof and (c) the respective successors and assigns of such
Restricted Subsidiaries in each case until such time as any such Restricted
Subsidiary shall be released and relieved of its obligations pursuant to Section 4.13,
8.02, 8.03 or 10.04 hereof.

 

“Hedging Contracts”
means, with respect to any specified Person:

 

(1)           interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements entered into with one of more financial
institutions and designed to protect the Person or any of its Restricted
Subsidiaries entering into the agreement against fluctuations in interest
rates, or to otherwise reduce the cost of borrowing of such Person or any of
such Restricted Subsidiaries, with respect to Indebtedness incurred;

 

(2)           foreign exchange contracts and currency protection agreements
entered into with one of more financial institutions and designed to protect the
Person or any of its Restricted Subsidiaries entering into the agreement
against fluctuations in currency exchanges rates with respect to Indebtedness
incurred;

 

(3)           any commodity futures contract, commodity swap, commodity
option, commodity forward sale or other similar agreement or arrangement
designed to protect against fluctuations in the price of Hydrocarbons used,
produced, processed or sold by that Person or any of its Restricted
Subsidiaries at the time; and

 

(4)           other agreements or arrangements designed to protect such
Person or any of its Restricted Subsidiaries against fluctuations in interest
rates, commodity prices or currency exchange rates,

 

and in each case are entered into only in the normal course
of business and not for speculative purposes.

 

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

 

15

 

“Hydrocarbons”
means crude oil, natural gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
constituents, elements or compounds thereof and products refined or processed
therefrom.

 

“Indebtedness”
means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent:

 

(1)           in respect of borrowed money;

 

(2)           evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof);

 

(3)           in respect of bankers’ acceptances;

 

(4)           representing Capital Lease Obligations or Attributable Debt
in respect of sale and leaseback transactions;

 

(5)           representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable; or

 

(6)           representing any obligations under Hedging Contracts,

 

if and to the extent any of the preceding items (other than
letters of credit and obligations under Hedging Contracts) would appear as a
liability upon a balance sheet of the specified Person prepared in accordance
with GAAP.  In addition, the term “Indebtedness”
includes all Indebtedness of other Persons secured by a Lien on any asset of
the specified Person, whether or not such Indebtedness is assumed by the
specified Person (provided 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
Person), and, to the extent not otherwise included, the guarantee by the
specified Person of any Indebtedness of any other Person (including, with
respect to any Production Payment, any warranties or guarantees of production
or payment by such Person with respect to such Production Payment, but
excluding other contractual obligations of such Person with respect to such
Production Payment).

 

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

 

(i)    any
indebtedness which has been defeased in accordance with GAAP or defeased
pursuant to the deposit of cash or Cash Equivalents (in an amount sufficient to
satisfy all such indebtedness obligations at maturity or redemption, as
applicable, and all payments of interest and premium, if any) in a trust or
account created or pledged for the sole benefit of the holders of such indebtedness,
and subject to no other Liens, and the other applicable terms of the instrument
governing such indebtedness;

 

(ii)   any
obligation of a Person in respect of a farm-in agreement or similar arrangement
whereby such Person agrees to pay all or a share of the drilling, completion or
other expenses of an exploratory or development well (which agreement may be
subject to a maximum payment obligation, after which expenses are shared in
accordance with the working or participation interest therein or in accordance
with the agreement of 

 

16

 

the parties) or perform the drilling, completion or other
operation on such well in exchange for an ownership interest in an oil or gas
property; and

 

(iii) any obligations arising from agreements of a
Person providing for indemnification, guarantees, adjustment of purchase price,
holdbacks, contingent payment obligations based on a final financial statement
or performance of acquired or disposed of assets or similar obligations (other
than guarantees of Indebtedness), in each case, incurred or assumed by such
Person in connection with the acquisition or disposition of assets (including
through mergers, consolidations or otherwise).

 

The amount (or principal amount) of any Indebtedness
outstanding as of any date will be:

 

(1)           the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;

 

(2)           in the case of obligations under any Hedging Contracts, the
termination value of the agreement or arrangement giving rise to such
obligations that would be payable by such Person at such date; and

 

(3)           the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the case of
any other Indebtedness.

 

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.

 

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

 

“Initial Issuance Date”
means June 27, 2008.

 

“Initial Notes”
has the meaning provided in the Appendix.

 

“Initial Purchasers”
has the meaning provided in the Appendix.

 

“Investments”
means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the forms of loans, advances
or extensions of credit (including guarantees or similar arrangements, but
excluding (1) commission, travel and similar advances to officers and
employees made in the ordinary course of business and (2) advances to
customers in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of the lender), or capital contributions or
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities (excluding any interest in a crude oil or natural
gas leasehold to the extent constituting a security under applicable law),
together with all items that are or would be classified as investments on a
balance sheet of such Person prepared in accordance with GAAP.  If the Company or any Restricted Subsidiary
of the Company sells or otherwise disposes of any Equity Interests of any
direct or indirect Restricted Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Restricted
Subsidiary of the Company, the 

 

17

 

Company will be deemed to have made an Investment on the date
of any such sale or disposition in an amount equal to the fair market value of
the Equity Interests of such Restricted Subsidiary not sold or disposed of in
an amount determined as provided in the final paragraph of Section 4.07.  The acquisition by the Company or any
Subsidiary of the Company of a Person that holds an Investment in a third
Person will be deemed to be an Investment made by the Company or such Subsidiary
in such third Person in an amount equal to the fair market value of the
Investment held by the acquired Person in such third Person on the date of any
such acquisition in an amount determined as provided in the final paragraph of Section 4.07.  Except as otherwise provided in this
Indenture, the amount of an Investment will be determined at the time the
Investment is made and without giving effect to subsequent changes in value or
write-ups, write-downs or write-offs with respect to such Investment.

 

“Joint
Venture” means any
Person that is not a direct or indirect Subsidiary of the Company in which the
Company or any of its Restricted Subsidiaries makes any Investment.

 

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

 

“LLC Agreement”
means the Second Amended and Restated Limited Liability Company Agreement of
Linn Energy, LLC, dated as of January 19, 2006, as in effect on the date
of this Indenture and as such may be further amended, modified or supplemented
from time to time.

 

“Make
Whole Premium” means,
with respect to a Note at any time, the excess, if any, of (a) the present
value at such time of (i) the redemption price of such Note at July 1,
2013 pursuant to Section 3.07(a) plus (ii) any required interest
payments due on such Note through July 1, 2013 (except for currently
accrued and unpaid interest), computed using a discount rate equal to the
Treasury Rate at such time plus 50 basis points, discounted to the redemption
date on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months), over (b) the principal amount of such Note.

 

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

 

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

 

“Net Income”
means, with respect to any specified Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of preferred stock dividends, excluding, however:

 

(1)           any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection with: (a) any
Asset Sale; or (b) the 

 

18

 

disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and

 

(2)           any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).

 

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

 

(1)           the direct costs relating to such Asset Sale, including,
without limitation, legal, accounting and investment banking fees, title and
recording tax expenses and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale,

 

(2)           taxes paid or payable or required to be accrued as a
liability under GAAP as a result of the Asset Sale, in each case, after taking
into account any available tax credits or deductions and any tax sharing
arrangements,

 

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

 

(4)           all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries or joint ventures as a
result of such Asset Sale, and

 

(5)           any amounts to be set aside in any reserve established in
accordance with GAAP or any amount placed in escrow, in either case for
adjustment in respect of the sale price of such properties or assets or for
liabilities associated with such Asset Sale and retained by the Company or any
of its Restricted Subsidiaries until such time as such reserve is reversed or
such escrow arrangement is terminated, in which case Net Proceeds shall include
only the amount of the reserve so reversed or the amount returned to the
Company or its Restricted Subsidiaries from such escrow arrangement, as the
case may be.

 

“Net Working Capital” means (a) all
current assets of the Company and its Restricted Subsidiaries except current
assets from commodity price risk management activities arising in the ordinary
course of business, less (b) all current liabilities of the Company and
its Restricted Subsidiaries, except current liabilities included in
Indebtedness and any current liabilities from commodity price risk management
activities arising in the ordinary course of business, in each case as set
forth in the consolidated financial statements of the Company prepared in
accordance with GAAP (excluding any adjustments made pursuant to FAS 133).

 

19

 

“Non-Recourse Debt”
means Indebtedness:

 

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

 

(2)           no default with respect to which (including any rights that
the holders of the Indebtedness 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 (other than the Notes) of the Company or any
of its Restricted Subsidiaries to declare a default on such other Indebtedness
or cause the payment of the Indebtedness to be accelerated or payable prior to
its Stated Maturity; and

 

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

 

For purposes of determining compliance with Section 4.09,
in the event that any Non-Recourse Debt of any of the Company’s Unrestricted
Subsidiaries ceases to be Non-Recourse Debt of such Unrestricted Subsidiary,
such event will be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company.

 

“Notes” has the
meaning specified in the Appendix.

 

“Notes Custodian”
has the meaning specified in the Appendix.

 

“Obligations”
means any principal, interest (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization, whether or not a
claim for post-filing interest is allowed in such proceeding), premium, if any,
penalties, fees, charges, expenses, indemnifications, reimbursement
obligations, damages, guarantees, and other liabilities or amounts payable
under the documentation governing any Indebtedness or in respect thereto.

 

“Offering Memorandum”
means the offering memorandum of the Issuers dated June 24, 2008 relating
to the offering of the Initial Notes.

 

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

 

“Officers’ Certificate”
means a certificate signed on behalf of each of the Company and Finance Corp.
by two of its Officers, one of whom must be the principal executive officer,
the principal financial officer, the treasurer or the principal accounting
officer of the Company or Finance Corp., as the case may be, that meets the
requirements of Section 11.05 hereof.

 

20

 

“Oil and Gas Business”
means:

 

(1) the
acquisition, exploration, development, production, operation and disposition of
interests in oil, gas and other Hydrocarbon properties;

 

(2) the
gathering, marketing, treating, processing (but not refining), storage,
distribution, selling and transporting of any production from such interests or
properties;

 

(3) any
business relating to exploration for or development, production, treatment,
processing (but not refining), storage, transportation or marketing of oil, gas
and other minerals and products produced in association therewith;

 

(4) any
other business that generates gross income that constitutes “qualifying income”
under Section 7704(d) of the Code; and

 

(5) any
activity that is ancillary, complementary or incidental to or necessary or
appropriate for the activities described in clauses (1) through (4) of
this definition.

 

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

 

“Pari Passu Indebtedness”
means, with respect to any Excess Proceeds from Asset Sales, Indebtedness of an
Issuer or any Guarantor that ranks equally in right of payment with the Notes
or the Subsidiary Guarantees, as the case may be, and the terms of which
require the Company or any of its Restricted Subsidiaries to apply such Excess
Proceeds to offer to repurchase such Indebtedness.

 

“Permitted Acquisition Indebtedness”  means Indebtedness or Disqualified Stock
of the Company or any of its Restricted Subsidiaries to the extent such
Indebtedness or Disqualified Stock was Indebtedness or Disqualified Stock of
any other Person existing at the time (a) such Person became a Restricted
Subsidiary of the Company or (b) such Person was merged or consolidated
with or into the Company or any of its Restricted Subsidiaries, provided that
on the date such Person became a Restricted Subsidiary of the Company or the
date such Person was merged or consolidated with or into the Company or any of
its Restricted Subsidiaries, as applicable, either

 

(1)           immediately after giving effect to such transaction on a pro
forma basis as if the same had occurred at the beginning of the applicable
four-quarter period, the Company or such Restricted Subsidiary, as applicable,
would be permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09,

 

(2)           immediately after giving effect to such transaction on a pro
forma basis as if the same had occurred at the beginning of the applicable
four-quarter period, the Fixed Charge Coverage Ratio of the Company would be
equal to or greater than the Fixed Charge Coverage Ratio of the Company
immediately prior to such transaction, or

 

21

 

(3)           immediately after giving effect to such transaction on
a pro forma basis, the Consolidated Net Worth of the Company would be greater
than the Consolidated Net Worth of the Company immediately prior to such
transaction.

 

“Permitted Business
Investments” means Investments made in the ordinary course of, and
of a nature that is or shall have become customary in, the Oil and Gas
Business, including investments or expenditures for actively exploiting,
exploring for, acquiring, developing, producing, processing, gathering,
marketing or transporting Hydrocarbons through agreements, transactions,
interests or arrangements that permit one to share risk 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)           direct
or indirect ownership of crude oil, natural gas, other restricted Hydrocarbon
properties or any interest therein, gathering, transportation, processing,
storage or related systems, or ancillary real property interests and interests
therein; and

 

(2)           the
entry into operating agreements, joint ventures, processing agreements, working
interests, royalty interests, mineral leases, farm-in agreements, farm-out
agreements, development agreements, production sharing agreements, area of
mutual interest agreements, contracts for the sale, transportation or exchange
of crude oil and natural gas and related Hydrocarbons and minerals, unitization
agreements, pooling arrangements, joint bidding agreements, service contracts,
partnership agreements (whether general or limited), or other similar or customary
agreements, transactions, properties, interests or arrangements, and
Investments and expenditures in connection therewith or pursuant thereto, in
each case made or entered into in the ordinary course of the Oil and Gas
Business, excluding, however, Investments in corporations and publicly-traded
limited partnerships.

 

“Permitted
Investments” means:

 

(1)           any
Investment in the Company or in a Restricted Subsidiary of the Company;

 

(2)           any
Investment in cash and Cash Equivalents;

 

(3)           any
Investment by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment:

 

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

 

(b)           such
Person is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its properties or assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company;

 

(4)           any
Investment made as a result of the receipt of non-cash consideration from:

 

22

 

(a)           an
Asset Sale that was made pursuant to and in compliance with Section 4.10;

 

(b)           pursuant
to clause (8) of the items deemed not to be Asset Sales under the
definition of “Asset Sale;”

 

(5)           any
Investment in any Person solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;

 

(6)           any
Investments received in compromise or resolution of, or upon satisfaction of
judgments with respect to, (a) obligations of trade creditors or customers
that were incurred in the ordinary course of business, including pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of any trade creditor or customer, or (b) litigation,
arbitration or other disputes (including pursuant to any bankruptcy or
insolvency proceedings) with Persons who are not Affiliates;

 

(7)           Hedging Contracts;

 

(8)           Guarantees of Indebtedness permitted under Section 4.09;

 

(9)           guarantees by the Company or any of its Restricted
Subsidiaries of operating leases (other than Capital Lease Obligations) or of
other obligations that do not constitute Indebtedness, in each case entered
into by any Restricted Subsidiary of the Company in the ordinary course of
business;

 

(10)         Permitted Business Investments;

 

(11)         Investments that are in existence on the date of this
Indenture;

 

(12)         Investments in any Person to the extent such Investments
consist of prepaid expenses, negotiable instruments held for collection and
lease, utility and workers’ compensation, performance and other similar
deposits made in the ordinary course of business by the Company or any of its
Restricted Subsidiaries;

 

(13)         guarantees of performance or other obligations (other than
Indebtedness) arising in the ordinary course in the Oil and Gas Business,
including obligations under oil and natural gas exploration, development, joint
operating and related agreements and licenses or concessions related to the Oil
and Gas Business;

 

(14)         loans or
advances to officers, directors or employees made in the ordinary course of
business consistent with past practices of the Company or the applicable
Restricted Subsidiary and otherwise in compliance with Section 4.11 of
this Indenture;

 

(15)         Investments of a Restricted Subsidiary acquired after the
date of this Indenture or of any entity merged into or consolidated with the
Company or a Restricted Subsidiary in accordance with Section 5.01 of this
Indenture, the extent that such Investments were not made in contemplation of
or in connection with such acquisition,

 

23

 

merger or consolidation and were in existence on the date of
such acquisition, merger or consolidation;

 

(16)                            Investments received as a result of a foreclosure by, or
other transfer of title to, the Company or any of its Restricted Subsidiaries
with respect to any secured Investment in default; and

 

(17)                            other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (17) that are at the time
outstanding, not to exceed the greater of $50.0 million and 1.0% of the Company’s
Adjusted Consolidated Net Tangible Assets determined at the time of such
Investment.

 

“Permitted Liens”
means:

 

(1)                                  Liens securing any Indebtedness under any of the Credit
Facilities;

 

(2)                                  Liens in favor of the Company or the Guarantors;

 

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

 

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

 

(5)                                  any interest or title of a lessor to the property subject to
a Capital Lease Obligation;

 

(6)                                  Liens on any property or asset acquired, constructed or
improved by the Company or any of its Restricted Subsidiaries, which (a) are
in favor of the seller of such property or assets, in favor of the Person
developing, constructing, repairing or improving such asset or property, or in
favor of the Person that provided the funding for the acquisition, development,
construction, repair or improvement cost, as the case may be, of such asset or
property, (b) are created within 360 days after the acquisition,
development, construction, repair or improvement, (c) secure the purchase
price or development, construction, repair or improvement cost, as the case may
be, of such asset or property in an amount up to 100% of the fair market value
(as determined by the Board of Directors of the Company if such fair market
value is $30.0 million or more) of such acquisition, construction or
improvement of such asset or property, and (d) are limited to the asset or
property so acquired, constructed or improved (including the proceeds thereof,
accessions thereto, upgrades thereof and improvements thereto);

 

(7)                                  Liens existing on the date of this Indenture other than Liens
securing the 

 

24

 

Credit Facilities;

 

(8)                                  Liens to secure the performance of tenders, bids, statutory
obligations, surety or appeal bonds, government contracts, performance bonds or
other obligations of a like nature incurred in the ordinary course of business;

 

(9)                                  Liens on and pledges of the Equity Interests of any
Unrestricted Subsidiary or any Joint Venture owned by the Company or any
Restricted Subsidiary of the Company to the extent securing Non-Recourse Debt
or other Indebtedness of such Unrestricted Subsidiary or Joint Venture;

 

(10)                            Liens in respect of Production Payments and Reserve Sales;

 

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

 

(12)                            Liens arising under operating agreements, joint venture
agreements, partnership agreements, oil and gas leases, farm-out agreements,
farm-in agreements, division orders, contracts for the sale, transportation or
exchange of crude oil and natural gas and related Hydrocarbons and minerals,
unitization and pooling declarations and agreements, area of mutual interest
agreements and other agreements arising in the ordinary course of business of
the Company and its Restricted Subsidiaries that are customary in the Oil and
Gas Business;

 

(13)                            Liens reserved in oil and gas mineral leases for bonus or
rental payments and for compliance with the terms of such leases;

 

(14)                            Liens upon specific items of inventory, receivables or other
goods or proceeds of the Company or any of its Restricted Subsidiaries securing
such Person’s obligations in respect of bankers’ acceptances or receivables
securitizations issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory, receivables or other goods
or proceeds and permitted by Section 4.09;

 

(15)                            Liens securing Obligations of the Issuers or the Guarantors
under the Notes or the Subsidiary Guarantees, as the case may be, and Liens
securing other obligations of the Issuers or the Guarantors under this
Indenture;

 

(16)                            Liens to secure payment and performance of Hedging Contracts
of the Company or any of its Restricted Subsidiaries;

 

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

 

(18)                            landlords’, carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s or like Liens arising by contract or statute in the
ordinary course of business and with respect to amounts which are not yet
delinquent or are being contested in good faith by appropriate proceedings;

 

25

 

(19)                            pledges or deposits made in the ordinary course of business (A) in
connection with leases, tenders, bids, statutory obligations, surety or appeal
bonds, government contracts, performance bonds and similar obligations, or (B) in
connection with workers’ compensation, unemployment insurance and other social
security or similar legislation;

 

(20)                            any attachment or judgment Lien that does not constitute an
Event of Default;

 

(21)                            survey exceptions, easements or reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as
to the use of real property that were not incurred in connection with Indebtedness
and that do not in the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of the business of
the Company or any of its Restricted Subsidiaries;

 

(22)                            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 or deposited 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 of its Restricted Subsidiaries to provide collateral to
the depositary institution;

 

(23)                            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;

 

(24)                            leases
or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries, taken as a whole;

 

(25)                            Liens arising under this Indenture in favor of the trustee
for its own benefit and similar Liens in favor of other trustees, agents and
representatives arising under instruments governing Indebtedness permitted to
be incurred under this Indenture, provided, however, that such Liens are solely
for the benefit of the trustees, agents or representatives in their capacities
as such and not for the benefit of the holders of such Indebtedness;

 

(26)                            Liens arising from the deposit of funds or securities in
trust for the purpose of decreasing or defeasing Indebtedness so long as such
deposit of funds or securities and such decreasing or defeasing of Indebtedness
are permitted under Section 4.07 of this Indenture;

 

(27)                            Liens
(other than Liens securing Indebtedness) on, or related to, assets to secure all or part of the costs incurred in the ordinary
course of the Oil and Gas Business 

 

26

 

for the exploration, drilling, development, production,
processing, transportation, marketing, storage or operation thereof;

 

(28)                            Liens
arising from royalties, overriding royalties, revenue interests, net revenue interests, net profit interests, reversionary
interests, production payments, preferential rights of purchase, working
interests and other similar interests, all as ordinarily exist with respect to
properties and assets of the Company and its Restricted Subsidiaries or
otherwise as are customary in the Oil and Gas Business;

 

(29)                            Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company, provided that, after
giving effect to any such incurrence, the aggregate principal amount of all
Indebtedness then outstanding and secured by any Liens incurred pursuant to
this clause (29) does not exceed the amount set forth in clause (15) of the
second paragraph of Section 4.09 of this Indenture; and

 

(30)                            Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred under this Indenture and incurred to refinance
Indebtedness that was previously so secured, provided that any such Lien is
limited to all or part of the same property or assets (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof) that
secured (or, under the written arrangements under which the original Lien
arose, could secure) the Indebtedness being refinanced or is in respect of
property or assets that is the security for a Permitted Lien hereunder.

 

“Permitted Refinancing
Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries or any Disqualified Stock of the Company incurred or
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease, discharge, refund or otherwise retire for
value, in whole or in part, any other Indebtedness of the Company or any of its
Restricted Subsidiaries (other than intercompany Indebtedness) or any
Disqualified Stock of the Company; provided that:

 

(1)                                  the principal amount, or in the case of Disqualified Stock,
the amount thereof as determined in accordance with the definition of
Disqualified Stock, of such Permitted Refinancing Indebtedness does not exceed
the principal amount of the Indebtedness or amount of the Disqualified Stock
being exchanged, extended, refinanced, renewed, replaced, defeased, discharged,
refunded or retired (plus all accrued and unpaid interest on the Indebtedness
or accrued and unpaid dividends on the Disqualified Stock, as the case may be,
and the amount of all fees, expenses and premiums incurred in connection
therewith);

 

(2)                                  such Permitted Refinancing Indebtedness has a final maturity
date or redemption date, as applicable, later than the final maturity date or
redemption date, as applicable, of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness or Disqualified Stock being exchanged, extended, refinanced,
renewed, replaced, defeased, discharged, refunded or retired;

 

27

 

(3)                                  if the Indebtedness or Disqualified Stock being exchanged,
extended, refinanced, renewed, replaced, defeased, discharged, refunded or
retired is contractually subordinated or otherwise junior in right of payment
to the Notes or the Subsidiary Guarantees, such Permitted Refinancing
Indebtedness is contractually subordinated or otherwise junior in right of
payment to the Notes or the Subsidiary Guarantees on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness or Disqualified Stock being exchanged, extended,
refinanced, renewed, replaced, defeased, discharged, refunded or retired; and

 

(4)                                  such Indebtedness is not incurred (other than by way of a
guarantee) by a Restricted Subsidiary of the Company (other than Finance Corp.)
if the Company is the issuer or other primary obligor on the Indebtedness being
exchanged, extended, refinanced, renewed, replaced, defeased, discharged,
refunded or retired.

 

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

 

“Private
Exchange” has the
meaning provided in the Appendix.

 

“Private Exchange Notes”
has the meaning provided in the Appendix.

 

“Production Payments”
means, collectively, Dollar-Denominated Production Payments and Volumetric
Production Payments.

 

“Production Payments and
Reserve Sales” means the grant or transfer by the Company or a
Restricted Subsidiary of the Company to any Person of a royalty, overriding
royalty, net profits interest, production payment (whether volumetric or dollar
denominated), partnership or other interest in oil and gas properties, reserves
or the right to receive all or a portion of the production or the proceeds from
the sale of production attributable to such properties, including 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 and other providers of technical services to the Company or a
Subsidiary of the Company.

 

“Purchase Agreement”
has the meaning provided in the Appendix.

 

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

 

“Registered Exchange Offer”
has the meaning provided in the Appendix.

 

“Registration Rights
Agreement” has the meaning provided in the Appendix.

 

“Regulation S”
has the meaning provided in the Appendix.

 

“Reporting Default”
means a Default described in Section 6.01(d).

 

28

 

“Responsible Officer,”
when used with respect to the Trustee, means any officer within the corporate
trust department of the Trustee having direct responsibility for the
administration of this Indenture.

 

“Restricted Global Note”
has the meaning provided in the Appendix.

 

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

 

“Restricted Notes Legend”
means the legend set forth in Section 2.3(b)(i) of the Appendix.

 

“Restricted Subsidiary”
of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary.  Notwithstanding
anything in this Indenture to the contrary, Finance Corp. shall be a Restricted
Subsidiary of the Company.

 

“Rule 144A”
has the meaning provided in the Appendix.

 

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

 

“SEC” means the
Securities and Exchange Commission.

 

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

 

“Senior Debt”
means

 

(1)                                  all Indebtedness of the Company or any of its Restricted
Subsidiaries outstanding under Credit Facilities and all obligations under
Hedging Contracts with respect thereto;

 

(2)                                  any other Indebtedness of the Company or any of its
Restricted Subsidiaries permitted to be incurred under the terms of this
Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is subordinated in right of payment to the Notes or
any Subsidiary Guarantee; and

 

(3)                                  all Obligations with respect to the items listed in the
preceding clauses (1) and (2).

 

Notwithstanding anything to the contrary in the preceding
sentence, Senior Debt will not include:

 

(a)                                  any intercompany Indebtedness of the Company or any of its
Restricted Subsidiaries to the Company or any of its Affiliates; or

 

(b)                                 any Indebtedness that is incurred in violation of this
Indenture.

 

For the avoidance of doubt, “Senior Debt” will not include
any trade payables or taxes owed or owing by the Company or any Restricted
Subsidiary.

 

29

 

“Shelf Registration
Statement” has the meaning provided in the Appendix.

 

“Significant Subsidiary”
means any Subsidiary that would be a “significant subsidiary” as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act,
as such Regulation is in effect on the date of this Indenture.

 

“Stated Maturity”
means, with respect to any installment of interest or principal on any series
of Indebtedness, the date on which the payment of interest or principal was
scheduled to be paid in the original documentation governing such Indebtedness,
and will not include any contingent obligations to repay, redeem or repurchase
any such interest or principal prior to the date originally scheduled for the
payment thereof.

 

“Subsidiary”
means, with respect to any specified Person:

 

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

 

(2)                                  any partnership (whether general or limited) or limited
liability company (a) the sole general partner or member of which is such
Person or a Subsidiary of such Person, or (b) if there is more than a
single general partner or member, either (x) the only managing general partners
or managing members of which are such Person or one or more Subsidiaries of
such Person (or any combination thereof) or (y) such Person owns or
controls, directly or indirectly, a majority of the outstanding general partner
interests, member interests or other Voting Stock of such partnership or
limited liability company, respectively.

 

“Subsidiary Guarantee”
means the joint and several guarantee pursuant to Article 10 hereof by a
Guarantor of the Obligations of the Issuers under this Indenture and the Notes.

 

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

 

“Transfer Restricted
Securities” has the meaning provided in the Appendix.

 

“Treasury
Rate” means, as of any redemption
date, the yield to maturity as of such redemption date of United States
Treasury securities with a constant maturity (as compiled and published in the
most recent Federal Reserve Statistical Release H.15(519) which has become
publicly available at least two Business Days prior to the 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 July 1, 2013; provided, however, that if such period is not equal
to the constant maturity of a United States Treasury security for which a
weekly average yield is given, the Company shall obtain the Treasury Rate 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 

 

30

 

the redemption date to July 1, 2013 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 will (a) calculate the
Treasury Rate on the second Business Day preceding the applicable redemption
date and (b) prior to such redemption date file with the Trustee an
Officers’ Certificate setting forth the Make Whole Premium and the Treasury
Rate and showing the calculation of each in reasonable detail.

 

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

 

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

 

“Unrestricted Subsidiary”
means any Subsidiary of the Company (other than Finance Corp.) that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:

 

(1)                                  has no Indebtedness other than Non-Recourse Debt owing to any
Person other than the Company or any of its Restricted Subsidiaries;

 

(2)                                  is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company;

 

(3)                                  is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person’s financial condition or to cause such Person to achieve any
specified levels of operating results; and

 

(4)                                  has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries.

 

Any designation of a Subsidiary of the Company as an
Unrestricted Subsidiary will be evidenced to the Trustee by filing with the
Trustee a Board Resolution giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the preceding
conditions and was permitted by Section 4.07.  If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
will thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09,
the Company will be in default of such covenant.

 

“Volumetric Production
Payments” means production payment obligations recorded as deferred
revenue in accordance with GAAP, together with all related undertakings and
obligations.

 

31

 

“Voting Stock”
of any Person as of any date means the Capital Stock of such Person that is at
the time entitled (without regard to the occurrence of any contingency) to vote
in the election of the Board of Directors of such Person.

 

“Weighted Average Life to
Maturity” means, when applied to any Indebtedness or Disqualified
Stock at any date, the number of years obtained by dividing:

 

(1)                                  the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity or
redemption, in respect of the Indebtedness or Disqualified Stock, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment; by

 

(2)                                  the then outstanding aggregate principal amount of such
Indebtedness or Disqualified Stock.

 

Section 1.02.                             Other Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  
	
  “Appendix”

  	
   

  	
  2.01

  
	
  “Asset Sale Offer”

  	
   

  	
  3.09

  
	
  “Change of Control Offer”

  	
   

  	
  4.15

  
	
  “Change of Control
  Payment”

  	
   

  	
  4.15

  
	
  “Change of Control
  Purchase Date”

  	
   

  	
  4.15

  
	
  “Change of Control
  Settlement Date”

  	
   

  	
  4.15

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  
	
  “Discharge”

  	
   

  	
  8.08

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Excess Proceeds”

  	
   

  	
  4.10

  
	
  “Incremental Funds”

  	
   

  	
  4.07

  
	
  “incur”

  	
   

  	
  4.09

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  
	
  “Offer Amount”

  	
   

  	
  3.09

  
	
  “Offer Period”

  	
   

  	
  3.09

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Default”

  	
   

  	
  6.01

  
	
  “Permitted Debt”

  	
   

  	
  4.09

  
	
  “Register”

  	
   

  	
  2.03

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted
  Payments”

  	
   

  	
  4.07

  
	
  “Settlement Date”

  	
   

  	
  3.09

  
	
  “Termination Date”

  	
   

  	
  3.09

  

 

32

 

Section 1.03.                             Incorporation by Reference of Trust Indenture Act.

 

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

 

Section 1.04.                             Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

(3)                                  “or” is not
exclusive;

 

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

 

(5)                                  provisions
apply to successive events and transactions;

 

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

 

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

 

(8)                                  “including”
means “including, without limitation.”

 

ARTICLE 2

THE NOTES

 

Section 2.01.                             Form and Dating.

 

Provisions relating to the Initial Notes, the Private
Exchange Notes and the Exchange Notes are set forth in the Rule 144A/Regulation
S Appendix attached hereto (the “Appendix”) which is hereby incorporated in and
expressly made part of this Indenture. The Initial Notes and the Trustee’s
certificate of authentication therefor shall be substantially in the form of Exhibit 1
to the Appendix which is hereby incorporated in and expressly made a part of
this Indenture.  The Exchange Notes, the
Private Exchange Notes and the Trustee’s certificate of authentication therefor
shall be substantially in the form of Exhibit 2 to the Appendix, which is
hereby incorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which an
Issuer is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form

 

33

 

acceptable to the Company). 
Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in the
Appendix are part of the terms of this Indenture.

 

Section 2.02.          Execution and Authentication.

 

An Officer shall sign the Notes on behalf of each Issuer 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 signs the certificate of authentication on the Note.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.

 

On the Initial Issuance Date, the Trustee shall authenticate
and deliver $255,927,000 of 97/8% Senior Notes due 2018 and, at any time and from time to
time thereafter, the Trustee shall authenticate and deliver Notes for original
issue in an aggregate principal amount specified in a written order of the
Issuers.  Such order shall specify the
amount of the Notes to be authenticated, the date on which the original issue
of Notes is to be authenticated and to whom the Notes shall be registered and
delivered and, in the case of an issuance of Additional Notes pursuant to Section 2.13
after the Initial Issuance Date, shall certify that such issuance is in
compliance with Section 4.09.

 

The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuers to authenticate the Notes.  Unless limited by the terms of such
appointment, an 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.  An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.

 

Section 2.03.          Registrar and Paying Agent.

 

The Issuers shall at all times maintain an office or agency
where Notes may be presented for registration of transfer or for exchange (the “Registrar”)
and an office or agency in New York, New York where Notes may be presented for
payment (the “Paying Agent”).  The
Registrar shall keep a register of the Notes and of their transfer and exchange
(the “Register”).  The Issuers may have
one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any
co-registrar, and the term “Paying Agent” includes any additional paying agent.

 

The Issuers 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 Issuers shall notify the
Trustee of the name and address of any such agent.  If the Issuers fail to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07.  The Company or any Subsidiary may act as
Paying Agent or Registrar.

 

34

 

The Issuers initially appoint the Trustee as Registrar and
Paying Agent in connection with the Notes at the Corporate Trust Office of the
Trustee.

 

Section 2.04.          Paying Agent to Hold Money in Trust.

 

Prior to 11:00 a.m. New York City time, on each due date
of the principal and interest on any Note, an Issuer shall deposit with the
Paying Agent a sum sufficient to pay such principal and interest when so
becoming due.  The Issuers shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Noteholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Notes and shall notify the Trustee of any default by the Issuers 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 Issuers at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent.  Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.

 

Section 2.05.          Noteholder Lists.

 

The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Noteholders.  If the Trustee
is not the Registrar, the Issuers shall furnish to the Trustee, in writing at
least five Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Noteholders.

 

Section 2.06.          Transfer and Exchange.

 

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

 

Section 2.07.          Replacement Notes.

 

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

 

35

 

Paying Agent and the Registrar from any loss which any of
them may suffer if a Note is replaced. 
The Issuers and the Trustee may charge the Holder for their expenses in
replacing a Note.  In the event any such
Note shall have matured, instead of issuing a new Note, the Trustee may pay the
same without surrender thereof upon the Holder furnishing the Issuers and the
Trustee with indemnity satisfactory to them and complying with such other
reasonable regulations as the Trustee may prescribe and paying such reasonable
expenses as the Issuer and the Trustee may incur in connection therewith.

 

Every replacement Note is an additional obligation of the
Issuers.

 

Section 2.08.          Outstanding Notes.

 

Notes outstanding at any time are all Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not outstanding.  Except as otherwise provided in TIA
§ 316(a), a Note does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Note.

 

If a Note is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee, any provider of an indemnity bond
and the Issuers receive proof satisfactory to them that the replaced Note is
held by a bona fide purchaser.

 

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

 

Section 2.09.          Temporary Notes.

 

Until definitive Notes are ready for delivery, the Issuers
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 Issuers consider
appropriate for temporary Notes.  Without
unreasonable delay, the Issuers shall prepare and the Trustee shall
authenticate definitive Notes and deliver them in exchange for temporary Notes.

 

Section 2.10.          Cancellation.

 

An Issuer 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, replacement or payment.  The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Notes surrendered for registration of transfer, exchange, replacement, payment
or cancellation.  Upon written request,
the Trustee will deliver a certificate of such cancellation to the Issuers
unless the Issuers direct the Trustee to deliver canceled Notes to the Issuers
instead.  The Issuers may not issue new
Notes to replace Notes they have redeemed, paid or delivered to the Trustee for
cancellation.

 

36

 

Section 2.11.          Defaulted Interest.

 

If the Issuers default in a payment of interest on the Notes,
the Issuers shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) in any lawful manner.  The Issuers may pay the defaulted interest to
the Persons who are Noteholders on a subsequent special record date.  The Issuers shall fix or cause to be fixed
any such special record date and payment date to the reasonable satisfaction of
the Trustee and shall promptly mail to each Noteholder a notice that states the
special record date, the payment date and the amount of defaulted interest to
be paid.

 

Section 2.12.          CUSIP Numbers.

 

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

 

Section 2.13.          Issuance of Additional Notes.

 

The Issuers shall be entitled, subject to their compliance
with Section 4.09, to issue Additional Notes under this Indenture which
shall have identical terms as the Initial Notes issued on the Initial Issuance
Date, other than with respect to the date of issuance and issue price.  The Initial Notes issued on the Initial
Issuance Date, and any Additional Notes and all Exchange Notes or Private
Exchange Notes issued in exchange therefor shall be treated as a single class
for all purposes under this Indenture, including, without limitation, waivers,
consents, directions, declarations, amendments, redemptions and offers to
purchase.

 

With respect to any Additional Notes, the Issuers
shall set forth in an Officers’ Certificate, which shall be delivered to the
Trustee, the following information:

 

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

 

(2)           the
issue price, the issue date (and the corresponding date from which interest
shall accrue thereon and the first interest payment date therefor) and the
CUSIP number and any corresponding ISIN of such Additional Notes; provided,
however, that no Additional Notes may be issued at a price that would cause
such Additional Notes to have “original issue discount” within the meaning of Section 1273
of the Code; and

 

(3)           whether
such Additional Notes shall be Transfer Restricted Securities and issued in the
form of Initial Notes as set forth in Exhibit 1 to the Appendix or shall
be issued in the form of Exchange Notes as set forth in Exhibit 2 to the
Appendix.

 

37

 

Section 2.14.          Persons Deemed Owners.

 

Prior to due presentment of a Note for registration of
transfer, the Company, the Trustee, any Agent or any other agent of the Company
or the Trustee may treat the Person in whose name such Note is registered as
the absolute owner of such Note for the purpose of receiving payment of
principal of (and premium, if any) and interest on, such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and neither the
Company, the Trustee, any Agent nor any other agent of the Company or the
Trustee shall be affected by notice to the contrary.

 

ARTICLE 3

REDEMPTION AND PREPAYMENT

 

Section 3.01.          Notices to Trustee.

 

If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they shall furnish to the
Trustee, at least five Business Days (unless a shorter period shall be
agreeable to the Trustee) before the date of giving notice of the redemption
pursuant to Section 3.03, an Officers’ Certificate setting forth (i) the
clause of Section 3.07 pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the
redemption price, and (v) whether it requests the Trustee to give notice
of such redemption.  Any such notice may
be cancelled at any time prior to the mailing of notice of such redemption to
any Holder and shall thereby be void and of no effect.

 

Section 3.02.          Selection of Notes to Be Redeemed.

 

If less than all of the Notes are to be redeemed at any time,
the Trustee shall select the Notes to be redeemed among the Holders of the
Notes as follows: (1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or (2) if the Notes are
not listed on any national securities exchange, on a pro rata basis.  In the event of partial redemption other than
on a pro rata basis, the particular Notes to be redeemed shall be selected, not
less than five (5) Business Days (unless a shorter period shall be
agreeable to the Trustee) prior to the giving of notice of the redemption
pursuant to Section 3.03, by the Trustee from the outstanding Notes not
previously called for redemption.

 

The Trustee shall promptly notify the Issuers in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed.  Notes and portions of Notes selected shall be
in amounts of $2,000 or whole multiples of $1,000 in excess of $2,000; except
that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed.  Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes
called for redemption.

 

The provisions of the two preceding paragraphs of this Section 3.02
shall not apply with respect to any redemption affecting only a Global Note,
whether such Global Note is to be 

 

38

 

redeemed in whole or in part. 
In case of any such redemption in part, the unredeemed portion of the
principal amount of the Global Note shall be in an authorized denomination.

 

Section 3.03.          Notice of Redemption.

 

Subject to the provisions of Section 3.09 hereof, at
least 30 days but not more than 60 days before a redemption date (except that
redemption notices may be mailed more than 60 days prior to a redemption date
if the notice is issued in connection with a Legal Defeasance, Covenant
Defeasance or Discharge), the Issuers shall mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.

 

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

 

(a)           the redemption date;

 

(b)           the redemption price or, if the
redemption price is not then determinable, the manner in which it is to be
determined;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

At the Issuers’ request, the Trustee shall give the notice of
optional redemption in the Issuers’ names and at their expense; provided,
however, that the Issuers shall have delivered to the Trustee, as provided in Section 3.01,
an Officers’ Certificate requesting that the Trustee give 

 

39

 

such notice and setting forth the information to be stated in
such notice as provided in the second preceding paragraph.

 

Section 3.04.          Effect of Notice of Redemption.

 

Once notice of redemption is mailed in accordance with Section 3.03
hereof, subject to the following sentence, Notes called for redemption become
irrevocably due and payable on the applicable redemption date at the applicable
redemption price.  Notice of any
redemption, including, without limitation, upon an Equity Offering, may, at the
Company’s discretion, be subject to one or more conditions precedent,
including, but not limited to, completion of the related Equity Offering.  If mailed in the manner provided for in Section 3.03,
the notice of redemption shall be conclusively presumed to have been given
whether or not a Holder receives such notice. 
Failure to give timely notice or any defect in the notice shall not
affect the validity of the redemption.

 

Section 3.05.          Deposit of Redemption Price.

 

Prior to 11:00 a.m., New York City time, on the
redemption date, the Issuers shall deposit with the Paying Agent (or, if the
Company or a Subsidiary thereof is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 2.04 hereof) money sufficient in
same day funds to pay the redemption price of and accrued interest and Additional
Interest, if any, on all Notes to be redeemed on that date.  The Paying Agent shall promptly return to the
Issuers any money deposited with the Paying Agent by an Issuer in excess of the
amounts necessary to pay the redemption price of and accrued interest and
Additional Interest, if any, on all Notes to be redeemed.

 

If the Issuers comply with the provisions of the preceding
paragraph, on and after the redemption date, interest and Additional Interest,
if any, shall cease to accrue on the Notes or the portions of Notes called for
redemption whether or not such Notes are presented for payment, and the only
remaining right of the Holders of such Notes shall be to receive payment of the
redemption price upon surrender to the Paying Agent of the Notes redeemed.  If any Note called for redemption shall not
be so paid upon surrender for redemption because of the failure of an Issuer to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful, on any interest and Additional Interest, if any, not paid on
such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.

 

Section 3.06.          Notes Redeemed in Part.

 

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

 

Section 3.07.          Optional Redemption.

 

(a)           Except
as set forth in clauses (b) and (c) of this Section 3.07, the
Issuers shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to July 1, 2013.  On or after July 1,
2013, the Issuers shall have the option to redeem the Notes, in whole or in
part at

 

40

 

any time, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest and Additional Interest, if any, on the Notes redeemed to
the applicable redemption date (subject to the right of Holders of record on
the relevant record date to receive interest due on an interest payment date
that is on or prior to the redemption date), if redeemed during the
twelve-month period beginning on July 1 of the years indicated below:

 

	
  YEAR

  	
   

  	
  PERCENTAGE

  	
   

  
	
  2013

  	
   

  	
  104.938

  	
  %

  
	
  2014

  	
   

  	
  103.292

  	
  %

  
	
  2015

  	
   

  	
  101.646

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.0000

  	
  %

  

 

(b)           Notwithstanding
the provisions of clause (a) of this Section 3.07, at any time  prior to July 1, 2011, the Issuers may
on one or more occasions redeem up to 35% of the aggregate principal amount of
Notes (including any Additional Notes) issued under this Indenture at a
redemption price of 109.875% of the principal amount thereof, plus accrued and
unpaid interest, if any, and Additional Interest, if any, thereon to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on an interest payment date that is on or
prior to the redemption date), with the net cash proceeds of one or more Equity
Offerings, provided that, with respect to each such redemption:

 

(1)           at least 65% of the aggregate
principal amount of Notes (including any Additional Notes) issued under this
Indenture remains outstanding immediately after the occurrence of such
redemption (excluding any Notes held by the Company and its Subsidiaries); and

 

(2)           such redemption occurs within 180
days of the date of the closing of such Equity Offering.

 

(c)           Prior
to July 1, 2013, the Issuers may redeem all or part of the Notes at a
redemption price equal to the sum of:

 

(1)           100% of the principal amount thereof,
plus

 

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

 

(3)           the Make Whole Premium at the redemption date.

 

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

 

Section 3.08.          Mandatory Redemption.

 

Except as set forth under Sections 4.10 and 4.15 hereof,
neither of the Issuers shall be required to make mandatory redemption or sinking
fund payments with respect to the Notes or to repurchase the Notes at the
option of the Holders.

 

41

 

Section 3.09.          Offer to Purchase by Application of
Excess Proceeds.

 

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

 

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

 

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

 

(a)           that the Asset Sale Offer is being
made pursuant to this Section 3.09 and Section 4.10 hereof and the
length of time the Asset Sale Offer shall remain open, including the time and
date the Asset Sale Offer will terminate (the “Termination Date”);

 

(b)           the Offer Amount and the purchase
price;

 

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

 

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

 

(e)           that Holders electing to have a Note
purchased pursuant to any Asset Sale Offer shall be required to surrender the
Note, properly endorsed for transfer, together with the form entitled “Option
of Holder to Elect Purchase” on the reverse of the Note completed and such
customary documents as the Company may reasonably request, to the Company or a
Paying Agent at the address specified in the notice, before the Termination
Date;

 

(f)            that Holders shall be entitled to
withdraw their election if the Company or the Paying Agent, as the case may be,
receives, prior to the Termination Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;

 

42

 

(g)           that, if the aggregate principal
amount of Notes surrendered by Holders, and Pari Passu Indebtedness surrendered
by holders or lenders, collectively, exceeds the amount the Company is required
to repurchase, the Trustee shall select the Notes and Pari Passu Indebtedness
to be purchased on a pro rata basis on the basis of the aggregate principal
amount of tendered Notes and Pari Passu Indebtedness (with such adjustments as
may be deemed appropriate by the Trustee so that only Notes in denominations of
$2,000, or integral multiples of $1,000 in excess of $2,000, shall be
purchased); and

 

(h)           that Holders whose Notes were
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered, which unpurchased portion must
be equal to $2,000 in principal amount or an integral multiple of $1,000 in
excess of $2,000.

 

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

 

Promptly after the Termination Date, the Company shall, to
the extent lawful, accept for payment Notes or portions thereof tendered
pursuant to the Asset Sale Offer in the aggregate principal amount required by Section 4.10
hereof, and prior to the Settlement Date it shall deliver to the Trustee an
Officers’ Certificate stating that such Notes or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section 3.09
and Section 4.10.  Prior to 11:00 a.m.,
New York City time, on the Settlement Date, the Company or the Paying Agent, as
the case may be, shall mail or deliver to each tendering Holder an amount equal
to the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall issue a new Note, and the Trustee
shall authenticate and mail or deliver such new Note to such Holder, in a
principal amount equal to any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof.  The Company shall publicly announce the
results of the Asset Sale Offer on or before the Settlement Date.

 

ARTICLE 4

COVENANTS

 

Section 4.01.          Payment of Notes.

 

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

 

The Issuers shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at
the rate specified therefor in the Notes to the extent lawful; and they shall
pay interest (including post-petition interest in any proceeding under any

 

43

 

Bankruptcy Law) on overdue installments of interest and
Additional Interest, if any, (without regard to any applicable grace period),
at the same rate to the extent lawful.

 

Section 4.02.          Maintenance of Office or Agency.

 

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

 

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

 

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

 

With respect to any Global Notes, the Corporate Trust Office
of the Trustee shall be office of agency where such Global Notes may be
presented or surrendered for payment or for registration of transfer or
exchange, or where successor Notes may be delivered in exchange therefor;
provided, however, that any such presentation, surrender or delivery effected
pursuant to the Applicable Procedures of the Depository shall be deemed to have
been effected at such office or agency in accordance with the provisions of
this Indenture.

 

Section 4.03.          Reports.

 

(a)           Notwithstanding
that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, so long as any Notes are outstanding, the
Company will file with the SEC for public availability within the time periods
specified in the SEC’s rules and regulations (unless the SEC will not
accept such a filing, in which case the Company will furnish to the Trustee
and, upon its prior request, to any of the Holders of the Notes, within the
time periods specified in the SEC’s rules and regulations):

 

(1)           all quarterly and annual financial information with respect
to the Company and its Subsidiaries that would be required to be contained in a
filing with the SEC on Forms 10-Q and 10-K if the Company were required to file
such forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of 

 

44

 

Operations” and, with respect to the annual information only,
a report thereon by the Company’s certified independent accountants; and

 

(2)           all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports.

 

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

 

(b)           For
as long as the Notes remain outstanding, if at any time the Company is not
required to file the reports required by this Section 4.03 with the SEC,
the Company and the Guarantors shall furnish to the Holders of the Notes, and
to securities analysts and prospective investors in the Notes, upon their
request, the information, if any, required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.

 

(c)           If
the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then, to the extent material, the quarterly and annual financial
information required by paragraph (a) of this Section 4.03 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 Financial Condition and Results of Operations, of
the financial condition and results of operations of the Company and its
Restricted Subsidiaries separate from the financial condition and results of
operations of the Unrestricted Subsidiaries of the Company.

 

(d)           Delivery
of reports, information and documents to the Trustee under this Section is
for informational purposes only and the Trustee’s receipt of the foregoing
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein.

 

Section 4.04.          Compliance Certificate.

 

(a)           The
Issuers shall deliver to the Trustee, within 90 days after the end of each
fiscal year ending on or after December 31, 2008, an Officers’ Certificate
stating that a review of the activities of the Issuers and their Restricted
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Issuers have kept, observed, performed and fulfilled their obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that, to the best of his or her knowledge, the Issuers have kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and are not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event
of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Issuers are
taking or propose to take with respect thereto).

 

(b)           The
Issuers shall, so long as any of the Notes are outstanding, deliver to the
Trustee, forthwith upon any of their respective Officers becoming aware of any
Default or Event of Default, an Officers’ Certificate specifying such Default
or Event of Default and what action the Issuers are taking or propose to take
with respect thereto.

 

45

 

Section 4.05.          Taxes.

 

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

 

Section 4.06.          Stay, Extension and Usury Laws.

 

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

 

Section 4.07.          Limitation on Restricted Payments.

 

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

 

(1)           declare or pay any dividend or make any other payment or
distribution on account of the Company’s or any of its Restricted Subsidiaries’
Equity Interests (including, without limitation, any payment in connection with
any merger or consolidation involving the Company or any of its Restricted
Subsidiaries) or to the holders of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company or payable to the Company or a Restricted Subsidiary of the
Company);

 

(2)           purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company;

 

(3)           make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated in right of payment to the Notes or any Subsidiary Guarantee,
(excluding (a) any intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries, (b) the purchase, repurchase or
other acquisition of Indebtedness that is subordinated in right of payment to
the Notes or the Guarantees 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 or acquisition, and (c) any
payment of interest or principal at the Stated Maturity thereof); or

 

46

 

(4)           make any Restricted Investment (all such payments and other
actions set forth in these clauses (1) through (4) being collectively
referred to as “Restricted Payments”),

 

unless, at the time of and after giving effect to such
Restricted Payment, no Default (except a Reporting Default) or Event of Default
has occurred and is continuing or would occur as a consequence of such
Restricted Payment and either:

 

(I)            if the Fixed Charge Coverage Ratio for the Company’s most
recently ended four full fiscal quarters for which internal financial
statements are available at the time of such Restricted Payment is not less than
2.25 to 1.0, such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
(excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (8),
(9), (11) and (12) of the next succeeding paragraph) with respect to the
quarter for which such Restricted Payment is made, is less than the sum,
without duplication, of:

 

(a)           Available Cash with respect to the Company’s preceding fiscal
quarter, plus

 

(b)           100% of the aggregate net cash proceeds and the fair market
value of any Capital Stock of Persons engaged primarily in the Oil and Gas
Business or any other assets that are used or useful in the Oil and Gas
Business, in each case received by the Company after the date of this Indenture
as a contribution to its common equity capital or from the issue or sale of
Equity Interests of the Company (other than Disqualified Stock) or from the
issue or sale of convertible or exchangeable Disqualified Stock or convertible
or exchangeable debt securities of the Company that have been converted into or
exchanged for such Equity Interests (other than Equity Interests (or
Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the
Company), plus

 

(c)           the amount equal to the net reduction in Restricted
Investments made by the Company or any of its Restricted Subsidiaries in any
Person since the date of this Indenture resulting from:

 

            (i) repurchases or redemptions of such Restricted
Investments by such Person, proceeds realized upon the sale of such Restricted
Investment to a purchaser other than the Company or a Subsidiary of the
Company, repayments of loans or advances or other transfers of assets
(including by way of dividend or distribution) by such Person to the Company or
any Restricted Subsidiary of the Company; or

 

            (ii) 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 of the
Company in such Unrestricted Subsidiary,

 

47

 

in each case to the extent such amounts have not been
included in Available Cash for any period commencing on or after the date of
this Indenture (items (b) and (c) being referred to as “Incremental
Funds”), minus

 

(d)           the aggregate amount of Incremental Funds previously expended
pursuant to this clause (I) and clause (II) below; or

 

(II)           if the Fixed Charge Coverage Ratio for the Company’s most
recently ended four full fiscal quarters for which internal financial
statements are available at the time of such Restricted Payment is less than
2.25 to 1.0, such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
(excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (8),
(9), (11) and (12) of the next succeeding paragraph) with respect to the
quarter for which such Restricted Payment is made (such Restricted Payments for
purposes of this clause (II) meaning only distributions on units of the
Company), is less than the sum, without duplication, of:

 

(a)           $290.0 million less the aggregate amount of all prior
Restricted Payments made by the Company and its Restricted Subsidiaries
pursuant to this clause (II)(a) since the date of this Indenture, plus

 

(b)           Incremental Funds to the extent not previously expended
pursuant to this clause (II) or clause (I) above.

 

So long as no Default (except a Reporting Default) or
Event of Default has occurred and is continuing or would be caused thereby
(except with respect to clause (1) below under which the payment of a
distribution or dividend is permitted), the preceding provisions will not
prohibit:

 

(1)           the payment of any dividend or distribution within 60 days
after the date of its declaration, if at the date of declaration the payment
would have complied with the provisions of this Indenture;

 

(2)           the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any Guarantor or
of any Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent (a) contribution (other than from
a Restricted Subsidiary of the Company) to the equity capital of the Company or
(b) sale (other than to a Restricted Subsidiary of the Company) of, Equity
Interests of the Company (other than Disqualified Stock), with a sale being
deemed substantially concurrent if such redemption, repurchase, retirement,
defeasance or acquisition occurs not more than 120 days after such sale;
provided, however, that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or other
acquisition will be excluded or deducted from the calculation of Available Cash
and Incremental Funds;

 

(3)           the defeasance, redemption, repurchase, retirement or other
acquisition of subordinated Indebtedness of the Company or any Guarantor with
the net cash proceeds from a substantially concurrent incurrence of, or in
exchange for, Permitted Refinancing 

 

48

 

Indebtedness, with an incurrence of Permitted Refinancing
Indebtedness being deemed substantially concurrent if such defeasance,
redemption, repurchase, retirement or acquisition occurs not more than 120 days
after such incurrence;

 

(4)           the payment of any dividend or distribution by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro rata
basis;

 

(5)           the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Restricted Subsidiary
of the Company pursuant to any director or employee equity subscription
agreement or equity option agreement or other employee benefit plan or to
satisfy obligations under any Equity Interests appreciation rights or option
plan or similar arrangement; provided, however, that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity Interests may
not exceed $3.0 million in any calendar year, with any portion of such
$3.0 million amount that is unused in any calendar year to be carried forward
to successive calendar years and added to such amount;

 

(6)           repurchases of Indebtedness that is subordinated in right of
payment to the Notes or a Subsidiary Guarantee at a purchase price not greater
than (i) 101% of the principal amount of such subordinated Indebtedness in
the event of a Change of Control or (ii) 100% of the principal amount of
such subordinated Indebtedness in the event of an Asset Sale, in each case plus
accrued and unpaid interest thereon, in connection with any change of control
offer or asset sale offer required by the terms of such Indebtedness, but only
if:

 

(a)           in the case of a Change of Control, the Company has first
complied with and fully satisfied its obligations under Section 4.15;

 

(b)           in the case of an Asset Sale, the Company has complied with
and fully satisfied its obligations in accordance with Section 4.10;

 

(7)           the repurchase, redemption or other acquisition for value of
Equity Interests of the Company or any Restricted Subsidiary of the Company
representing fractional shares of such Equity Interests in connection with a
merger or consolidation involving the Company or such Restricted Subsidiary or
any other transaction permitted by this Indenture;

 

(8)           repurchases of Equity Interests deemed to occur upon the
exercise or conversion of stock options, warrants or other convertible
securities if such Equity Interests represent a portion of the exercise or
conversion price thereof;

 

(9)           the defeasance, repurchase, redemption or other acquisition
or retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any current or former officers,
directors or employees of the Company or any of its Restricted Subsidiaries in
connection with the exercise or vesting of any equity compensation (including,
without limitation, stock options, restricted stock and phantom stock) in order
to satisfy any tax withholding obligation with respect to such exercise or
vesting;

 

49

 

(10)         any payments to dissenting stockholders not to exceed $5.0
million in the aggregate after the date of this Indenture (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;

 

(11)         Equity Repurchases in an aggregate amount not to exceed
$100.0 million since the date of this Indenture; or

 

(12)         other Restricted Payments in an aggregate amount not to
exceed $5.0 million since the date of this Indenture.

 

The amount of all Restricted Payments (other than cash) will
be the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment.  The fair market value of any
assets or securities that are required to be valued by this covenant will be
determined, in the case of amounts under $10.0 million, by an officer of the
Company and, in the case of amounts over $10.0 million, by the Board of
Directors of the Company, whose determination shall be evidenced by a Board
Resolution.  For purposes of determining
compliance with this Section 4.07, (x) in the event that a Restricted
Payment meets the criteria of more than one of the categories of Restricted
Payments described in the preceding clauses (1) - (12), the Company will
be permitted to classify (or later classify or reclassify in whole or in part
in its sole discretion) such Restricted Payment in any manner that complies
with this Section 4.07; and (y) in the event a Restricted Payment is
made pursuant to clause (I) or (II) of the second preceding
paragraph, the Company will be permitted to classify whether all or any portion
thereof is being (and in the absence of such classification shall be deemed to
have classified the minimum amount possible as having been) made with
Incremental Funds.

 

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

 

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

 

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

 

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

 

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

 

50

 

However, the preceding restrictions of this Section 4.08
will not apply to encumbrances or restrictions existing under or by reason of:

 

(1)           agreements (including in respect of any Credit Facilities) as
in effect on the date of this Indenture and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of those agreements (or the agreements referred to in this clause
(1)) or the Indebtedness to which those agreements (or the agreements referred
to in this clause (1)) relate, provided that the amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are no more restrictive, taken as a whole, with respect to such dividend,
distribution and other payment restrictions than those contained in those
agreements on the date of this Indenture, as determined by the Board of
Directors of the Company in its reasonable and good faith judgment;

 

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

 

(3)           Applicable Law;

 

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

 

(5)           instruments governing other Indebtedness of the Company or
any of its Restricted Subsidiaries permitted to be incurred pursuant to an
agreement entered into subsequent to the date of this Indenture in accordance
with Section 4.09; provided that the provisions relating to such
encumbrance or restriction contained in such instruments are not materially
more restrictive, taken as a whole, than the provisions contained in the Credit
Agreement and in this Indenture as in effect on the date of this Indenture, as
determined by the Board of Directors of the Company in its reasonable and good
faith judgment;

 

(6)           customary non-assignment provisions in Hydrocarbon purchase
and sale or exchange agreements or similar operational agreements or in
licenses or leases, in each case entered into in the ordinary course of
business and consistent with past practices;

 

(7)           Capital Lease Obligations, mortgage financings or purchase
money obligations, in each case for property acquired in the ordinary course of
business that impose restrictions on that property purchased or leased of the
nature described in clause (3) of the preceding paragraph;

 

(8)           any agreement for the sale or other disposition of a
Restricted Subsidiary of the Company that restricts distributions by that
Restricted Subsidiary pending its sale or other disposition;

 

51

 

(9)           Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are not materially more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced, as
determined by the Board of Directors of the Company in its reasonable and good
faith judgment;

 

(10)         Liens securing Indebtedness otherwise permitted to be
incurred under the provisions of Section 4.12 that limit the right of the
debtor to dispose of the assets subject to such Liens;

 

(11)         provisions limiting the disposition or distribution of assets
or property in joint venture agreements, asset sale agreements, stock sale
agreements and other similar agreements entered into (a) in the ordinary
course of business, or (b) with the approval of the Company’s Board of
Directors, which limitations are applicable only to the assets or property that
are the subject of such agreements;

 

(12)         any agreement or instrument relating to any property or
assets acquired after the date of this Indenture, so long as such encumbrance
or restriction relates only to the property or assets so acquired and is not
and was not created in anticipation of such acquisitions;

 

(13)         restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business;

 

(14)         customary encumbrances and restrictions contained in
agreements of the types described in the definition of “Permitted Business
Investments”;

 

(15)         Hedging Contracts permitted from time to time under this
Indenture; and

 

(16)         the issuance of preferred securities by a Restricted
Subsidiary of the Company or the payment of dividends thereon in accordance
with the terms thereof; provided that issuance of such preferred securities is
permitted pursuant to Section 4.09 and the terms of such preferred
securities do not expressly restrict the ability of a Restricted Subsidiary of
the Company to pay dividends or make any other distributions on its Equity
Interests (other than requirements to pay dividends or liquidation preferences
on such preferred securities prior to paying any dividends or making any other
distributions on such other Equity Interests).

 

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

 

The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, “incur”) any
Indebtedness, the Company will not issue any Disqualified Stock, and the
Company will not permit any of its Restricted Subsidiaries to issue any
preferred securities; provided, however, that the Company and any of its
Restricted Subsidiaries may incur Indebtedness or the Company may issue
Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s most
recently ended four full fiscal quarters for which internal financial
statements are available immediately 

 

52

 

preceding the date on which such additional Indebtedness is
incurred or such Disqualified Stock is issued, as the case may be, would have
been at least 2.25 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or Disqualified Stock had been issued, as the
case may be, at the beginning of such four-quarter period.

 

The first paragraph of this Section 4.09 will not
prohibit the incurrence of any of the following items of Indebtedness or the
issuance of any Disqualified Stock described in clause (5), (12) or (15) or any
preferred securities described in clause (11) below (collectively, “Permitted
Debt”):

 

(1)           the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness (including letters of credit) under one
or more Credit Facilities, provided that, after giving effect to any such
incurrence, the aggregate principal amount of all Indebtedness incurred under
this clause (1) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Subsidiaries thereunder) and then outstanding does not exceed the greater of (a) $2,000
million and (b) an amount equal to 35.0% of the Company’s Adjusted
Consolidated Net Tangible Assets determined as of the date of such incurrence;

 

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

 

(3)           the incurrence by the Company and the Guarantors of
Indebtedness represented by (a) the Notes issued and sold on the Initial
Issuance Date and the related Subsidiary Guarantees to be issued on the Initial
Issuance Date and (b)  the Exchange Notes and the related Subsidiary
Guarantees to be issued pursuant to any Registration Rights Agreement;

 

(4)           the incurrence
by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such Restricted Subsidiary,
including all Permitted Refinancing Indebtedness incurred to extend, refinance,
renew, replace, defease or refund any Indebtedness incurred pursuant to this
clause (4), provided that after giving effect to any such incurrence, the
aggregate principal amount of all Indebtedness incurred pursuant to this
clause (4) and then outstanding does not exceed $25.0 million;

 

(5)           the incurrence or issuance by the Company or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for,
or the net proceeds of which are used to extend, refinance, renew, replace,
defease, discharge, refund or otherwise retire for value, in whole or in part,
Indebtedness of the Company or any of its Restricted Subsidiaries (other than
intercompany Indebtedness) or Disqualified Stock of the Company, in each case
that was permitted by this Indenture to be incurred under the

 

53

 

first paragraph of this Section 4.09 or
clause (2), (3) (4), or (12) of this paragraph or this clause (5);

 

(6)           the incurrence by the Company or any
of its Restricted Subsidiaries of intercompany Indebtedness between or among
any of the Company and any of its Restricted Subsidiaries; provided, however,
that:

 

(a)           if the Company is the obligor on
such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be
expressly subordinated to the prior payment in full in cash of all Obligations
with respect to the Notes, or if a Guarantor is the obligor on such
Indebtedness and neither the Company nor another Guarantor is the obligee, such
Indebtedness must be expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Subsidiary Guarantee of such
Guarantor; and

 

(b)           (i) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being held
by a Person other than the Company or a Restricted Subsidiary of the Company
and (ii) any sale or other transfer of any such Indebtedness to a Person
that is neither the Company nor a Restricted Subsidiary of the Company will be
deemed, in each case, to constitute an incurrence (as of the date of such
issuance, sale or transfer) of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by this
clause (6);

 

(7)           the incurrence by the Company or any
of its Restricted Subsidiaries of obligations under Hedging Contracts;

 

(8)           the guarantee by the Company or any
of its Restricted Subsidiaries of Indebtedness of the Company or any of its
Restricted Subsidiaries that was permitted to be incurred by another provision
of this Section 4.09;

 

(9)           the incurrence by the Company or any
of its Restricted Subsidiaries of Indebtedness relating to net gas balancing
positions arising in the ordinary course of business and consistent with past
practice;

 

(10)         the incurrence by the Company or any
of its Restricted Subsidiaries of Indebtedness in respect of bid, performance,
surety and similar bonds issued for the account of the Company and any of its
Restricted Subsidiaries in the ordinary course of business, including
guarantees and obligations of the Company or any of its Restricted Subsidiaries
with respect to letters of credit supporting such obligations (in each case
other than an obligation for money borrowed);

 

(11)         the issuance by any of the Company’s
Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries
of any preferred securities; provided, however, that:

 

54

 

(a)           any subsequent issuance or transfer
of Equity Interests that results in any such preferred securities being held by
a Person other than the Company or a Restricted Subsidiary of the Company; and

 

(b)           any sale or other transfer of any
such preferred securities to a Person that is not either the Company or a
Restricted Subsidiary of the Company

 

shall be deemed, in each
case, to constitute an issuance (as of the date of such issuance, sale or
transfer) of such preferred securities by such Restricted Subsidiary that was
not permitted by this clause (11);

 

(12)         Permitted Acquisition Indebtedness;

 

(13)         the incurrence by the Company or its
Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business; provided, however, that such Indebtedness is extinguished within five
Business Days of incurrence;

 

(14)         the incurrence by the Company or its
Restricted Subsidiaries of Indebtedness consisting of the financing of
insurance premiums in customary amounts consistent with the operations and
business of the Company and the Restricted Subsidiaries; and

 

(15)         the incurrence by the Company or any
of its Restricted Subsidiaries of additional Indebtedness or the issuance by
the Company of additional Disqualified Stock, provided that, after giving
effect to any such incurrence or issuance, the aggregate principal amount of
all Indebtedness and Disqualified Stock incurred or issued under this
clause (15) and then outstanding does not exceed the greater of (a) $50.0
million and (b) 1.0% of the Company’s Adjusted Consolidated Net Tangible
Assets determined as of the date of such incurrence or issuance.

 

For purposes of
determining compliance with this Section 4.09, in the event that an item
of Indebtedness or Disqualified Stock meets the criteria of more than one of
the categories of Permitted Debt described in clauses (1) through (15)
above, or is entitled to be incurred or issued pursuant to the first paragraph
of this Section 4.09, the Company will be permitted to classify (or later
classify or reclassify in whole or in part in its sole discretion) such item of
Indebtedness or Disqualified Stock in any manner that complies with this Section 4.09.  Any Indebtedness under Credit Facilities on
the date of this Indenture shall be considered incurred under the first
paragraph of this Section 4.09. For purposes of determining any particular
amount of Indebtedness under this covenant, (i) guarantees of, or
obligations in respect of letters of credit relating to, Indebtedness otherwise
included in the determination of such amount shall not also be included and (ii) 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 the
definition of “Permitted Debt” and the letters of credit relate to other
Indebtedness, then such other Indebtedness shall not be included.

 

55

 

The accrual of
interest, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Stock or preferred
securities in the form of additional shares of the same class of Disqualified
Stock or preferred securities will not be deemed to be an incurrence of Indebtedness
or an issuance of Disqualified Stock or preferred securities for purposes of
this Section 4.09, provided, in each such case, that the amount thereof is
included in Fixed Charges of the Company as accrued.

 

Section 4.10.          Limitation on Asset Sales.

 

The Company will not,
and will not permit any of its Restricted Subsidiaries to, consummate an Asset
Sale unless:

 

(1)           the Company (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of the Asset
Sale at least equal to the fair market value of the assets or Equity Interests
issued or sold or otherwise disposed of;

 

(2)           the fair market value is determined
by (a) an executive officer of the Company if the value is less than $20.0
million and evidenced by an Officers’ Certificate delivered to the Trustee, or (b) the
Company’s Board of Directors if the value is $20.0 million or more and
evidenced by a resolution of the Board of Directors set forth in an Officers’
Certificate delivered to the Trustee; and

 

(3)           at least 75% of the aggregate
consideration received by the Company and its Restricted Subsidiaries in the
Asset Sale is in the form of cash or Cash Equivalents.  For purposes of this provision, each of the
following will be deemed to be cash:

 

(a)           any liabilities, as shown on the
Company’s or such Restricted Subsidiary’s most recent balance sheet, of the
Company or any Subsidiary (other than contingent liabilities and liabilities
that are by their terms subordinated in right of payment to the Notes or any
Subsidiary Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such
Subsidiary from further liability;

 

(b)           any securities, notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are, within 90 days after the Asset Sale, converted by the
Company or such Subsidiary into cash, to the extent of the cash received in
that conversion; and

 

(c)           accounts receivable of a business
retained by the company or any of its Restricted Subsidiaries, as the case may
be, following the sale of such business, provided that such accounts receivable
(i) are not past due more than 90 days and (ii) do not have a payment
date greater than 120 days from the date of the invoices creating such accounts
receivable.

 

56

 

Within 360 days after
the receipt of any Net Proceeds from an Asset Sale, the Company (or the
applicable Restricted Subsidiary, as the case may be) may apply those Net
Proceeds at its option to any combination of the following:

 

(I)            to repay Senior Debt;

 

(II)           to invest in or acquire Additional
Assets; or

 

(III)         to make capital expenditures in respect of the Company’s
or its Restricted Subsidiaries’ Oil and Gas Business.

 

The requirement of
clause (II) or (III) of the preceding paragraph shall be deemed to be
satisfied if a bona fide binding contract committing to make the investment,
acquisition or expenditure referred to therein is entered into by the Company
or any of its Restricted Subsidiaries with a Person other than an Affiliate of
the Company within the time period specified in the preceding paragraph and
such Net Proceeds are subsequently applied in accordance with such contract
within six months following the date such agreement is entered into.

 

Pending the final
application of any Net Proceeds, the Company or any Restricted Subsidiary may
invest the Net Proceeds in any manner that is not prohibited by this
Indenture.  Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the preceding paragraph
will constitute “Excess Proceeds.”

 

On the 361st day
after an Asset Sale (or, at the Company’s option, any earlier date), if the
aggregate amount of Excess Proceeds then exceeds $20.0 million, the Company
will make an Asset Sale Offer to all Holders of Notes, and to all holders of
Pari Passu Indebtedness then outstanding, to purchase the maximum principal
amount of Notes and such Pari Passu Indebtedness that may be purchased out of
the Excess Proceeds.  The offer price in
any Asset Sale Offer will be equal to 100% of principal amount plus accrued and
unpaid interest and Additional Interest, if any, thereon to the Settlement
Date, subject to the right of Holders of record on the relevant record date to
receive interest due on an interest payment date that is on or prior to the
Settlement Date, and will be payable in cash. 
If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use those Excess Proceeds for any purpose not otherwise
prohibited by this Indenture.  If the
aggregate principal amount of Notes and Pari Passu Indebtedness tendered into
such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will
select the Notes and such Pari Passu Indebtedness to be purchased on a pro rata
basis.  Upon surrender of a Note that is
repurchased in part, the Issuers shall issue in the name of the applicable
Holder and the Trustee shall authenticate for such Holder at the expense of the
Issuers a new Note equal in principal amount to the non-repurchased portion of
the Note surrendered. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds will be reset at zero.

 

The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer.  To the extent that the provisions of any
securities laws or regulations conflict with the provisions of 

 

57

 

this Section 4.10,
the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under such provisions by
virtue of such compliance.

 

Section 4.11.          Limitation on Transactions with
Affiliates.

 

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

 

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

 

(2)           the Company delivers to the Trustee:

 

(a)           with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $15.0 million, an Officers’ Certificate certifying
that such Affiliate Transaction complies with this Section 4.11; and

 

(b)           with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $30.0 million, a resolution of the Board of
Directors of the Company set forth in an Officers’ Certificate certifying that
such Affiliate Transaction complies with this Section 4.11 and that such
Affiliate Transaction has been approved by a majority of the disinterested members
of the Board of Directors of the Company.

 

The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of the prior
paragraph of this Section 4.11:

 

(1)           any employment agreement or arrangement,
equity award, equity option or equity appreciation agreement or plan, employee
benefit plan, officer or director indemnification agreement, severance
agreement or other compensation plan or arrangement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business, and
payments, awards, grants or issuances of securities pursuant thereto;

 

(2)           transactions between or among any of
the Company and its Restricted Subsidiaries;

 

(3)           transactions with a Person (other
than an Unrestricted Subsidiary of the Company) that is an Affiliate of the
Company solely because the Company owns, directly or indirectly, an Equity
Interest in, or otherwise controls, such Person;

 

58

 

(4)           customary compensation,
indemnification and other benefits made available to officers, directors or
employees of the Company or a Restricted Subsidiary or Affiliate of the
Company, including reimbursement or advancement of out-of-pocket expenses and
provisions of officers’ and directors’ liability insurance;

 

(5)           sales of Equity Interests (other
than Disqualified Stock) to, or receipt of capital contributions from,
Affiliates of the Company;

 

(6)           any Permitted Investments or
Restricted Payments that are permitted by Section 4.07;

 

(7)           transactions between the Company or
any of its Restricted Subsidiaries and any Person that would not otherwise
constitute an Affiliate Transaction except for the fact that one director of
such other Person is also a director of the Company or such Restricted
Subsidiary, as applicable; provided that such director abstains from voting as
a director of the Company or such Restricted Subsidiary, as applicable, on any
matter involving such other Person;

 

(8)           the
existence of, and the performance of obligations of the Company or any
of its Restricted Subsidiaries under the terms of, any written agreement to
which the Company or any of its Restricted Subsidiaries is a party on the date
of this Indenture and which is described in the Offering Memorandum, as such
agreements may be amended, modified or supplemented from time to time;
provided, however, that any amendment, modification or supplement entered into
after the date of this Indenture will be permitted to the extent that its terms
are not materially more disadvantageous, taken as a whole, to the Holders of
the Notes than the terms of the agreements in effect on the date of this
Indenture;

 

(9)           any transaction in which the Company
or any of its Restricted Subsidiaries, as the case may be, delivers to the
Trustee a letter from an accounting, appraisal or investment banking firm of
national standing stating that such transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view or that such transaction meets
the requirements of clause (1) of this Section 4.11; and

 

(10)         (a) guarantees by the Company
or any of its Restricted Subsidiaries of performance of obligations of the
Company’s Unrestricted Subsidiaries in the ordinary course of business, except
for guarantees of Indebtedness in respect of borrowed money, and (b) pledges
by the Company or any Restricted Subsidiary of Equity Interests in Unrestricted
Subsidiaries for the benefit of lenders or other creditors of the Company’s
Unrestricted Subsidiaries.

 

Section 4.12.          Limitation on Liens.

 

The Company will not,
and will not permit any of its Restricted Subsidiaries to, create, incur,
assume or otherwise cause or suffer to exist or become effective any Lien of
any kind (other than Permitted Liens) upon any of its property or assets
(whether now owned or hereafter acquired), securing Indebtedness or
Attributable Debt, unless the Notes or the Subsidiary Guarantee of such
Restricted Subsidiary, as applicable, is secured on an equal and ratable basis 

 

59

 

with
(or, in the case of obligations subordinated in right of payment to the Notes
or such Subsidiary Guarantee, as the case may be, on a basis senior (to at
least the same extent as the Notes are senior in right of payment) to) the
obligations so secured until such time as such obligations are no longer
secured by a Lien.

 

Any Lien on any
property or assets of the Company or any of its Restricted Subsidiaries created
for the benefit of the Holders of the Notes pursuant to the preceding paragraph
shall provide by its terms that such Lien shall be automatically and
unconditionally released and discharged at such time as there are no other
Liens of any kind (other than Permitted Liens) on such property or assets securing
Indebtedness or Attributable Debt.

 

Section 4.13.          Additional Subsidiary Guarantees.

 

If, after the date of
this Indenture, any Restricted Subsidiary of the Company that is not already a
Guarantor guarantees any other Indebtedness of either of the Issuers or any
Indebtedness of any Guarantor, or any Domestic Subsidiary, if not then a
Guarantor, incurs any Indebtedness under any of the Credit Facilities, then in
either case that Subsidiary shall become a Guarantor by executing a
supplemental indenture substantially in the form of Exhibit B
hereto and delivering it to the Trustee within twenty Business Days of the date
on which it guaranteed or incurred such Indebtedness, as the case may be,
together with any Officers’ Certificate or Opinion of Counsel required by Section 9.06;
provided, however, that the preceding shall not apply to Subsidiaries of the
Company that have properly been designated as Unrestricted Subsidiaries in
accordance with this Indenture for so long as they continue to constitute
Unrestricted Subsidiaries. 
Notwithstanding the preceding, any Subsidiary Guarantee of a Restricted
Subsidiary that was incurred pursuant to this Section 4.13 shall provide
by its terms that it shall be automatically and unconditionally released at
such time as such Guarantor ceases both (x) to guarantee any other
Indebtedness of either of the Issuers and any Indebtedness of any other
Guarantor (except as a result of payment under any such other guarantee) and (y) to
be an obligor with respect to any Indebtedness under any Credit Facility.

 

Each Subsidiary
Guarantee shall also be released in accordance with Article 10.

 

Section 4.14.          Existence.

 

Except as otherwise
permitted pursuant to the terms hereof (including consolidation and merger
permitted by Section 5.01), the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its limited
liability company existence, and the corporate, partnership, limited liability
company or other existence of each of its Restricted Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Restricted Subsidiary;
provided, however, that the Company shall not be required to preserve the
existence of any of its Restricted Subsidiaries (except Finance Corp.) if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Restricted Subsidiaries
taken as a whole and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.

 

60

 

Section 4.15.          Offer to Repurchase Upon Change
of Control.

 

Within 30 days
following the occurrence of a Change of Control, the Company shall make an
offer (a “Change of Control Offer”) to repurchase all or any part (equal to
$2,000 or an integral multiple of $1,000 in excess of $2,000) of each Holder’s
Notes at a purchase price (the “Change of Control Payment”) in cash equal to
101% of the aggregate principal amount of Notes repurchased, plus accrued and
unpaid interest and Additional Interest, if any, thereon to the date of
settlement (the “Change of Control Settlement Date”), subject to the right of
Holders of record on the relevant record date to receive interest due on an
interest payment date that is on or prior to the Change of Control Settlement
Date.  Within 30 days following a Change
of Control, the Company shall mail a notice of the Change of Control Offer to
each Holder and the Trustee describing the transaction that constitutes the
Change of Control and stating:

 

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

 

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

 

(c)           that the Change of Control Offer
will expire as of the time specified in such notice on the Change of Control
Purchase Date and that the Company shall pay the Change of Control Purchase
Price for all Notes purchased as of the Change of Control Purchase Date
promptly thereafter on the Change of Control Settlement Date;

 

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

 

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

 

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

 

(g)           that Holders will be entitled to
withdraw their election if the Paying Agent receives, prior to the termination
of the Change of Control Offer, a telegram, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing its election to
have the Notes purchased; and

 

61

 

(h)           that Holders whose Notes are being
purchased only in part will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $2,000 in principal amount or an integral multiple of $1,000
in excess of $2,000.

 

If any of the Notes
subject to a Change of Control Offer is in the form of a Global Note, then the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depository applicable to repurchases.  Further, the Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes as a result of a Change
of Control.  To the extent that the
provisions of any securities laws or regulations conflict with the provisions
of this Section 4.15, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under such provisions by virtue of such compliance.

 

On the Change of
Control Purchase Date, the Company shall, to the extent lawful, accept for
payment all Notes or portions thereof (in integral multiples of $1,000)
properly tendered pursuant to the Change of Control Offer.  Promptly thereafter on the Change of Control
Purchase Date, the Company shall:

 

(i)            deposit with the Paying Agent by
11:00 a.m., New York City time, an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered; and

 

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

 

On
the Change of Control Purchase Date, the Paying Agent shall mail to each Holder
of Notes properly tendered the Change of Control Payment for such Notes (or, if
all the Notes are then in global form, make such payment through the facilities
of the Depository) and the Trustee shall authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered, if any; provided, however,
that each such new Note will be in a principal amount of $2,000 or an integral
multiple of $1,000 in excess of $2,000. 
The Company shall publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Purchase Date.

 

The Change of Control
provisions described in this Section 4.15 shall be applicable whether or
nor any other provisions of this Indenture are applicable.

 

Prior to complying
with any of the provisions of this Section 4.15, but in any event no later
than the Change of Control Purchase Date, the Company or any Guarantor shall
either repay all of its other outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing such Senior Debt to permit the
repurchase of Notes required by this Section 4.15.

 

The Company shall not
be required to make a Change of Control Offer following a Change of Control if (1) a
third party makes the Change of Control Offer in the manner, at the 

 

62

 

time
and otherwise in compliance with the requirements set forth in this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes properly tendered and not withdrawn under such Change of Control Offer or
(2) notice of redemption of all Notes has been given pursuant to Section 3.07,
unless there is a default in payment of the applicable redemption price.

 

A Change of Control
Offer may be made in advance of a Change of Control, and conditioned upon the
occurrence of such Change of Control, if a definitive agreement is in place for
such Change of Control at the time of making the Change of Control Offer.

 

In the event that
Holders of not less than 90% of the aggregate principal amount of the
outstanding Notes accept a Change of Control Offer and the Company purchases
all of the Notes held by such Holders, the Company will have the right, upon
not less than 30 nor more than 60 days’ prior notice, given not more than 30
days following the purchase pursuant to such Change of Control Offer, to redeem
all of the Notes that remain outstanding following such purchase at a purchase
price equal to the Change of Control Payment plus, to the extent not included
in the Change of Control Payment, accrued and unpaid interest on the Notes that
remain outstanding, to the date of redemption (subject to the right of Holders
on the relevant record date to receive interest due on the relevant interest
payment date).

 

Section 4.16.          No Partial Inducements.

 

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

 

Section 4.17.          Limitations on Finance Corp.
Activities.

 

Finance Corp. shall
not incur Indebtedness unless (1) the Company is a co-issuer or guarantor
of such Indebtedness or (2) the net proceeds of such Indebtedness are
loaned to the Company, used to acquire outstanding debt securities issued by
the Company or used to repay Indebtedness of the Company as permitted under Section 4.09.  Finance Corp. shall not engage in any
business not related directly or indirectly to obtaining money or arranging
financing for the Company or its Restricted Subsidiaries.

 

Section 4.18.          Designation of Restricted and
Unrestricted Subsidiaries.

 

The Board of Directors
of the Company may designate any Restricted Subsidiary of the Company to be an
Unrestricted Subsidiary if that designation would not cause a Default.  If a Restricted Subsidiary of the Company is
designated as an Unrestricted Subsidiary, the aggregate fair market value of
all outstanding Investments owned by the Company and its Restricted
Subsidiaries in the Subsidiary properly designated as an Unrestricted
Subsidiary will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for Restricted Payments under
the first paragraph of Section 4.07 or represent Permitted

 

63

 

Investments,
as determined by the Company.  That
designation shall only be permitted if the Investment would be permitted at
that time and if the Subsidiary so designated otherwise meets the definition of
an Unrestricted Subsidiary.

 

The Board of Directors
of the Company may at any time designate any Unrestricted Subsidiary of the
Company to be a Restricted Subsidiary of the Company; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under Section 4.09, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period, and (2) no Default or Event of Default would be in
existence following such designation.

 

ARTICLE 5

SUCCESSORS

 

Section 5.01.          Merger, Consolidation, or Sale
of Assets.

 

Neither of the
Issuers may, directly or indirectly, (x) consolidate or merge with or into
another Person (whether or not such Issuer is the survivor), or (y) sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets, in one or more related transactions to another
Person, unless:

 

(a)           either (1) such Issuer is the
survivor or (2) the Person formed by or surviving any such consolidation
or merger (if other than such Issuer) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a
Person organized or existing under the laws of the United States, any state of
the United States or the District of Columbia; provided, however, that Finance
Corp. may not consolidate or merge with or into any Person other than a
corporation satisfying such requirement so long as the Company is not a
corporation;

 

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

 

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

 

(d)           in the case of a transaction
involving the Company and not Finance Corp., either

 

(i)            the Company or the Person formed by
or surviving any such consolidation or merger (if other than the Company), or
to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made will, at the time of such transaction
immediately after giving pro forma effect thereto and any related financing
transaction as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least 

 

64

 

$1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09
hereof; or

 

(ii)           immediately after giving effect to
such transaction and any related financing transactions on a pro forma basis as
if the same had occurred at the beginning of the Company’s most recently ended
four full quarters for which internal financial statements are available
immediately preceding the date of the transactions, the Fixed Charge Coverage
Ratio of the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition has been made,
will be equal to or greater than the Fixed Charge Coverage Ratio of the Company
immediately prior to such transaction; or

 

(iii)          immediately after giving effect to
such transaction and any related financing transactions on a pro forma basis,
the Consolidated Net Worth of the Company will be greater than the Consolidated
Net Worth of the Company immediately prior to such transaction; and

 

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

 

Notwithstanding the
restrictions described in the foregoing clause (d), any Restricted Subsidiary
(other than an Issuer) may consolidate with, merge into or dispose of all or
part of its properties and assets to the Company, and the Company will not be
required to comply with the preceding clause (e) in connection with any
such consolidation, merger or disposition.

 

Notwithstanding the
second preceding paragraph of this Section 5.01, the Company may
reorganize as any other form of entity in accordance with the following
procedures provided that:

 

(1)           the reorganization involves the
conversion (by merger, sale, contribution or exchange of assets or otherwise)
of the Company into a form of entity other than a limited liability company
formed under Delaware law;

 

(2)           the entity so formed by or resulting
from such reorganization is an entity organized or existing under the laws of
the United States, any state thereof or the District of Columbia;

 

(3)           the entity so formed by or resulting
from such reorganization assumes all the obligations of the Company under the
Notes, this Indenture and the applicable Registration Rights Agreement pursuant
to agreements reasonably satisfactory to the Trustee;

 

(4)           immediately after such
reorganization no Default or Event of Default exists; and

 

(5)           such reorganization is not
materially adverse to the Holders or Beneficial Owners of the Notes (for
purposes of this clause (5) a reorganization will not be 

 

65

 

considered materially adverse to the Holders
or Beneficial Owners of the Notes solely because the successor or survivor of
such reorganization (a) is subject to federal or state income taxation as
an entity or (b) is considered to be an “includable corporation” of an
affiliated group of corporations with the meaning of Section 1504(b)(i) of
the Code or any similar state or local law).

 

For purposes of the
foregoing, the transfer (by lease, assignment, sale or otherwise, in a single
transaction or series of transactions) of all or substantially all of the
properties or assets of one or more Restricted Subsidiaries of the Company, the
Capital Stock of which constitutes all or substantially all of the properties
and assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.

 

Section 5.02.          Successor Substituted.

 

Upon any
consolidation or merger, or any sale, assignment, transfer, lease, conveyance
or other disposition of all or substantially all of the properties or assets of
an Issuer in accordance with Section 5.01 hereof, in which such Issuer is
not the surviving entity, the successor formed by such consolidation or into or
with which such Issuer is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, such Issuer under
this Indenture with the same effect as if such successor had been named as such
Issuer herein and shall be substituted for such Issuer (so that from and after
the date of such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the “Company” or “Finance Corp.,” as the case may be, shall refer instead to
the successor and not to the Company or Finance Corp., as the case may be); and
thereafter, if an Issuer is dissolved following a transfer of all or
substantially all of its properties or assets in accordance with this Indenture
(except in the case of a lease of all or substantially all of such Issuer’s
assets), it shall be discharged and released from all obligations and covenants
under this Indenture and the Notes.  The
Trustee shall enter into a supplemental indenture to evidence the succession
and substitution of such successor and such discharge and release of such
Issuer.

 

ARTICLE 6

DEFAULTS AND REMEDIES

 

Section 6.01.          Events of Default.

 

An “Event of Default”
occurs if one of the following shall have occurred and be continuing (whatever
the reason for such Event of Default and whether it shall be involuntary or be
effected by operation of law):

 

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

 

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

 

66

 

(c)           the Company fails to
comply with the provisions of Section 5.01 hereof or to consummate a
purchase of Notes when required pursuant to the provisions of Section 3.09,
4.10 or 4.15 hereof;

 

(d)           the Company fails to comply with the
provisions of Section 4.03 for 90 days after notice to the Company by the
Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding of such failure;

 

(e)           the Company fails to comply with any
other covenant or other agreement in this Indenture or the Notes (including the
provisions of Section 3.09, 4.10 or 4.15 to the extent not described in
clause (c) of this Section 6.01) for 60 days after notice to the
Company by the Trustee or the Holders of at least 25% in principal amount of
the Notes then outstanding of such failure;

 

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

 

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

 

(2)           results in the
acceleration of such Indebtedness prior to its Stated Maturity

 

and, in each
case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$40.0 million or more; provided, however, that if any such default is cured or
waived or any such acceleration rescinded, or such Indebtedness is repaid,
within a period of 30 days from the continuation of such default beyond the
applicable grace period or the occurrence of such acceleration, as the case may
be, such Event of Default and any consequential acceleration of the Notes shall
be automatically rescinded, so long as such rescission does not conflict with
any judgment or decree;

 

(g)           the Company or any of its Restricted
Subsidiaries fails to pay final judgments aggregating in excess of $40.0
million (to the extent not covered by insurance by a reputable and creditworthy
insurer as to which the insurer has not disclaimed coverage), which judgments
are not paid, discharged or stayed for a period of 60 days;

 

(h)           (1) any Subsidiary Guarantee is
held in any judicial proceeding to be unenforceable or invalid or ceases for
any reason to be in full force and effect or (2) any Guarantor, or any
Person acting on behalf of any Guarantor, denies or disaffirms its obligations
under its Subsidiary Guarantee, except, in each case, by reason of the release
of such Subsidiary Guarantee in accordance with the provisions of this
Indenture; and

 

67

 

(i)            the Company, Finance Corp., any of
the Company’s Restricted Subsidiaries that is a Significant Subsidiary of the
Company or any group of Restricted Subsidiaries of the Company that, taken as a
whole, would constitute a Significant Subsidiary of the Company, pursuant to or
within the meaning of Bankruptcy Law:

 

(1)           commences a voluntary case,

 

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

 

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

 

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

 

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

 

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

 

(1)           is for relief against the Company, Finance
Corp., any of the Company’s Restricted Subsidiaries that is a Significant
Subsidiary of the Company or any group of Restricted Subsidiaries of the
Company that, taken as a whole, would constitute a Significant Subsidiary of
the Company, in an involuntary case;

 

(2)           appoints a Custodian (x) of the
Company, Finance Corp., any of the Company’s Restricted Subsidiaries that is a
Significant Subsidiary of the Company or any group of Restricted Subsidiaries
of the Company that, taken as a whole, would constitute a Significant
Subsidiary of the Company, or (y) for all or substantially all of the
property of the Company, Finance Corp., any of the Company’s Restricted
Subsidiaries that is a Significant Subsidiary of the Company or any group of
Restricted Subsidiaries of the Company, that, taken together, would constitute
a Significant Subsidiary of the Company; or

 

(3)           orders the liquidation of the Company,
Finance Corp., any of the Company’s Restricted Subsidiaries that is a
Significant Subsidiary of the Company or any group of Restricted Subsidiaries
of the Company that, taken as a whole, would constitute a Significant
Subsidiary of the Company;

 

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

 

Section 6.02.          Acceleration.

 

If any Event of
Default occurs and is continuing, the Trustee, by notice to the Issuers, or the
Holders of at least 25% in principal amount of the then outstanding Notes, by
notice to the Issuers and the Trustee, may declare all the Notes to be due and
payable immediately.  Upon any 

 

68

 

such
declaration, the Notes shall become due and payable immediately, together with
all accrued and unpaid interest, Additional Interest, if any, and premium, if
any, thereon.  Notwithstanding the
preceding, if an Event of Default specified in clause (i) or (j) of Section 6.01
hereof occurs with respect to the Company, Finance Corp., any of the Company’s
Restricted Subsidiaries that is a Significant Subsidiary of the Company or any
group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary of the Company, all outstanding Notes shall
become due and payable immediately without further action or notice, together
with all accrued and unpaid interest, Additional Interest, if any, and premium,
if any, thereon.  The Holders of a
majority in principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except with respect to nonpayment of
principal, interest, premium or Additional Interest, if any, that have become
due solely because of the acceleration) have been cured or waived.

 

Section 6.03.          Other Remedies.

 

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

 

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

 

Section 6.04.          Waiver of Past Defaults.

 

Holders of a majority
in principal amount of the then outstanding Notes by notice to the Trustee may
on behalf of the Holders of all of the Notes waive (including, without
limitation, in connection with a purchase of, or tender offer or exchange offer
for, Notes) any existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of
the principal of, or interest, premium, or Additional Interest, if any, on, the
Notes.  Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

 

Section 6.05.          Control by Majority.

 

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

 

69

 

action
hereunder, the Trustee shall be entitled to reasonable indemnification against
all loss, liability and expenses caused by the taking or not taking of such
action.

 

Section 6.06.          Limitation on Suits.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.07.          Rights of Holders of Notes to
Receive Payment.

 

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

 

Section 6.08.          Collection Suit by Trustee.

 

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

 

70

 

Section 6.09.          Trustee is Authorized to File
Proofs of Claim.

 

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

 

Section 6.10.          Priorities.

 

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

 

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

 

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

 

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

 

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

 

Section 6.11.          Undertaking for Costs.

 

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

 

71

 

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

 

ARTICLE 7

TRUSTEE

 

Section 7.01.          Duties of Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

72

 

(e)           The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with an Issuer.  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 incur any liability. In case an Event of Default occurs and is
continuing, the Trustee will be under no obligation to exercise any of its
rights and powers under this Indenture at the request of any Holder unless such
Holder has offered to the Trustee reasonable indemnity or security against any
loss, liability or expense.

 

(g)           The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder and in its capacity as Trustee under any other
agreement executed in connection with the Indenture to which the Trustee is a
party.

 

Section 7.02.          Rights of Trustee.

 

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

 

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

 

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

 

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

 

(e)           Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from an Issuer shall be sufficient if
signed by an Officer of such Issuer. The Trustee may, from time to time or at
any time, request that the Issuers deliver an Officers’ Certificate setting
forth the names of individuals and/or titles of officers of each Issuer
authorized at such time to deliver, on behalf of such Issuer, an Officers’
Certificate or order to, or otherwise take specified actions on behalf of such
Issuer with respect to, the Trustee pursuant to this Indenture, which Officers’
Certificate may be signed on behalf of such Issuer by any person authorized, on
behalf of such Issuer, to sign an Officers’ Certificate, including any person
specified as so authorized in any such certificate previously delivered by such
Issuer.

 

73

 

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

 

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

 

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

 

(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 delivery of documents and
information to the Trustee under Section 4.03 is for informational
purposes only, and the Trustee’s receipt of the foregoing shall not constitute
constructive notice of any information contained therein or determinable from
the information contained therein, including the Company’s compliance with any
of its covenants hereunder, except to the extent that such documents and
information would constitute notice under Section 7.02(g) of this
Indenture.

 

Section 7.03.                             Individual Rights of Trustee.

 

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

 

Section 7.04.                             Trustee’s Disclaimer.

 

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

 

74

 

Section 7.05.                             Notice of Defaults.

 

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

 

Section 7.06.                             Reports by Trustee to Holders of
the Notes.

 

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

 

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

 

Section 7.07.                             Compensation and Indemnity.

 

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

 

The Issuers and the Guarantors shall
indemnify the Trustee, jointly and severally, against any and all losses,
liabilities, damages, claims or expenses, including taxes (other than those
based upon, measured by or determined by the income of the Trustee) and the
reasonable out of pocket fees and expenses of counsel, incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Issuers and the Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by an Issuer, any
Guarantor or any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability, damage, claim or expense may be
attributable to its gross negligence, bad faith or willful misconduct.  The Trustee shall notify the Issuers and the
Guarantors promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Issuers
and the Guarantors shall not relieve the Issuers or the Guarantors of their
obligations hereunder.  The Issuers and
the Guarantors shall 

 

75

 

defend the claim and the Trustee shall
cooperate in the defense.  The Trustee
may have separate counsel and the Issuers and the Guarantors shall pay the
reasonable fees and expenses of such counsel; provided
that the Issuers and the Guarantors will not be required to pay such fees and
expenses if they assume the Trustee’s defense with counsel acceptable to and
approved by the Trustee (such approval not to be unreasonably withheld) and
there is no conflict of interest between the Issuers and the Trustee in
connection with such defense.  The
Issuers and the Guarantors need not pay for any settlement made without their
consent, which consent shall not be unreasonably withheld.

 

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

 

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

 

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

 

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

 

Section 7.08.                             Replacement of Trustee.

 

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

 

The Trustee may
resign in writing upon thirty (30) days notice at any time and be discharged
from the trust hereby created by so notifying the Issuers.  The Holders of Notes of a majority in
principal amount of the then outstanding Notes  may
remove the Trustee by so notifying the Trustee and the Issuers in writing and
may appoint a successor trustee with the consent of the Issuers.  The Issuers may remove the Trustee if:

 

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

 

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

 

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

 

(d)                                 the
Trustee becomes incapable of acting.

 

76

 

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

 

If a successor Trustee does not take office
within 30 days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Issuers or the Holders of Notes of at least 10% in aggregate
principal amount of the then outstanding Notes may petition any court of
competent jurisdiction, at the expense of the Issuers, for the appointment of a
successor Trustee.

 

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

 

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

 

Section 7.09.                             Successor Trustee by Merger, etc.

 

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

 

Section 7.10.                             Eligibility; Disqualification.

 

There shall at all times be a Trustee
hereunder that is a corporation organized and doing business under the laws of
the United States of America or of any state thereof that is authorized under
such laws to exercise corporate trustee power, that is subject to supervision
or examination by federal or state authorities and that has a combined capital
and surplus of at least $100 million as set forth in its most recent published
annual report of condition. No obligor upon the Notes shall serve as a Trustee.

 

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

 

77

 

Section 7.11.                             Preferential Collection of
Claims Against Issuers.

 

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

 

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT
DEFEASANCE

 

Section 8.01.                             Option to Effect Legal
Defeasance or Covenant Defeasance.

 

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

 

Section 8.02.                             Legal Defeasance and Discharge.

 

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

 

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

 

78

 

Section 8.03.                             Covenant Defeasance.

 

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

 

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

 

Section 8.04.                             Conditions to Legal or Covenant
Defeasance.

 

In order to exercise
either Legal Defeasance or Covenant Defeasance:

 

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

 

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

 

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

 

79

 

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

 

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

 

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

 

(d)                                 no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit (other than a Default or Event of Default resulting from the
incurrence of Indebtedness or other borrowing of funds or the grant of Liens
securing such Indebtedness or other borrowing, all or a portion of the proceeds
of which will be applied to such deposit pursuant to this Section 8.04);

 

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

 

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

 

(g)                                 the
Issuers shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to the
Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 8.05.                             Deposited Money and Government
Securities to be Held in Trust; Other Miscellaneous Provisions.

 

Subject to Section 8.06 hereof, all
money and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee pursuant to Section 8.04 or 8.08 hereof in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
or any of its Subsidiaries acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, interest, premium, and Additional Interest, if
any, but such money need not be segregated from other funds except to the
extent required by law.

 

80

 

The Issuers shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
cash or non-callable Government Securities deposited pursuant to Section 8.04
or 8.08 hereof or the principal and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the
Holders of the outstanding Notes.

 

Anything in this Article 8 to the
contrary notwithstanding, the Trustee shall deliver or pay to the Issuers from
time to time upon the written request of the Issuers any money or non-callable
Government Securities held by it as provided in Section 8.04 or 8.08
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee (which may be the opinion delivered under Section 8.04(a) hereof),
are in excess of the amount thereof that would then be required to be deposited
to effect an equivalent Legal Defeasance, Covenant Defeasance or Discharge, as
the case may be.

 

Section 8.06.                             Repayment to Issuers.

 

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

 

Section 8.07.                             Reinstatement.

 

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

 

81

 

Section 8.08.                             Discharge.

 

This Indenture shall be satisfied and
discharged and shall cease to be of further effect as to all Notes issued
hereunder (except for (a) the rights of Holders of outstanding Notes to
receive solely from the trust fund described in clause (b) of this Section 8.08,
and as more fully set forth in such clause (b), payments in respect of the
principal of and interest, premium and Additional Interest, if any, on, such
Notes when such payments are due, (b) the Issuers’ obligations with
respect to such Notes under Sections 2.03, 2.04, 2.07, 2.09 and 4.02 hereof and
the Appendix and (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Issuers’ obligations in connection therewith),
and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to all the Notes, when:

 

(1)                                  either:

 

(a)                                  all
Notes that have been authenticated, except lost, stolen or destroyed Notes that
have been replaced or paid and Notes for whose payment money has been deposited
in trust and thereafter repaid to the Issuers, have been delivered to the
Trustee for cancellation; or

 

(b)                                 all
Notes that have not been delivered to the Trustee for cancellation have become
due and payable or will become due and payable within one year by reason of the
mailing of a notice of redemption or otherwise, and the Issuers or any
Guarantor has irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust solely for the benefit of the Holders, cash in U.S.
dollars, non-callable Government Securities, or a combination of cash in U.S.
dollars and non-callable Government Securities, in amounts as will be
sufficient without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, accrued interest, premium, if any, and Additional
Interest, if any, to the date of fixed maturity or redemption;

 

(2)                                  no Default or Event of Default has
occurred and is continuing on the date of the deposit or will occur as a result
of the deposit (other than a Default or Event of Default resulting from the
incurrence of Indebtedness or other borrowing of funds or the grant of Liens
securing such Indebtedness or other borrowing, all or a portion of the proceeds
of which will be applied to such deposit) and the deposit will not result in a
breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;

 

(3)                                  the Issuers or any Guarantor has
paid or caused to be paid all other sums payable by it under this Indenture;

 

(4)                                  the Issuers have delivered
irrevocable instructions to the Trustee to apply the deposited money toward the
payment of the Notes at fixed maturity or the redemption date, as the case may
be; and

 

82

 

(5)                                  the Issuers have delivered an
Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all
conditions precedent to satisfaction and discharge of this Indenture (“Discharge”)
have been satisfied.

 

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01.                             Without Consent of Holders of
Notes.

 

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

 

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

 

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

 

(c)                                  to
provide for the assumption of an Issuer’s obligations to the Holders of Notes
pursuant to Article 5 hereof;

 

(d)                                 to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
hereunder of any such Holder, provided that any change to conform this
Indenture to the Offering Memorandum shall not be deemed to adversely affect
the legal rights hereunder of any Holder;

 

(e)                                  to
secure the Notes or the Subsidiary Guarantees pursuant to the requirements of Section 4.12
or otherwise;

 

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

 

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

 

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

 

(i)                                     to
evidence or provide for the acceptance of appointment under this Indenture of a
successor Trustee; or

 

(j)                                     to
conform the text of this Indenture, the Subsidiary Guarantees or the Notes to
any provision described in the “Description of Notes” contained in the Offering
Memorandum.

 

83

 

Upon the request of
the Company accompanied by a resolution of its Board of Directors authorizing
the execution of any such amended or supplemental indenture, and upon receipt
by the Trustee of the documents described in Section 9.06 hereof, the
Trustee shall join with the Issuers and the Guarantors in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.

 

Section 9.02.                             With Consent of Holders of Notes.

 

Except as provided
above in Section 9.01 and below in this Section 9.02, the Issuers,
the Guarantors and the Trustee may amend or supplement this Indenture and the
Notes may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default or compliance with any provision of
this Indenture or the Notes may be waived with the consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a purchase of, tender offer or
exchange offer for Notes).  However,
without the consent of each Holder affected, an amendment, supplement or waiver
may not (with respect to any Notes held by a non-consenting Holder):

 

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

 

(b)                                 reduce the principal of or
change the fixed maturity of any Note or alter any of the provisions with
respect to the redemption or repurchase of the Notes (other than the provisions
relating to the covenants in Sections 3.09, 4.10 and 4.15 hereof);

 

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

 

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

 

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

 

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

 

(g)                                 waive a redemption or repurchase
payment with respect to any Note (other than a payment required by Sections
3.09, 4.10 and 4.15 hereof);

 

84

 

(h)                                 release any Guarantor from any
of its obligations under its Subsidiary Guarantee or this Indenture, except in
accordance with the terms of this Indenture; or

 

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

 

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

 

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

 

After an amendment,
supplement or waiver under this Section becomes effective, the Company
shall mail to the Holders of Notes affected thereby a notice briefly describing
the amendment, supplement or waiver.  Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.

 

Section 9.03.                             Compliance with Trust Indenture
Act.

 

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

 

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

 

Section 9.04.                             Revocation and Effect of
Consents.

 

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

 

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

 

85

 

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

 

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

 

Section 9.05.                             Notation on or Exchange of Notes.

 

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

 

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

 

Section 9.06.                             Trustee to Sign Amendments, etc.

 

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

 

Section 9.07.                             Acts of Holders.

 

(a)                                  Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given, made or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company.  Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Holders signing
such instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

 

86

 

Without limiting the
generality of this Section, unless otherwise provided in or pursuant to this
Indenture, (i) a Holder, including a Depository or its nominee that is a
Holder of a Global Note, may give, make or take, by an agent or agents duly
appointed in writing, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in or pursuant to this Indenture to be
given, made or taken by Holders, and a Depository or its nominee that is a
Holder of a Global Note may duly appoint in writing as its agent or agents
members of, or participants in, such Depository holding interests in such Global
Note in the records of such Depository; and (ii) with respect to any
Global Note the Depository for which is The Depository Trust Company (“DTC”),
any consent or other action given, made or taken by an “agent member” of DTC by
electronic means in accordance with the Automated Tender Offer Procedures
system or other customary procedures of, and pursuant to authorization by, DTC
shall be deemed to constitute the “Act” of the Holder of such Global Note, and
such Act shall be deemed to have been delivered to the Company and the Trustee
upon the delivery by DTC of an “agent’s message” or other notice of such
consent or other action having been so given, made or taken in accordance with
the customary procedures of DTC.

 

(b)                         The fact and date of the
execution by any Person of any such instrument or writing may be proved by the
affidavit of a witness of such execution or by a certificate of a notary public
or other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the
execution thereof.  Where such execution
is by a Person acting in a capacity other than such Person’s individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of the authority of the Person executing the same.  The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.

 

(c)                          The ownership of Notes shall be
proved by the Register.

 

(d)                         Without limiting the foregoing,
a Holder entitled hereunder to give, make or take any action hereunder with
regard to any particular Note may do so, or duly appoint in writing any Person
or Persons as its agent or agents to do so, with regard to all or any part of
the principal amount of such Note.

 

ARTICLE 10

GUARANTEES OF NOTES

 

Section 10.01.                       Subsidiary Guarantees.

 

Subject to this Article 10,
each of the Guarantors hereby, jointly and severally, unconditionally
guarantees, on a senior unsecured basis, to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes
held thereby and the Obligations of the Issuers hereunder and thereunder, that:
(a) the principal of, and interest, premium and Additional Interest, if
any, on, the Notes will be promptly paid in full when due, subject to any
applicable grace period, whether at Stated Maturity, by acceleration, upon
repurchase or redemption or otherwise, and interest on the overdue principal
of, premium, and (to the extent permitted by law) interest and Additional
Interest, if any, on, the Notes, and all other payment Obligations of 

 

87

 

the
Issuers to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full and performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other Obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, subject to any applicable grace period, whether at Stated Maturity, by
acceleration, upon repurchase or redemption or otherwise.  Failing payment when so due of any amount so
guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. 
An Event of Default under this Indenture or the Notes shall constitute
an event of default under the Subsidiary Guarantees, and shall entitle the
Holders to accelerate the obligations of the Guarantors hereunder in the same
manner and to the same extent as the Obligations of the Issuers.

 

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

 

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

 

Each Guarantor
further agrees that, as between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (a) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6
hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed thereby, and (b) in the event of any declaration of
acceleration of such Obligations as provided in Article 6 hereof, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purpose of its Subsidiary Guarantee.  The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Subsidiary
Guarantees.

 

Section 10.02.                       Guarantors May Consolidate,
etc., on Certain Terms.

 

(a)                                  No Guarantor shall sell or
otherwise dispose of all or substantially all of its properties or assets to,
or consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person), another Person (other than the Company or another
Guarantor), unless, 

 

88

 

(i) either (1) the
Person acquiring the properties or assets in any such sale or other disposition
or the Person formed by or surviving any such consolidation or merger (if other
than such Guarantor) unconditionally assumes, pursuant to a supplemental
indenture substantially in the form of Annex A hereto, all the
obligations of such  Guarantor under the
Notes, this Indenture and its Subsidiary Guarantee on terms set forth therein,
or (2) such transaction complies with the provisions of Section 4.10,
and (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists.

 

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

 

Section 10.03.                       Releases of Subsidiary
Guarantees.

 

The Subsidiary
Guarantee of a Guarantor shall be released: 
(1) in connection with any sale or other disposition of all or
substantially all of the properties or assets of such Guarantor (including by
way of merger or consolidation) to a Person that is not (either before or after
giving effect to such transaction) the Company or a Restricted Subsidiary of
the Company, if the sale or other disposition complies with Section 4.10; (2) in
connection with any sale or other disposition of all of the Capital Stock of
such Guarantor to a Person that is not (either before or after giving effect to
such transaction) the Company or a Restricted Subsidiary of the Company, if the
sale or other disposition complies with Section 4.10; (3) if such
Guarantor is a Restricted Subsidiary and the Company designates such Guarantor
as an Unrestricted Subsidiary in accordance with Section 4.18 of this
Indenture; (4) upon Legal Defeasance or Covenant Defeasance or Discharge
in accordance with Article 8; (5) upon the liquidation or dissolution
of such Guarantor provided no Default or Event of Default has occurred or is
continuing; (6) at such time as such Guarantor ceases both (x) to
guarantee any other Indebtedness of either of the Issuers and any Indebtedness
of any other Guarantor (except as a result of payment under any such other
guarantee) and (y) to be an obligor with respect to any Indebtedness under
any Credit Facility; or (7) upon such Guarantor consolidating with,
merging into or transferring all of its properties or assets to the Company or
another Guarantor, and as a result of, or in connection with, such transaction
such Guarantor dissolving or otherwise ceasing to exist.

 

Upon delivery by the
Company to the Trustee of an Officers’ Certificate to the effect that any of
the conditions described in the foregoing clauses (1) – (7) has
occurred, the Trustee shall execute any documents reasonably requested by the
Company in order to evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee.  Any
Guarantor not released from its obligations under its Subsidiary Guarantee
shall remain liable for the full amount of principal of and interest, premium,
and Additional Interest, if any, on, the Notes and for the other obligations of
such Guarantor under this Indenture as provided in this Article 10.

 

89

 

Section 10.04.                       Limitation on Guarantor
Liability.

 

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

 

Section 10.05.                       “Trustee” to Include Paying
Agent.

 

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

 

ARTICLE 11

MISCELLANEOUS

 

Section 11.01.                       Trust Indenture Act Controls.

 

If any provision of
this Indenture limits, qualifies or conflicts with the duties imposed by TIA
§ 318(c), such TIA-imposed duties shall control. If any provision hereof
limits, qualifies or conflicts with a provision of the TIA which is required to
be a part of and govern this Indenture, such required provision of the TIA
shall control. If any provision of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the provision of the
TIA shall be deemed to apply to this Indenture as so modified or shall be
excluded, as the case may be.

 

Section 11.02.                       Notices.

 

Any notice or
communication by an Issuer, any Guarantor or the Trustee to the other parties
hereto is duly given if in writing (in the English language) and delivered in
person or mailed by first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
to their respective addresses:

 

If to any of the Issuers or the Guarantors:

 

Linn Energy, LLC

600 Travis, Suite 5100

Houston, Texas 77002

Attention: Chief Financial Officer

Telecopier No.: (281) 840-4186

 

90

 

with a copy to:

 

Akin Gump Strauss Hauer & Feld LLP

1111 Louisiana Street

44th Floor

Attention: J. Michael
Chambers

Houston, TX 77002-5200

Telecopier No.: (713) 236-0822

 

If to the Trustee:

 

U.S. Bank National Association

Corporate Trust Services

5555 San Felipe Street, Suite 1150

Houston, Texas 77056

Attention: Steven A. Finklea

Telecopier No.: (713) 235-9213

 

An Issuer, any of the
Guarantors or the Trustee, by notice to the other parties hereto, may designate
additional or different addresses for subsequent notices or communications.

 

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

 

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

 

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

 

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

 

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.

 

Where this Indenture
provides for notice of any event to a Holder of a Global Note, such notice
shall be sufficiently given if given to the Depository for such Note (or its
designee), 

 

91

 

pursuant
to its Applicable Procedures, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the giving of such
notice.

 

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

 

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

 

Section 11.04.                       Certificate and Opinion as to
Conditions Precedent.

 

Upon
any request or application by an Issuer to the Trustee to take any action or
refrain from taking any action under this Indenture, such Issuer shall furnish
to the Trustee:

 

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

 

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

 

Section 11.05.                       Statements Required in Certificate
or Opinion.

 

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

 

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

 

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

 

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

 

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

 

In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters 

 

92

 

and one or
more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous.  Any such certificate or
opinion of, or representation by, counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

 

Section 11.06.                       Rules by Trustee and Agents.

 

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

 

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

 

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

 

Section 11.08.                       Governing Law.

 

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

 

Section 11.09.                       No Adverse Interpretation of
Other Agreements.

 

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

 

93

 

Section 11.10.        Successors.

 

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

 

Section 11.11.        Severability.

 

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

 

Section 11.12.        Table of Contents, Headings, etc.

 

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

 

Section 11.13.        Counterparts.

 

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

 

Section 11.14.        Benefits of Indenture.

 

Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Holders of Notes, any benefit or any legal or equitable
right, remedy or claim under this Indenture.

 

Section 11.15.        Language of Notices, Etc.

 

Any request, demand, authorization, direction, notice,
consent, waiver or Act required or permitted under this Indenture shall be in
the English language, except that any published notice may be in an official
language of the country of publication.

 

[Signatures
on following page]

 

94

 

SIGNATURES

 

	
   

  	
  LINN ENERGY, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LINN ENERGY FINANCE CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LINN OPERATING, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LINN ENERGY HOLDINGS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PENN WEST PIPELINE, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID ATLANTIC WELL SERVICE, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
					

 

 

	
   

  	
  MID-CONTINENT HOLDINGS I, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-CONTINENT HOLDINGS II, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-CONTINENT I, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LINN GAS MARKETING, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-CONTINENT II, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LINN EXPLORATION MIDCONTINENT, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kolja Rockov

  
	
   

  	
   

  	
  Name:

  	
  Kolja Rockov

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  

 

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, AS
  TRUSTEE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven A. Finklea

  
	
   

  	
   

  	
  Name:

  	
   Steven A. Finklea, CCTS

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 

RULE
144A/REGULATION S APPENDIX

 

PROVISIONS RELATING TO
INITIAL NOTES,

PRIVATE EXCHANGE NOTES

AND EXCHANGE NOTES

 

1.                                       Definitions

 

1.1           Definitions.

 

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

 

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

 

“Exchange Notes” means (1) the 97/8%
Senior Notes due 2018 issued pursuant to the Indenture in connection with a
Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional
Notes, if any, issued pursuant to a registration statement filed with the SEC
under the Securities Act.

 

“Initial Notes” means (1) $255,927,000 aggregate
principal amount of 97/8%
Senior Notes due 2018 issued pursuant to the Indenture on the Initial Issuance
Date, (2) Additional Notes, if any, issued in a transaction exempt from
the registration requirements of the Securities Act and (3) any 97/8%
Senior Notes due 2018 issued pursuant to Section 2.3(b)(ii) in
exchange for any Initial Notes.

 

“Initial Purchasers” means (1) with respect to the
Initial Notes issued on the Initial Issuance Date, Lehman Brothers Inc., BNP
Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Deutsche
Bank Securities Inc., RBC Capital Markets Corporation, BMO Capital Markets
Corp., Calyon
Securities (USA) Inc., Citigroup
Global Markets Inc., Greenwich Capital Markets, Inc., SG Americas
Securities, LLC, Wachovia Capital Markets, LLC, Comerica Securities, Inc.,
Fortis Securities LLC, Jefferies & Company, Inc., KeyBank Capital
Markets Inc., Piper Jaffray & Co., Scotia Capital (USA) Inc., and
SunTrust Robinson Humphrey, Inc., and (2) with respect to each
issuance of Additional Notes, the Persons purchasing such Additional Notes
under the related Purchase Agreement.

 

“Notes” means the Initial Notes (including any Additional
Notes, if any, issued in a transaction exempt from the registration
requirements of the Securities Act), the Exchange Notes (including any
Additional Notes, if any, issued pursuant to a registration statement filed
with the SEC under the Securities Act) and the Private Exchange Notes, treated
as a single class.

 

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

 

1

 

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

 

“Private Exchange Notes” means any 97/8%
Senior Notes due 2018 issued pursuant to the Indenture in connection with a
Private Exchange.

 

“Purchase Agreement” means (1) with respect to the
Initial Notes issued on the Initial Issuance Date, the Purchase Agreement dated
June 24, 2008 among the Issuers, the Guarantors and the Initial
Purchasers, and (2) with respect to each issuance of Additional Notes, the
purchase agreement or underwriting agreement among the Issuers and the Persons
purchasing or underwriting such Additional Notes.

 

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

 

“Registration Rights Agreement” means (1) with respect
to the Initial Notes issued on the Initial Issuance Date, the Registration
Rights Agreement dated June 27, 2008 among the Issuers, the Guarantors and
the Initial Purchasers, a form of which is attached to this Indenture as Annex
B, and (2) with respect to each issuance of Additional Notes issued in a
transaction exempt from the registration requirements of the Securities Act,
the registration rights agreement, if any, among the Issuers and the Persons
purchasing such Additional Notes under the related Purchase Agreement, in each
case, as amended from time to time.

 

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

 

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

 

“Unrestricted Initial Notes” means any Initial Notes that are
not Transfer Restricted Securities.

 

1.2           Other Definitions.

 

	
  Term

  	
   

  	
  Defined in Section:

  
	
  “Agent Members”

  	
   

  	
  2.1(b)

  
	
  “Distribution Compliance
  Period”

  	
   

  	
  2.1(b)

  
	
  “Global Note”

  	
   

  	
  2.1(a)

  
	
  “Regulation S”

  	
   

  	
  2.1(a)

  
	
  “Regulation S Notes”

  	
   

  	
  2.1(a)

  
	
  “Resale Restriction
  Termination Date”

  	
   

  	
  2.3(b)

  
	
  “Restricted Global Note”

  	
   

  	
  2.1(a)

  
	
  “Rule 144A”

  	
   

  	
  2.1(a)

  
	
  “Rule 144A Notes”

  	
   

  	
  2.1(a)

  

 

2

 

2.                                       The Notes.

 

2.1           (a)  Form and Dating.  Initial Notes offered and sold to QIBs in
reliance on Rule 144A (“Rule 144A Notes”) under the Securities Act (“Rule 144A”)
or in reliance on Regulation S (“Regulation S Notes”) under the
Securities Act (“Regulation S”), in each case as provided in a Purchase
Agreement, and Private Exchange Notes, as provided in a Registration Rights Agreement,
shall be issued initially in the form of one or more permanent global Notes in
definitive, fully registered form without interest coupons with the global
Notes legend and Restricted Notes legend set forth in Exhibit 1 hereto
(each, unless and until becoming an Unrestricted Initial Note in accordance
with Section 2.3(b)(ii) below, a “Restricted Global Note”), which
shall be deposited on behalf of the purchasers of the Initial Notes represented
thereby with the Trustee, as custodian for the Depository (or with such other
custodian as the Depository may direct), and registered in the name of the
Depository or a nominee of the Depository, duly executed by the Issuers and
authenticated by the Trustee as hereinafter provided.  Beneficial interests in a Restricted Global
Note representing Initial Notes sold in reliance on either Rule 144A or
Regulation S may be held through Euroclear or Clearstream, as indirect
participants in the Depository.  The
aggregate principal amount of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and
the Depository or its nominee as hereinafter provided.  Exchange Notes shall be issued in global form
(with the global Notes legend set forth in Exhibit 1 hereto) or in
certificated form as provided in Section 2.4 of this Appendix.  Exchange Notes issued in global form,
Unrestricted Initial Notes issued in global form and Restricted Global Notes
are sometimes referred to in this Appendix as “Global Notes”.

 

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

 

The Issuers shall execute
and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Notes that (a) shall
be registered in the name of the Depository for such Global Note or Global
Notes or the nominee of such Depository and (b) shall be delivered by the
Trustee to such Depository or pursuant to such Depository’s instructions or
held by the Trustee as custodian for the Depository.  If such Global Notes are Restricted Global
Notes, then separate Global Notes shall be issued to represent Rule 144A
Notes and Regulation S Notes so long as required by law or the Depository.

 

Members of, or participants
in, the Depository (“Agent Members”) shall have no rights under this Indenture
with respect to any Global Note held on their behalf by the Depository or by
the Trustee as the custodian of the Depository or under such Global Note, and
the Issuers, the Trustee and any agent of the Issuers or the Trustee shall be
entitled to treat the Depository as the absolute owner of such Global Note for
all purposes whatsoever.  Notwithstanding
the foregoing, nothing herein shall prevent the Issuers, the Trustee or any
agent of the Issuers or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the 

 

3

 

Depository or impair, as
between the Depository and its Agent Members, the operation of customary
practices of such Depository governing the exercise of the rights of a holder
of a beneficial interest in any Global Note.

 

Prior
to the expiration of the period through and including the 40th day after the
later of the commencement of the offering of any Initial Notes and the closing
of such offering (such period, the “Restricted Period”), beneficial interests
in the Restricted Global Note representing Regulation S Notes may be
exchanged for beneficial interests in the Rule 144A Restricted Global Note
representing Rule 144A Notes only if (i) such exchange occurs in
connection with a transfer of the notes pursuant to Rule 144A, (ii) the
transferor first delivers to the Trustee a written certificate (in the form
provided in Exhibit 1 hereto) to the effect that the notes are being
transferred to a Person who the transferor reasonably believes to be a QIB
within the meaning of Rule 144A and is purchasing for its own account or
the account of a QIB, in each case in a transaction meeting the requirements of
Rule 144A, and (iii) the transfer is in accordance with all
applicable securities laws of the states of the United States and other
jurisdictions.  After the expiration of
the Restricted Period, such certification requirements shall not apply to such
transfers of beneficial interests in a Restricted Global Note representing
Regulation S Notes.

 

Beneficial
interests in a Restricted Global Note representing Rule 144A Notes may be
transferred to a Person who takes delivery in the form of an interest in the
Restricted Global Note representing Regulation S Notes, whether before or
after the expiration of the Restricted Period, only if the transferor first
delivers to the Trustee a written certificate (in the form provided in Exhibit 1
hereto) to the effect that such transfer is being made in accordance with Rule 903
or 904 of Regulation S or Rule 144 (if available) and that, if such
transfer occurs prior to the expiration of the Restricted Period, the interest
transferred will be held immediately thereafter through Euroclear or
Clearstream.

 

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

 

2.2           Authentication. 
The Trustee shall authenticate and deliver:  (1) on the Initial Issuance Date, an
aggregate principal amount of $255,927,000 97/8% Senior Notes due 2018, (2) at
any time or from time to time, any Additional Notes for an original issue in an
aggregate principal amount specified in the written order of the Issuers
pursuant to Section 2.02 of the Indenture and (3) at any time or from
time to time, Exchange Notes or Private Exchange Notes for issue only in a
Registered Exchange Offer or a Private Exchange, respectively, pursuant to a
Registration Rights Agreement, for a like principal amount of Initial Notes, in
each case upon a written order of the Issuers. 
Such order (x) shall specify (i) the aggregate principal
amount of the Notes to be authenticated, the date on which such Notes are to be
authenticated and to whom such Notes shall be registered and delivered; (ii) whether
such Notes constitute Initial Notes, Exchange Notes or Private Exchange Notes; (iii) whether
or not such Notes constitute Additional Notes; and (iv) if such Notes
constitute Additional Notes, the issue price, the issue date (and the
corresponding date from which interest shall accrue thereon and the first
interest payment date therefor) and the CUSIP number and any corresponding ISIN
of such Additional Notes and whether such Additional Notes shall be Transfer
Restricted Securities and issued in the form of 

 

4

 

Initial Notes as set forth
in Exhibit 1 hereto or shall be issued in the form of Exchange Notes as
set forth in Exhibit 2 hereto and (y) in the case of any issuance of
Additional Notes pursuant to Section 2.13 of the Indenture, shall certify
that such issuance is in compliance with Section 4.09 of the Indenture.
The Trustee shall also authenticate and deliver Notes at the times and in the
manner specified in Sections 2.3 and 2.4 hereof and in Sections 2.06, 2.07,
2.09, 3.06, 4.10, 4.15 or 9.05 of the Indenture.

 

2.3           Transfer and Exchange.

 

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

 

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

 

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

 

(b)           Legend.

 

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

 

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS. NEITHER SUCH NOTES NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, 

 

5

 

TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER OF ANY NOTE EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS
THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
SUCH NOTE IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, PRIOR TO THE DATE
WHICH IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF SUCH NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WERE THE OWNERS OF SUCH NOTE (OR ANY PREDECESSOR OF SUCH NOTE)
(THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE TRANSFER
SUCH NOTE EXCEPT (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT
TO RULE 144 UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM SUCH NOTE IS TRANSFERRED PRIOR TO THE
RESALE RESTRICTION TERMINATION DATE A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (i) THAT IS (A) PURSUANT TO CLAUSE (2)(D) PRIOR
TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (B) PURSUANT TO CLAUSE (2)(F) PRIOR
TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES IN CLAUSES (i)(A) OR
(B), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED AS TO ANY NOTE EVIDENCED HEREBY UPON DELIVERY TO THE
TRUSTEE BY THE COMPANY OR THE  HOLDER
THEREOF OF A WRITTEN REQUEST FOR THE REMOVAL HEREOF, IN ANY CASE AT ANY TIME
AFTER THE RESALE RESTRICTION TERMINATION DATE. 
AS USED HEREIN, THE TERMS

 

6

 

“OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S.
PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.

 

(ii)           The Company, acting in its
discretion, may remove the legend set forth in paragraph (i) above
from any Transfer Restricted Security at any time on or after the Resale
Restriction Termination Date applicable to such Transfer Restricted Security.
Without limiting the generality of the preceding sentence, the Company may
effect such removal by issuing and delivering, in exchange for such Transfer
Restricted Security, an Unrestricted Initial Note without such legend,
registered to the same Holder and in an equal principal amount, and upon
receipt by the Trustee of a written order of the Company stating that the
Resale Restriction Termination Date applicable to such Transfer Restricted
Security has occurred and requesting the authentication and delivery of an
Unrestricted Initial Note in exchange therefor (which order shall not be
required to be accompanied by any Opinion of Counsel or any other document)
given at least three Business Days in advance of the proposed date of exchange
specified therein (which shall be no earlier than such Resale Restriction
Termination Date), the Trustee shall authenticate and deliver such Unrestricted
Initial Note to the Depository or pursuant to such Depository’s instructions or
hold such Note as Note Custodian for the Depository and shall request the
Depository to, or, if the Trustee is Note Custodian of such Transfer Restricted
Security, shall itself, surrender such Transfer Restricted Security in exchange
for such Unrestricted Initial Note without such legend and thereupon cancel
such Transfer Restricted Security so surrendered, all as directed in such
order. For purposes of determining whether the Resale Restriction Termination
Date has occurred with respect to any Notes evidenced by a Transfer Restricted
Security or delivering any order pursuant to this Section 2.3(b)(ii) with
respect to such Notes, (i) only those Notes which a Principal Officer of
the Company actually knows (after reasonable inquiry) to be or to have been
owned by an Affiliate of the Company shall be deemed to be or to have been,
respectively, owned by an Affiliate of the Company; and (ii) “Principal
Officer” means the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the Company.

 

For purposes
of this Section 2.3(b)(ii), all provisions relating to the removal of the
legend set forth in paragraph (i) above shall relate, if the Resale
Restriction Termination Date has occurred only with respect to a portion of the
Notes evidenced by a Transfer Restricted Security, to such portion of the Notes
so evidenced as to which the Resale Restriction Termination Date has occurred.

 

Each holder of
any Note evidenced by any Restricted Global Note, by its acceptance thereof, (A) authorizes
and consents to, (B) appoints the Company as its agent for the sole
purpose of delivering such electronic messages, executing and delivering such
instruments and taking such other actions, on such holder’s behalf, as the
Depository or the Trustee may require to effect, and (C) upon the request
of the Company, agrees to deliver such electronic messages, execute and deliver
such instruments and take such other actions as the Depository or the Trustee
may require, or as shall otherwise be necessary to effect, the removal of the
legend set forth in Section 2.3(b)(i) (including by means of the
exchange of all or the portion of such Restricted 

 

7

 

Global Note
evidencing such Note for a certificate evidencing such Note that does not bear
such legend) at any time after the Resale Restriction Termination Date.

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

(i)            To permit registrations of transfers
and exchanges, the Issuers shall execute and the Trustee shall authenticate
certificated Notes and Global Notes at the Registrar’s request.

 

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

 

(iii)          The Registrar shall not be required to
register the transfer of or exchange of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed in
part.  Also, it need not exchange or
register the transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed.

 

(iv)          Prior to the due presentation for
registration of transfer of any Note, the Issuers, the Guarantors, 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, interest, premium and Additional Interest,
if any, on, such Note and for all other purposes whatsoever, whether or not
such Note is overdue, and none of the Issuers, the Guarantors, 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. Accordingly, for purposes of clause
(3) of the second paragraph of Section 4.09 of the Indenture, “the
Notes issued and sold on the Initial Issuance Date” shall be deemed to refer to
and include any Notes issued in exchange for, or upon registration of transfer
of, or in lieu of, any such Notes (or any predecessor Notes thereof) pursuant
to Sections 2.3 or 2.4 hereof or Sections 2.06, 2.07, 2.09, 3.06, 4.10, 4.15 or
9.05 of the Indenture.

 

(e)           No Obligation of the Trustee.

 

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

 

9

 

subject to the
applicable rules and procedures of the Depository.  The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its members, participants and any beneficial owners.

 

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

 

2.4           Certificated Notes.

 

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

 

(b)           Any Global Note that is transferable
to the beneficial owners thereof pursuant to this Section shall be
surrendered by the Depository or the Notes Custodian to the Trustee located at
its Corporate Trust Office to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Note, an equal aggregate principal
amount of certificated Notes of authorized denominations.  Any portion of a Global Note transferred
pursuant to this Section shall be executed, authenticated and delivered
only in denominations equal to $2,000 or an integral multiple of $1,000 in
excess of $2,000, and registered in such names as the Depository shall
direct.  Any certificated Note or Private
Exchange Note delivered in exchange for an interest in the Global Note shall,
except as otherwise provided by Section 2.3(b), bear the Restricted Notes
legend set forth in Exhibit 1 hereto.

 

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

 

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

 

10

 

EXHIBIT 1 TO RULE 144A/REGULATION S APPENDIX

 

[FORM OF FACE OF INITIAL NOTE]

 

[Global Notes Legend]

 

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

 

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

 

[Restricted Notes Legend]

 

THE NOTES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER SUCH
NOTES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
ANY NOTE EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT
IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING SUCH NOTE
IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, PRIOR TO THE DATE WHICH IS
ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF SUCH NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WERE THE OWNERS OF SUCH NOTE (OR ANY PREDECESSOR OF SUCH NOTE)
(THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE TRANSFER
SUCH NOTE EXCEPT (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT (“RULE 144A”), TO A 

 

1

 

PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM SUCH NOTE IS TRANSFERRED PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (i) THAT IS (A) PURSUANT TO CLAUSE (2)(D) PRIOR
TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (B) PURSUANT TO CLAUSE (2)(F) PRIOR
TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES IN CLAUSES (i)(A) OR
(B), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED AS TO ANY NOTE EVIDENCED HEREBY UPON DELIVERY TO THE
TRUSTEE BY THE COMPANY OR THE  HOLDER
THEREOF OF A WRITTEN REQUEST FOR THE REMOVAL HEREOF, IN ANY CASE AT ANY TIME
AFTER THE RESALE RESTRICTION TERMINATION DATE. 
AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S.
PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.

 

2

 

LINN
ENERGY, LLC

 

LINN
ENERGY FINANCE CORP.

 

	
  No. [      ]

  	
   

  	
  Principal Amount
  $[                ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP No. 
  [                ]

  
	
   

  	
   

  	
  ISIN No. 
  [                ]

  

 

97/8%
Senior Note due 2018

 

Linn Energy,
LLC, a Delaware limited liability company, and Linn Energy Finance Corp., a
Delaware corporation, jointly and severally promise to pay to
                    ,
or registered assigns, the principal sum of
                  
Dollars on July 1, 2018 [or such greater or lesser amount as may be
indicated on Schedule A hereto].(1)

 

Interest
Payment Dates:  January 1 and July 1

 

Record
Dates:  December 15 and June 15

 

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

 

 

	
   

  	
  LINN ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LINN ENERGY FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

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

 

3

 

	
  TRUSTEE’S CERTIFICATE OF

  	
   

  
	
  AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  U.S. BANK
  NATIONAL ASSOCIATION

  	
   

  
	
  as Trustee,
  certifies that

  	
   

  
	
  this is one
  of the Notes

  	
   

  
	
  referred to
  in the Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
			

 

4

 

[FORM OF REVERSE SIDE OF INITIAL NOTE]

 

97/8%
Senior Note due 2018

 

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

 

1.             Interest.  Linn Energy, LLC, a Delaware limited
liability company (the “Company”), and Linn Energy Finance Corp., a Delaware
corporation (the “Finance Corp.” and, together with the Company, the “Issuers”),
jointly and severally promise to pay interest on the principal amount of this
Note at 97/8% per annum from June 27,
2008 until maturity and shall pay Additional Interest payable pursuant to Section 5
of the Registration Rights Agreement referred to below. The Issuers will pay
interest and Additional Interest, if any, semi-annually in arrears on January 1
and July 1 of each year (each an “Interest Payment Date”), commencing January 1,
2009. If an Interest Payment Date falls on a day that is not a Business Day,
the interest payment to be made on such Interest Payment Date will be made on
the next succeeding Business Day with the same force and effect as if made on
such Interest Payment Date, and no additional interest will accrue solely as a
result of such delayed payment. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid, from
the date of original issuance; provided that if there is no existing Default or
Event of Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date, except in the case of the original issuance of Notes, in which
case interest shall accrue from the date of authentication.  The Issuers shall pay (i) interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue principal and premium, if any, from time to time on demand at a rate
that is 1% higher than the then applicable interest rate on the Notes and (ii) interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Additional Interest (without regard to
any applicable grace periods) from time to time on demand at the same rate to
the extent lawful.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

 

2.             Method
of Payment.  The Issuers will pay
interest on the Notes (except defaulted interest) and Additional Interest to
the Persons who are registered Holders of Notes at the close of business on the
December 15 or June 15 next preceding the Interest Payment Date, even
if such Notes are cancelled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.11 of the Indenture
with respect to defaulted interest.  Holders
must surrender Notes to the Paying Agent to collect payments of principal and
premium, if any, together with accrued and unpaid interest and Additional
Interest, if any, due at maturity.  The
Notes will be payable as to principal, interest, premium and Additional
Interest, if any, at the office or agency of the Issuers maintained for such
purpose within the City and State of New York, or, at the option of the
Issuers, payment of interest and Additional Interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to any amounts due on all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to
the Issuers or the Paying Agent. 
Notwithstanding the foregoing, if this Note is a Global Note, payment
may be made pursuant to the Applicable Procedures of the Depository as permitted
in the Indenture. Such payment shall be in such coin or currency of the 

 

1

 

United States of America as at the time of payment is
legal tender for payment of public and private debts.

 

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

 

4.             Indenture.  The Issuers issued the Notes under an
Indenture dated as of June 27, 2008 (“Indenture”) among the Issuers, the
Guarantors and the Trustee.  The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code §§ 77aaa-77bbbb).  The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. 
The Notes are unsecured senior obligations of the Issuers the aggregate
principal amount of which is unlimited.

 

5.             Optional
Redemption.

 

(a)           Except as set forth in subparagraphs (b) and
(c) of this Paragraph 5, the Issuers shall not have the option to redeem
the Notes prior to July 1, 2013.  On
or after July 1, 2013, the Issuers shall have the option to redeem the
Notes, in whole or in part at any time, upon prior notice as set forth in
Paragraph 6, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest and
Additional Interest, if any, on the Notes redeemed to the applicable redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
redemption date), if redeemed during the twelve-month period beginning on July 1
of the years indicated below:

 

	
  YEAR

  	
   

  	
  PERCENTAGE

  	
   

  
	
  2013

  	
   

  	
  104.938

  	
  %

  
	
  2014

  	
   

  	
  103.292

  	
  %

  
	
  2015

  	
   

  	
  101.646

  	
  %

  
	
  2016 and
  thereafter

  	
   

  	
  100.0000

  	
  %

  

 

(b)           Notwithstanding the provisions of
subparagraph (a) of this Paragraph 5, at any time prior to July 1,
2011, the Issuers may on any one or more occasions redeem up to 35% of the
aggregate principal amount of Notes (including any Additional Notes) issued
under the Indenture at a redemption price of 109.875% of the principal amount
thereof, plus accrued and unpaid interest and Additional Interest, if any,
thereon to the redemption date (subject to the right of Holders of record on
the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the redemption date), with the net cash proceeds of one
or more Equity Offerings; provided that, with respect to each such redemption, (i) at
least 65% of the aggregate principal amount of Notes (including any Additional
Notes) issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding any Notes held by the Company and its
Subsidiaries) and (ii) such redemption occurs within 180 days of the
date of the closing of each such Equity Offering.

 

2

 

(c)           Prior to July 1, 2013, the
Issuers may redeem all or part of the Notes upon not less than 30 nor more than
60 days’ notice, at a redemption price equal to the sum of (1) 100% of the
principal amount thereof, plus (2) accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on an interest payment date that is on or
prior to the redemption date), plus (3) the Make Whole Premium at the
redemption date.

 

6.             Notice
of Redemption.  Notice of redemption
will be mailed at least 30 days but not more than 60 days (except as otherwise
provided in the Indenture if the notice is issued in connection with a Legal
Defeasance, Covenant Defeasance or Discharge) before the redemption date to
each Holder whose Notes are to be redeemed at its registered address.  If mailed in the manner provided for in Section 3.03
of the Indenture, the notice of optional redemption shall be conclusively
presumed to have been given whether or not a Holder receives such notice.  Failure to give timely notice or any defect
in the notice shall not affect the validity of the redemption.  Notes in denominations larger than $2,000 may
be redeemed in part but only in whole multiples of $1,000 in excess of $2,000,
unless all of the Notes held by a Holder are to be redeemed.  On and after the redemption date interest and
Additional Interest, if any, cease to accrue on the Notes or portions thereof
called for redemption. The notice of redemption with respect to a redemption
described in paragraph 5(c) above need not set forth the Make Whole
Premium but only the manner of calculation thereof.

 

7.             Mandatory
Redemption.

 

Except as set forth
in Paragraph 8 below, neither of the Issuers shall be required to make
mandatory redemption or sinking fund payments with respect to the Notes or to
repurchase the Notes at the option of the Holders.

 

8.             Repurchase
at Option of Holder.

 

(a)           Within 30 days following the
occurrence of a Change of Control, the Company shall make an offer (a “Change
of Control Offer”) to repurchase all or any part (equal to $2,000 or an
integral multiple of $1,000 in excess of $2,000) of each Holder’s Notes at a
purchase price equal to 101% of the aggregate principal amount of Notes
repurchased, plus accrued and unpaid interest and Additional Interest, if any,
to the date of settlement (the “Change of Control Settlement Date”), subject to
the right of Holders of record on the relevant record date to receive interest
due on an Interest Payment Date that is on or prior to the Change of Control
Settlement Date.  Within 30 days
following a Change of Control, the Company shall mail a notice of the Change of
Control Offer to each Holder and the Trustee describing the transaction that
constitutes the Change of Control and setting forth the procedures governing
the Change of Control Offer as required by Section 4.15 of the Indenture.

 

(b)           On the 361st day after an Asset Sale
(or, at the Company’s option, any earlier date), if the aggregate amount of
Excess Proceeds then exceeds $20.0 million, the Company shall commence an offer
to all Holders of Notes (an “Asset Sale Offer”) pursuant to Section 3.09
of the Indenture, and to all holders of any Pari Passu Indebtedness then
outstanding, to purchase the maximum principal amount of Notes and such Pari
Passu Indebtedness that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the principal 

 

3

 

amount of the
Notes plus accrued and unpaid interest and Additional Interest, if any, thereon
to the date of settlement, subject to the right of Holders of record on the
relevant record date to receive interest due on an Interest Payment Date that
is on or prior to the date of settlement, in accordance with the procedures set
forth in the Indenture.  If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such remaining Excess Proceeds for any purpose not otherwise prohibited by the
Indenture.  If the aggregate principal
amount of Notes and Pari Passu Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
Pari Passu Indebtedness to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Trustee so that only Notes in
denominations of $2,000, or integral multiples of $1,000 in excess of $2,000,
shall be purchased) on the basis of the aggregate principal amount of tendered
Notes and Pari Passu Indebtedness. 
Holders of Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form entitled “Option
of Holder to Elect Purchase” on the reverse of the Notes.

 

9.             Guarantees.  The payment by the Issuers of the principal
of and interest, premium and Additional Interest, if any, on, the Notes is
fully and unconditionally guaranteed on a joint and several senior unsecured
basis by each of the Guarantors to the extent set forth in the Indenture.

 

10.           Denominations,
Transfer, Exchange.  The Notes are in
registered form without coupons in denominations of $2,000 and integral
multiples of $1,000 in excess of $2,000. 
The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture.  The Registrar
and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents, and the Company may require a
Holder to pay any taxes due on transfer or exchange.  The Issuers need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part.  Also, they need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed.

 

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

 

12.           Amendment,
Supplement and Waiver.  Subject to
certain exceptions, the Indenture or the Notes may be amended or supplemented
with the written consent of the Holders of at least a majority in principal
amount of the then outstanding Notes, and any existing default or compliance
with any provision of the Indenture or the Notes may be waived with the written
consent of the Holders of a majority in principal amount of the then
outstanding Notes.  Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or supplemented
(1) to cure any ambiguity, defect or inconsistency, (2) to provide
for uncertificated Notes in addition to or in place of certificated Notes, (3) to
provide for the assumption of an Issuer’s obligations to Holders of the Notes
pursuant to Article 5 of the Indenture, (4) to make any change that
would provide any additional rights or benefits to the Holders of the Notes or
that does not adversely affect the legal rights under the Indenture of any such
Holder, provided that any change to conform the Indenture to the Offering
Memorandum shall not be deemed to adversely affect the legal rights under the
Indenture of any Holder, (5) to secure the Notes or the 

 

4

 

Subsidiary Guarantees pursuant to Section 4.12 of the Indenture or
otherwise, (6) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in the Indenture, (7) to add any
additional Guarantor with respect to the Notes or to evidence the release of
any Guarantor from its Subsidiary Guarantee, in each case as provided in the
Indenture, (8) to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act, (9) to evidence or provide for the acceptance of appointment under
the Indenture of a successor Trustee or (10) to conform the text of the
Indenture, the Subsidiary Guarantees or the Notes to any provision described in
the “Description of Notes” contained in the Offering Memorandum.

 

13.           Defaults
and Remedies.  Events of Default
include: (i) default for 30 days in the payment when due of interest or
Additional Interest, if any, on the Notes; (ii) default in payment when
due of the principal of or premium, if any, on the Notes when due at their
Stated Maturity, upon optional redemption, upon required repurchase, upon
acceleration or otherwise; (iii) failure by the Company to comply with Section 5.01
of the Indenture or to consummate a purchase of Notes when required pursuant to
the provisions of Section 3.09, 4.10, or 4.15 of the Indenture; (iv) failure
by the Company for 90 days after notice from the Trustee or the Holders of at
least 25% in principal amount of the Notes then outstanding to comply with Section 4.03
of the Indenture; (v) failure by the Company for 60 days after notice from
the Trustee or the Holders of at least 25% in principal amount of the Notes
then outstanding to comply with any of its other agreements in the Indenture or
the Notes; (vi) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of
its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists
or is created after the Initial Issuance Date, if such 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 any grace period provided in such
Indebtedness (a “Payment Default”) or (b) results in the acceleration of
such Indebtedness prior to its Stated Maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $40.0 million or more;
provided that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 30 days from the
continuation of such default beyond the applicable grace period or the
occurrence of such acceleration, as the case may be, such Event of Default and
any consequential acceleration of the Notes shall be automatically rescinded,
so long as such rescission does not conflict with any judgment or decree; (vii) failure
by the Company or any of its Subsidiaries to pay final judgments aggregating in
excess of $40.0 million (to the extent not covered by insurance by a reputable
and creditworthy insurer as to which the insurer has not disclaimed coverage),
which judgments are not paid, discharged or stayed for a period of 60 days;
(viii)(a) any Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and
effect or (b) any Guarantor, or any Person acting on behalf of any
Guarantor, denies or disaffirms its obligations under its Subsidiary Guarantee,
except in each case, by reason of the release of such Subsidiary Guarantee in
accordance with the provisions of the Indenture; and (ix) certain events
of bankruptcy, insolvency or reorganization with respect to the Company,
Finance Corp., any of the Company’s Restricted Subsidiaries that is a
Significant Subsidiary of the Company or any group of Restricted Subsidiaries
of the Company that, taken together, would constitute a Significant 

 

5

 

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

 

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

 

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

 

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

 

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

 

6

 

18.           Removal of
Restricted Notes Legend. Each
holder of any Note evidenced by any Restricted Global Note, by its acceptance
thereof, (A) authorizes and consents to, (B) appoints the Company as
its agent for the sole purpose of delivering such electronic messages,
executing and delivering such instruments and taking such other actions, on
such holder’s behalf, as the Depository or the Trustee may require to effect,
and (C) upon the request of the Company, agrees to deliver such electronic
messages, execute and deliver such instruments and take such other actions as
the Depository or the Trustee may require, or as shall otherwise be necessary
to effect, the removal of the Restricted Notes Legend set forth on the face of
such Note (including by means of the exchange of all or the portion of such
Restricted Global Note evidencing such Note for a certificate evidencing such
Note that does not bear such Restricted Notes Legend) at any time after the
Resale Restriction Termination Date.

 

19.           Additional
Rights of Holders of Transfer Restricted Securities.  In addition to the rights provided to Holders
of the Notes under the Indenture, Holders of Transfer Restricted Securities
shall have all the rights set forth in the Registration Rights Agreement dated
as of June 27, 2008, among the Issuers, the Guarantors and the Initial
Purchasers (the “Registration Rights Agreement.”

 

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

 

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

 

22.           Successors.  In the event a successor assumes all the
obligations of an Issuer under the Notes and the Indenture, pursuant to the
terms thereof, such Issuer will be released from all such obligations.

 

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

 

Linn Energy, LLC

600 Travis, Suite 5100

Houston, Texas
77002

Attention: Chief
Financial Officer

 

7

 

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 Issuers.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  Sign exactly
  as your name appears on the other side of this Note.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature must be guaranteed)

  	
   

  	
   

  
							

 

Signatures must be guaranteed by an “eligible guarantor institution”
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

 

 

[Includes the following only if
the Restricted Notes Legend is included hereon]

 

[In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to one year after the later of the date of original
issuance of such Notes and the last date, if any, on which such Notes were
owned by the Company or any Affiliate of the Company (or, in the case of
Regulation S Notes, prior to the expiration of the Distribution Compliance
Period), the undersigned confirms that such Notes are being transferred in
accordance with their terms:

 

CHECK ONE BOX BELOW

 

(1)                                  o            to an Issuer or any
Subsidiary thereof; or

 

(2)                                  o            pursuant to an
effective registration statement under the Securities Act of 1933; or

 

(3)                                  o            to a person who the undersigned reasonably
believes is a “qualified institutional buyer” (as defined in Rule 144A
under the Securities Act of 1933) that is purchasing for its own account or for
the account of a 

 

8

 

qualified
institutional buyer to whom notice is given that such transfer is being made in
reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or

 

(4)                                  o            pursuant to offers and
sales to non-U.S. persons that occur outside the United States within the
meaning of Regulation S under the Securities Act in compliance with Rule 904
under the Securities Act of 1933;

 

(5)                                  o            pursuant to another
exemption from registration under the Securities Act; or

 

(5)                                  o            pursuant to another
exemption from registration under the Securities Act of 1933.

 

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

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature            ]

  

 

9

 

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

 

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

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Notice: To be executed by an executive
  officer

  

 

10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

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

 

	
   

  	
  o  Section 4.10

  	
  o  Section 4.15

  

 

If you want to elect
to have only part of this Note purchased by the Company pursuant to Section 4.10
or Section 4.15 of the Indenture, state the amount (in minimum
denomination of $2,000 or integral multiples of $1,000 in excess of $2,000) you
elect to have purchased:  $                         

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the other side of this Note)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Soc. Sec. or
  Tax Identification No.: 

  	
   

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
  (signature
  must be guaranteed)

  	
   

  
								

 

Signatures
must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

 

11

 

[TO BE ATTACHED TO GLOBAL NOTE]

 

SCHEDULE A

 

SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL NOTE

 

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

 

	
  Date

  	
   

  	
  Amount of

  decrease in 

  Principal 

  Amount of this 

  Global Note

  	
   

  	
  Amount of 

  increase in 

  Principal 

  Amount of this 

  Global Note

  	
   

  	
  Principal 

  Amount of this 

  Global Note 

  following such 

  decrease or 

  increase

  	
   

  	
  Signature of 

  authorized 

  officer

  of Trustee or

  Notes Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

12

 

EXHIBIT 2
TO RULE 144A/REGULATION S APPENDIX

 

[FORM OF FACE OF
EXCHANGE NOTE

OR PRIVATE EXCHANGE NOTE]       */**/

 

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

 

**/ If the Note is a Private
Exchange Note issued in a Private Exchange to an Initial Purchaser holding an
unsold portion of its initial allotment, add the Restricted Notes Legend from Exhibit 1
to Rule 144A/Regulation S Appendix and replace the Assignment Form included
in this Exhibit 2 with the Assignment Form included in such Exhibit 1.

 

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

 

1

 

[FORM OF
FACE OF EXCHANGE NOTE OR

PRIVATE EXCHANGE NOTE]

 

LINN ENERGY, LLC.

 

LINN ENERGY FINANCE CORP.

 

	
  No. [   ]

  	
   

  	
  $

  

 

CUSIP No. [            ]

ISIN No. [            ]

 

97/8% Senior Note due 2018

 

Linn
Energy, LLC, a Delaware limited liability company, and Linn Energy Finance
Corp., a Delaware corporation, jointly and severally promise to pay to
                    ,
or registered assigns, the principal sum of
                    
Dollars on July 1, 2018 [or such greater or lesser amount as may be
indicated on Schedule A hereto].(2)

 

Interest
Payment Dates:  January 1 and July 1

 

Record
Dates:  December 15 and June 15

 

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

 

 

	
   

  	
   

  	
   

  	
  LINN ENERGY, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  LINN ENERGY FINANCE CORP.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
								

 

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

 

1

 

TRUSTEE’S
CERTIFICATE OF

AUTHENTICATION

 

U.S.
BANK NATIONAL ASSOCIATION,

as Trustee, certifies that

this is one of the Notes

referred to in the
Indenture.

 

 

	
  By

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  

 

2

 

[FORM OF REVERSE SIDE
OF EXCHANGE NOTE OR

 

PRIVATE EXCHANGE NOTE]

 

97/8% Senior Note
due 2018

 

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

 

1.             Interest.  Linn Energy,
LLC, a Delaware limited liability company (the “Company”), and Linn Energy
Finance Corp., a Delaware corporation (the “Finance Corp.” and, together with
the Company, the “Issuers”), jointly and severally promise to pay interest on
the principal amount of this Note at 97/8% per annum from June 27, 2008 until
maturity and shall pay Additional Interest payable pursuant to Section 5
of the Registration Rights Agreement referred to below.  The Issuers will pay interest and Additional
Interest, if any, semi-annually in arrears on January 1 and July 1 of
each year (each an “Interest Payment Date”), commencing January 1,
2009.  If an Interest Payment Date falls
on a day that is not a Business Day, the interest payment to be made on such
Interest Payment Date will be made on the next succeeding Business Day with the
same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue solely as a result of such delayed payment.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of original
issuance; provided that if there is no existing Default or Event of Default in
the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date, except
in the case of the original issuance of Notes, in which case interest shall
accrue from the date of authentication. 
The Issuers shall pay (i) interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% higher than
the then applicable interest rate on the Notes and (ii) interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Additional Interest (without regard to
any applicable grace periods) from time to time on demand at the same rate to
the extent lawful.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

 

2.             Method of Payment.  The Issuers
will pay interest on the Notes (except defaulted interest) and Additional
Interest to the Persons who are registered Holders of Notes at the close of
business on the December 15 or June 15 next preceding the Interest
Payment Date, even if such Notes are cancelled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.11 of
the Indenture with respect to defaulted interest.  Holders must surrender Notes to the Paying
Agent to collect payments of principal and premium, if any, together with
accrued and unpaid interest and Additional Interest, if any, due at
maturity.  The Notes will be payable as
to principal, interest, premium and Additional Interest, if any, at the office
or agency of the Issuers maintained for such purpose within the City and State
of New York, or, at the option of the Issuers, payment of interest and
Additional Interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders, and provided that payment by
wire transfer of immediately available funds will be required with respect to
any amounts due on all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Issuers or the Paying
Agent.  Notwithstanding the foregoing, if

 

3

 

this Note is a Global
Note, payment may be made pursuant to the Applicable Procedures of the
Depository as permitted in the Indenture. 
Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.

 

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

 

4.             Indenture.  The Issuers
issued the Notes under an Indenture dated as of June 27, 2008 (“Indenture”)
among the Issuers, the Guarantors and the Trustee.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms.  The Notes are unsecured senior
obligations of the Issuers the aggregate principal amount of which is
unlimited.

 

5.             Optional Redemption.

 

(a)           Except
as set forth in subparagraphs (b) and (c) of this Paragraph 5, the
Issuers shall not have the option to redeem the Notes prior to July 1,
2013.  On or after July 1, 2013, the
Issuers shall have the option to redeem the Notes, in whole or in part at any
time, upon prior notice as set forth in Paragraph 6, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest and Additional Interest, if any, on the Notes redeemed
to the applicable redemption date (subject to the right of Holders of record on
the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the redemption date), if redeemed during the
twelve-month period beginning on March 1 of the years indicated below:

 

	
  YEAR

  	
   

  	
  PERCENTAGE

  	
   

  
	
  2013

  	
   

  	
  104.938

  	
  %

  
	
  2014

  	
   

  	
  103.292

  	
  %

  
	
  2015

  	
   

  	
  101.646

  	
  %

  
	
  2016 and thereafter

  	
   

  	
  100.0000

  	
  %

  

 

(b)           Notwithstanding
the provisions of subparagraph (a) of this Paragraph 5, at any time prior
to July 1, 2011, the Issuers may on any one or more occasions redeem up to
35% of the aggregate principal amount of Notes (including any Additional Notes)
issued under the Indenture at a redemption price of 109.875% of the principal
amount thereof, plus accrued and unpaid interest and Additional Interest, if
any, thereon to the redemption date (subject to the right of Holders of record
on the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the redemption date), with the net cash proceeds of one
or more Equity Offerings; provided that, with respect to each such redemption, (i) at
least 65% of the aggregate principal amount of Notes (including any Additional
Notes) issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding any Notes held by 

 

4

 

the Company
and its Subsidiaries) and (ii) such redemption occurs within 180 days
of the date of the closing of such Equity Offering.

 

(c)           Prior to July 1, 2013,
the Issuers may redeem all or part of the Notes upon not less than 30 nor more
than 60 days’ notice, at a redemption price equal to the sum of (1) 100%
of the principal amount thereof, plus (2) accrued and unpaid interest, if
any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on an interest payment date that
is on or prior to the redemption date), plus (3) the Make Whole Premium at
the redemption date.

 

6.             Notice of Redemption.  Notice of
redemption will be mailed at least 30 days but not more than 60 days (except as
otherwise provided in the Indenture if the notice is issued in connection with
a Legal Defeasance, Covenant Defeasance or Discharge) before the redemption
date to each Holder whose Notes are to be redeemed at its registered
address.  If mailed in the manner
provided for in Section 3.03 of the Indenture, the notice of optional
redemption shall be conclusively presumed to have been given whether or not a
Holder receives such notice.  Failure to
give timely notice or any defect in the notice shall not affect the validity of
the redemption.  Notes in denominations
larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000 in excess of $2,000, unless all of the Notes held by a Holder are to be
redeemed.  On and after the redemption
date interest and Additional Interest, if any, cease to accrue on the Notes or
portions thereof called for redemption. The notice of redemption with respect
to a redemption described in paragraph 5(c) above need not set forth the
Make Whole Premium but only the manner of calculation thereof.

 

7.             Mandatory Redemption. Except as set forth in Paragraph 8
below, neither of the Issuers shall be required to make mandatory redemption or
sinking fund payments with respect to the Notes or to repurchase the Notes at
the option of the Holders.

 

8.             Repurchase at Option of Holder.

 

(a)           Within
30 days following the occurrence of a Change of Control, the Company shall make
an offer (a “Change of Control Offer”) to repurchase all or any part (equal to
$2,000 or an integral multiple of $1,000 in excess of $2,000) of each Holder’s
Notes at a purchase price equal to 101% of the aggregate principal amount of
Notes repurchased, plus accrued and unpaid interest and Additional Interest, if
any, to the date of settlement (the “Change of Control Settlement Date”),
subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Change of Control Settlement Date. 
Within 30 days following a Change of Control, the Company shall mail a
notice of the Change of Control Offer to each Holder and the Trustee describing
the transaction that constitutes the Change of Control and setting forth the
procedures governing the Change of Control Offer as required by Section 4.15
of the Indenture.

 

(b)           On
the 361st day after an Asset Sale (or, at the Company’s option, any earlier
date), if the aggregate amount of Excess Proceeds then exceeds $20.0 million,
the Company shall commence an offer to all Holders of Notes (an “Asset Sale
Offer”) pursuant to Section 3.09 of the Indenture, and to all holders of
any Pari Passu Indebtedness then outstanding, to purchase the maximum principal
amount of Notes and such Pari Passu Indebtedness that may be purchased 

 

5

 

out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount of the Notes plus accrued and unpaid interest and Additional
Interest, if any, thereon to the date of settlement, subject to the right of
Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the date of settlement, in
accordance with the procedures set forth in the Indenture.  If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such remaining Excess
Proceeds for any purpose not otherwise prohibited by the Indenture.  If the aggregate principal amount of Notes
and Pari Passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and Pari Passu
Indebtedness to be purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Trustee so that only Notes in denominations of
$2,000, or integral multiples of $1,000 in excess of $2,000, shall be
purchased) on the basis of the aggregate principal amount of tendered Notes and
Pari Passu Indebtedness.  Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Notes.

 

9.             Guarantees.  The payment
by the Issuers of the principal of and interest, premium and Additional
Interest, if any, on, the Notes is fully and unconditionally guaranteed on a
joint and several senior unsecured basis by each of the Guarantors to the
extent set forth in the Indenture.

 

10.           Denominations, Transfer, Exchange. 
The Notes are in registered form without coupons in denominations of
$2,000 and integral multiples of $1,000 in excess of $2,000.  The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents, and the Company may require a Holder to pay any taxes due on
transfer or exchange.  The Issuers need
not exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed in
part.  Also, they need not exchange or
register the transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed.

 

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

 

12.           Amendment, Supplement and Waiver. 
Subject to certain exceptions, the Indenture or the Notes may be amended
or supplemented with the written consent of the Holders of at least a majority
in principal amount of the then outstanding Notes, and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the written consent of the Holders of a majority in principal amount of the
then outstanding Notes.  Without the
consent of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented (1) to cure any ambiguity, defect or inconsistency, (2) to
provide for uncertificated Notes in addition to or in place of certificated
Notes, (3) to provide for the assumption of an Issuer’s obligations to
Holders of the Notes pursuant to Article 5 of the Indenture, (4) to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, provided that any change to conform the Indenture
to the Offering Memorandum shall not be deemed to 

 

6

 

adversely affect the legal rights under the Indenture
of any Holder, (5) to secure the Notes or the Subsidiary Guarantees
pursuant to Section 4.12 of the Indenture or otherwise, (6) to
provide for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, (7) to add any additional Guarantor with
respect to the Notes or to evidence the release of any Guarantor from its
Subsidiary Guarantee, in each case as provided in the Indenture, (8) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, (9) to
evidence or provide for the acceptance of appointment under the Indenture of a
successor Trustee or (10) to conform the text of the Indenture, the
Subsidiary Guarantees or the Notes to any provision described in the “Description
of Notes” contained in the Offering Memorandum.

 

13.           Defaults and Remedies.  Events of
Default include: (i) default for 30 days in the payment when due of
interest or Additional Interest, if any, on the Notes; (ii) default in
payment when due of the principal of or premium, if any, on the Notes when due
at their Stated Maturity, upon optional redemption, upon required repurchase,
upon acceleration or otherwise; (iii) failure by the Company to comply
with Section 5.01 of the Indenture or to consummate a purchase of Notes
when required pursuant to the provisions of Section 3.09, 4.10 or 4.15 of
the Indenture; (iv) failure by the Company for 90 days after notice from
the Trustee or the Holders of at least 25% in principal amount of the Notes
then outstanding to comply with Section 4.03 of the Indenture; (v) failure
by the Company for 60 days after notice from the Trustee or the Holders of at
least 25% in principal amount of the Notes then outstanding to comply with any
of its other agreements in the Indenture or the Notes; (vi) default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the Initial Issuance
Date, if such 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 any
grace period provided in such Indebtedness (a “Payment Default”) or (b) results
in the acceleration of such Indebtedness prior to its Stated Maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$40.0 million or more; provided that if any such default is cured or waived or
any such acceleration rescinded, or such Indebtedness is repaid, within a
period of 30 days from the continuation of such default beyond the applicable
grace period or the occurrence of such acceleration, as the case may be, such
Event of Default and any consequential acceleration of the Notes shall be
automatically rescinded, so long as such rescission does not conflict with any
judgment or decree; (vii) failure by the Company or any of its
Subsidiaries to pay final judgments aggregating in excess of $40.0 million (to
the extent not covered by insurance by a reputable and creditworthy insurer as
to which the insurer has not disclaimed coverage), which judgments are not
paid, discharged or stayed for a period of 60 days; (viii) (a) any
Subsidiary Guarantee is held in any judicial proceeding to be unenforceable or
invalid or ceases for any reason to be in full force and effect or (b) any
Guarantor, or any Person acting on behalf of any Guarantor, denies or
disaffirms its obligations under its Subsidiary Guarantee, except in each case,
by reason of the release of such Subsidiary Guarantee in accordance with the
provisions of the Indenture; and (ix) certain events of bankruptcy,
insolvency or reorganization with respect to the Company, Finance Corp., any of
the Company’s Restricted Subsidiaries that is a Significant Subsidiary of the
Company or any group of 

 

7

 

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

 

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

 

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

 

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

 

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

 

8

 

18.           Removal of Restricted Notes Legend. Each holder of any Note evidenced by
any Restricted Global Note, by its acceptance thereof, (A) authorizes and
consents to, (B) appoints the Company as its agent for the sole purpose of
delivering such electronic messages, executing and delivering such instruments
and taking such other actions, on such holder’s behalf, as the Depository or
the Trustee may require to effect, and (C) upon the request of the
Company, agrees to deliver such electronic messages, execute and deliver such
instruments and take such other actions as the Depository or the Trustee may
require, or as shall otherwise be necessary to effect, the removal of the
Restricted Notes Legend set forth on the face of such Note (including by means of the exchange of
all or the portion of such Restricted Global Note evidencing such Note for a
certificate evidencing such Note that does not bear such Restricted Notes
Legend) at any time after the Resale Restriction Termination Date.

 

19.           [Additional Rights of Holders of Transfer
Restricted Securities.  In addition
to the rights provided to Holders of the Notes under the Indenture, Holders of
Transfer Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement dated as of June 27, 2008, among the
Issuers, the Guarantors and the Initial Purchasers (the “Registration Rights
Agreement”).](3)

 

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

 

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

 

22.           Successors.  In the event
a successor assumes all the obligations of an Issuer under the Notes and the
Indenture, pursuant to the terms thereof, such Issuer will be released from all
such obligations.

 

The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture [or any Registration Rights
Agreement](4).  Requests may be made to:

 

Linn Energy, LLC

600 Travis, Suite 5100

Houston, Texas
77002

Attention: Chief
Financial Officer

 

(3) Delete if this Note is not being issued in
exchange for an Initial Note.

 

(4) Delete if this Note is not being issued in exchange for an
Initial Note.

 

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 Issuers.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Sign exactly as your name appears on the
  other side of this Note.

  
						

 

Signatures must be guaranteed by
an “eligible guarantor institution” meeting the requirements of the Registrar,
which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

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

 

o

 

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

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the
  other side of this Note)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Soc. Sec. or Tax Identification No.:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
     (Signature must be
  guaranteed)

  	
   

  
										

 

Signatures must
be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

 

11

 

ANNEX A

 

	
   

  
	
   

  

LINN ENERGY, LLC

 

LINN ENERGY FINANCE CORP.

 

and

 

the Guarantors named herein

 

 

[      ]% SENIOR
NOTES DUE 2018

 

FORM OF SUPPLEMENTAL INDENTURE

 

 DATED AS
OF
                        
    ,

 

 

U.S. BANK NATIONAL ASSOCIATION

 

Trustee

 

 

	
   

  

 

A-1

 

This SUPPLEMENTAL
INDENTURE, dated as of
                      
    ,          is
among Linn Energy, LLC, a Delaware limited liability company (the “Company”),
Linn Energy Finance Corp., a Delaware corporation ( “Finance Corp.” and,
together with the Company, the “Issuers”), each of the parties identified under
the caption “Guarantors” on the signature page hereto (the “Guarantors”)
and U.S. Bank National Association, a national banking association, as Trustee.

 

RECITALS

 

WHEREAS, the Issuers,
the initial Guarantors and the Trustee entered into an Indenture, dated as of June 27,
2008 (the “Indenture”), pursuant to which the Company has issued $255,927,000
in principal amount of 97/8% Senior Notes due 2018 (the “Notes”);

 

WHEREAS, Section 9.01(g) of
the Indenture provides that the Issuers, the Guarantors and the Trustee may
amend or supplement the Indenture in order to comply with Section 4.13 or
10.02 thereof, without the consent of the Holders of the Notes; and

 

WHEREAS, all acts and
things prescribed by the Indenture, by law and by the Certificate of
Incorporation and the Bylaws (or comparable constituent documents) of the
Issuers, of the Guarantors and of the Trustee necessary to make this
Supplemental Indenture a valid instrument legally binding on the Issuers, the
Guarantors and the Trustee, in accordance with its terms, have been duly done
and performed;

 

NOW, THEREFORE, to
comply with the provisions of the Indenture and in consideration of the above
premises, the Issuers, the Guarantors and the Trustee covenant and agree for
the equal and proportionate benefit of the respective Holders of the Notes as
follows:

 

ARTICLE 1

 

Section 1.01.          This Supplemental Indenture is
supplemental to the Indenture and does and shall be deemed to form a part of,
and shall be construed in connection with and as part of, the Indenture for any
and all purposes.

 

Section 1.02.          This Supplemental Indenture shall
become effective immediately upon its execution and delivery by each of the
Issuers, the Guarantors and the Trustee.

 

ARTICLE 2

 

From this date, in
accordance with Section 4.13 or 10.02 and by executing this Supplemental
Indenture, the Guarantors whose signatures appear below are subject to the
provisions of the Indenture to the extent provided for in Article 10
thereunder.

 

ARTICLE 3

 

Section 3.01.          Except as specifically modified
herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in
full force and effect in accordance with their terms with all capitalized terms
used herein without definition having the same respective meanings ascribed to
them as in the Indenture.

 

A-2

 

Section 3.02.          Except as otherwise expressly provided
herein, no duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this Supplemental
Indenture.  This Supplemental Indenture
is executed and accepted by the Trustee subject to all the terms and conditions
set forth in the Indenture with the same force and effect as if those terms and
conditions were repeated at length herein and made applicable to the Trustee
with respect hereto.

 

Section 3.03.          THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

 

Section 3.04.          The
parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but
all of such executed copies together shall represent the same agreement.

 

[NEXT PAGE IS SIGNATURE PAGE]

 

A-3

 

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

 

	
   

  	
   

  	
   

  	
   

  	
  LINN ENERGY,
  LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  LINN ENERGY
  FINANCE CORP.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  GUARANTORS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [                                                                                                 ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
   

  	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
																		

 

A-4

 

ANNEX B

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

See attached.

 

B-1

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