Document:

Exhibit 4.1

 

 

 

POGO PRODUCING COMPANY

 

6.625% Senior Subordinated Notes due
2015

 

 

INDENTURE

 

dated as of March 29, 2005

 

 

THE BANK OF NEW YORK TRUST COMPANY,
N.A.,

 

as Trustee

 

 

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE I

  
	
   

  
	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  
	
  Section
  1.2

  	
  Other
  Definitions

  
	
  Section
  1.3

  	
  Incorporation
  by Reference of Trust Indenture Act

  
	
  Section
  1.4

  	
  Rules
  of Construction

  
	
   

  	
   

  
	
  ARTICLE
  II

  
	
   

  	
   

  
	
  THE SECURITIES

  
	
   

  	
   

  
	
  Section
  2.1

  	
  Form
  and Dating

  
	
  Section
  2.2

  	
  Execution
  and Authentication

  
	
  Section
  2.3

  	
  Registrar
  and Paying Agent

  
	
  Section
  2.4

  	
  Paying
  Agent To Hold Money in Trust

  
	
  Section
  2.5

  	
  Holder
  Lists

  
	
  Section
  2.6

  	
  Transfer
  and Exchange

  
	
  Section
  2.7

  	
  Replacement
  Securities

  
	
  Section
  2.8

  	
  Outstanding
  Securities

  
	
  Section
  2.9

  	
  Temporary
  Securities

  
	
  Section
  2.10

  	
  Cancellation

  
	
  Section
  2.11

  	
  Defaulted
  Interest

  
	
  Section
  2.12

  	
  CUSIP
  Numbers

  
	
   

  	
   

  
	
  ARTICLE
  III

  
	
   

  	
   

  
	
  REDEMPTION

  
	
   

  	
   

  
	
  Section
  3.1

  	
  Notices
  to Trustee

  
	
  Section
  3.2

  	
  Selection
  of Securities To Be Redeemed

  
	
  Section
  3.3

  	
  Notice
  of Redemption

  
	
  Section
  3.4

  	
  Effect
  of Notice of Redemption

  
	
  Section
  3.5

  	
  Deposit
  of Redemption Price

  
	
  Section
  3.6

  	
  Securities
  Redeemed in Part

  
	
  Section
  3.7

  	
  Optional
  Redemption

  
	
   

  	
   

  
	
  ARTICLE
  IV

  
	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  
	
  Section
  4.1

  	
  Payment of Securities

  
	
  Section
  4.2

  	
  SEC
  Reports

  
	
  Section
  4.3

  	
  Limitation
  on Indebtedness

  
	
  Section
  4.4

  	
  Limitation
  on Restricted Payments

  

 

i

 

	
  Section
  4.5

  	
  Limitation
  on Layering

  
	
  Section
  4.6

  	
  Limitation
  on Liens

  
	
  Section
  4.7

  	
  Limitation
  on Restrictions on Distributions from Restricted Subsidiaries

  
	
  Section
  4.8

  	
  Limitation
  on Sales of Assets and Subsidiary Stock

  
	
  Section
  4.9

  	
  Limitation
  on Affiliate Transactions

  
	
  Section
  4.10

  	
  Limitation
  on Sale of Capital Stock of Restricted Subsidiaries

  
	
  Section
  4.11

  	
  Future
  Subsidiary Guarantees

  
	
  Section
  4.12

  	
  Maintenance
  of Properties; Insurance

  
	
  Section
  4.13

  	
  Payments
  for Consent

  
	
  Section
  4.14

  	
  Change
  of Control

  
	
  Section
  4.15

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

  
	
  Section
  4.16

  	
  Appointment
  to Fill a Vacancy in the Office of Trustee

  
	
  Section
  4.17

  	
  Provision
  as to Paying Agent

  
	
  Section
  4.18

  	
  Maintenance
  of Corporate Existence

  
	
  Section
  4.19

  	
  Compliance
  Certificate

  
	
  Section
  4.20

  	
  Taxes

  
	
  Section
  4.21

  	
  Stay,
  Extension and Usury Laws

  
	
  Section
  4.22

  	
  Further
  Instruments and Acts

  
	
  Section
  4.23

  	
  Effectiveness
  of Covenants

  
	
   

  	
   

  
	
  ARTICLE
  V

  
	
   

  	
   

  
	
  SUCCESSOR COMPANY

  
	
   

  	
   

  
	
  Section
  5.1

  	
  Merger
  and Consolidation

  
	
   

  	
   

  
	
  ARTICLE
  VI

  
	
   

  	
   

  
	
  DEFAULTS AND REMEDIES

  
	
   

  	
   

  
	
  Section
  6.1

  	
  Events
  of Default

  
	
  Section
  6.2

  	
  Acceleration
  of Maturity; Rescission and Annulment

  
	
  Section
  6.3

  	
  Other
  Remedies

  
	
  Section
  6.4

  	
  Waiver
  of Past Defaults

  
	
  Section
  6.5

  	
  Control
  by Majority

  
	
  Section
  6.6

  	
  Limitation
  on Suits

  
	
  Section
  6.7

  	
  Rights
  of Holders to Receive Payment

  
	
  Section
  6.8

  	
  Collection
  Suit by Trustee

  
	
  Section
  6.9

  	
  Trustee
  May File Proofs of Claim

  
	
  Section
  6.10

  	
  Priorities

  
	
  Section
  6.11

  	
  Undertaking
  for Costs

  

 

ii

 

	
  ARTICLE
  VII

  
	
   

  	
   

  
	
  TRUSTEE

  
	
   

  	
   

  
	
  Section
  7.1

  	
  Duties
  of Trustee

  
	
  Section
  7.2

  	
  Rights
  of Trustee

  
	
  Section
  7.3

  	
  Individual
  Rights of Trustee

  
	
  Section
  7.4

  	
  Trustee’s
  Disclaimer

  
	
  Section
  7.5

  	
  Notice
  of Defaults

  
	
  Section
  7.6

  	
  Reports
  by Trustee to Holders

  
	
  Section
  7.7

  	
  Compensation
  and Indemnity

  
	
  Section
  7.8

  	
  Replacement
  of Trustee

  
	
  Section
  7.9

  	
  Successor
  Trustee by Merger

  
	
  Section
  7.10

  	
  Eligibility;
  Disqualification

  
	
  Section
  7.11

  	
  Preferential
  Collection of Claims Against Company

  
	
   

  	
   

  
	
  ARTICLE
  VIII

  
	
   

  	
   

  
	
  DISCHARGE OF
  INDENTURE; DEFEASANCE

  
	
   

  	
   

  
	
  Section
  8.1

  	
  Discharge
  of Liability on Securities; Defeasance

  
	
  Section
  8.2

  	
  Conditions
  to Defeasance

  
	
  Section
  8.3

  	
  Application
  of Trust Money

  
	
  Section
  8.4

  	
  Repayment
  to Company

  
	
  Section
  8.5

  	
  Indemnity
  for U.S. Government Obligations

  
	
  Section
  8.6

  	
  Reinstatement

  
	
   

  	
   

  
	
  ARTICLE
  IX

  
	
   

  	
   

  
	
  AMENDMENTS

  
	
   

  	
   

  
	
  Section
  9.1

  	
  Without
  Consent of Holders

  
	
  Section
  9.2

  	
  With
  Consent of Holders

  
	
  Section
  9.3

  	
  Compliance
  with Trust Indenture Act

  
	
  Section
  9.4

  	
  Revocation
  and Effect of Consents and Waivers

  
	
  Section
  9.5

  	
  Notation
  on or Exchange of Securities

  
	
  Section
  9.6

  	
  Trustee
  To Sign Amendments

  
	
   

  	
   

  
	
  ARTICLE
  X

  
	
   

  	
   

  
	
  SUBORDINATION OF SECURITIES

  
	
   

  	
   

  
	
  Section
  10.1

  	
  Securities
  Subordinate to Senior Indebtedness

  
	
  Section
  10.2

  	
  Liquidation,
  Dissolution and Bankruptcy of Company

  
	
  Section
  10.3

  	
  Suspension
  of Payment When Designated Senior Indebtedness in Default

  
	
  Section
  10.4

  	
  Subrogation
  to Rights of Holders of Senior Indebtedness

  

 

iii

 

	
  Section
  10.5

  	
  Provisions
  Solely to Define Relative Rights

  
	
  Section
  10.6

  	
  Trustee
  to Effectuate Subordination

  
	
  Section
  10.7

  	
  No
  Waiver of Subordination Provisions

  
	
  Section
  10.8

  	
  Notice
  to Trustee

  
	
  Section
  10.9

  	
  Reliance
  on Judicial Order or Certificate of Liquidating Agent

  
	
  Section
  10.10

  	
  Trustee
  Not Fiduciary for Holders of Senior Indebtedness

  
	
  Section
  10.11

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

  
	
   

  	
   

  
	
  ARTICLE
  XI

  
	
   

  	
   

  
	
  SUBSIDIARY GUARANTEE

  
	
   

  	
   

  
	
  Section
  11.1

  	
  Subsidiary
  Guarantee

  
	
  Section
  11.2

  	
  Limitation
  on Liability

  
	
  Section
  11.3

  	
  Execution
  and Delivery of Notation of Subsidiary Guarantee

  
	
  Section
  11.4

  	
  Successors
  and Assigns; Releases

  
	
  Section
  11.5

  	
  No
  Waiver

  
	
  Section
  11.6

  	
  Right
  of Contribution

  
	
  Section
  11.7

  	
  No
  Subrogation

  
	
  Section
  11.8

  	
  Modification

  
	
  Section
  11.9

  	
  Subordination

  
	
   

  	
   

  
	
  ARTICLE
  XII

  
	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  Section
  12.1

  	
  Trust
  Indenture Act Controls

  
	
  Section
  12.2

  	
  Notices

  
	
  Section
  12.3

  	
  Communication
  by Holders with other Holders

  
	
  Section
  12.4

  	
  Certificate
  and Opinion as to Conditions Precedent

  
	
  Section
  12.5

  	
  Statements
  Required in Certificate or Opinion

  
	
  Section
  12.6

  	
  When
  Securities Disregarded

  
	
  Section
  12.7

  	
  Legal
  Holidays

  
	
  Section
  12.8

  	
  Governing
  Law

  
	
  Section
  12.9

  	
  No
  Personal Liability of Directors, Officers, Employees and Shareholders

  
	
  Section
  12.10

  	
  Successors

  
	
  Section
  12.11

  	
  Multiple
  Originals; Counterparts

  
	
  Section
  12.12

  	
  Severability

  
	
  Section
  12.13

  	
  Consent
  to Jurisdiction

  
	
  Section
  12.14

  	
  Table
  of Contents; Headings

  
	
  Section
  12.15

  	
  No
  Adverse Interpretation of Other Agreements

  

 

iv

 

	
  EXHIBITS AND SCHEDULE

  
	
   

  	
   

  
	
  Exhibit A – Form of Note

  
	
  Exhibit B –
  Form of Certificate of Transfer

  
	
  Exhibit C – Form of Certificate of Exchange

  
	
  Exhibit D – Form of Certificate From
  Acquiring Institutional Accredited Investor

  
	
  Exhibit E – Form of Notation of Subsidiary
  Guarantee

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

  
	
   

  
	
  Schedule I
  - Cash Equivalent Investments

  

 

v

 

THIS
INDENTURE, dated as of March 29, 2005, is between Pogo Producing Company, a
Delaware corporation (the “Company”), and The Bank of New York Trust Company,
N.A., a national banking association, as trustee (the “Trustee”).

 

Each
party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of the Company’s 6.625% Senior Subordinated
Notes due 2015 issued on the date hereof (the “Initial
Securities”), the Holders of Additional Securities (as defined
herein) and, if and when issued in exchange for the Initial Securities or any
Additional Securities as provided in a Registration Rights Agreement (as
hereinafter defined), the Company’s 6.625% Senior Subordinated Notes due 2015
provided in exchange for such Initial Securities or Additional Securities (as
defined herein):

 

ARTICLE I

 

DEFINITIONS
AND INCORPORATION BY REFERENCE

 

Section 1.1                                      Definitions

 

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

 

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

 

(1)                                  the
sum of:

 

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

 

(i)                                     estimated
proved crude oil and natural gas reserves of the Company and its Restricted
Subsidiaries attributable to acquisitions consummated since the date of such
year-end reserve report, and

 

(ii)                                  estimated
crude oil and natural gas reserves of the Company and its Restricted
Subsidiaries attributable to extensions, discoveries and other additions and
upward determinations of estimates of proved crude oil and natural gas reserves
(including previously estimated development costs incurred during the period
and the accretion of discount since the prior year end) due to exploration, 

 

 

development or exploitation, production or other
activities, which reserves were not reflected in such year-end reserve report,

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

(a)                                  minority
interests;

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

“Additional Assets”
means:

 

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

 

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

 

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

 

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

 

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

 

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

 

“Affiliate”
of any specified Person means any other Person, directly or indirectly,
controlling or controlled by or under direct or indirect common control with
such specified Person. For the purposes of this definition, “control” when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing; provided,
however, that beneficial ownership of 10% or more of the Voting
Stock of a Person shall be deemed to be control.  No Person shall be deemed an Affiliate of an
oil and gas royalty trust solely by virtue of ownership of units of beneficial
interest in such trust.

 

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

 

“Applicable Premium” means, with respect to
a Security at any time, the greater of (1) 1.0% of the principal amount of such
Security at such time and (2) the excess, if any, of (A) the present value at
such time of (i) the principal amount of such Security plus (ii) any required
interest payments due on such Security through March 15, 2010, computed using a
discount rate equal to the Treasury Rate plus 50 basis points, discounted
semi-annually over (B) the principal amount of such Security.

 

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

 

“Asset Disposition”
means any direct or indirect sale, lease (other than an operating lease entered
into in the ordinary course of business), transfer, issuance or other
disposition, or a series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan, of 

 

4

 

shares of Capital Stock of a Subsidiary (other than
directors’ qualifying shares), property or other assets (each referred to for
the purposes of this definition as a “disposition”) by the Company or any of
its Restricted Subsidiaries, including any disposition by means of a merger,
consolidation or similar transaction.

 

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

 

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

 

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

 

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

 

(4)                                  transactions
permitted under Section 5.1;

 

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

 

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

 

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

 

(8)                                  dispositions
of assets in a single transaction or series of related transactions with an aggregate
fair market value in any calendar year of less than $25 million;

 

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

 

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

 

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

 

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

 

5

 

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

 

(14)                            foreclosure
on assets.

 

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

 

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

 

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

 

“B8/32 Partners” means B8/32 Partners,
Ltd., a corporation organized under the laws of the Kingdom of Thailand,
approximately 46% of the Capital Stock in which is held by the Company on the
Issue Date.

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

“Cash Equivalents”
means:

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

“Change of Control”
means:

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

(1)                                  if
the Company or any Restricted Subsidiary:

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

(1)                                  Consolidated
Interest Expense;

 

(2)                                  Consolidated
Income Taxes;

 

(3)                                  consolidated
depletion and depreciation expense;

 

(4)                                  consolidated
exploration expense;

 

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

 

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

 

and less, to the extent
included in calculating such Consolidated Net Income and in excess of any costs
or expenses attributable thereto and deducted in calculating such Consolidated
Net Income, the sum of (x) the amount of deferred revenues that are amortized
during such period and are attributable to reserves that are subject to
volumetric Production Payments, and (y) amounts recorded in accordance with
GAAP as repayments of principal and interest pursuant to dollar-denominated
Production Payments.  Notwithstanding the
preceding sentence, clauses (2) through (5) relating to amounts of a Restricted
Subsidiary will be added to Consolidated Net Income to compute Consolidated EBITDA
only to the extent (and in the same proportion) that the net income (loss) of
such Restricted Subsidiary was included in calculating the Consolidated Net
Income and, to the extent the amounts set forth in clauses (2) through (5) are
in excess of those necessary to offset a net loss of such Restricted Subsidiary
or if such Restricted Subsidiary has net income for such period included in
Consolidated Net Income, only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms 

 

11

 

of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.

 

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

 

“Consolidated Interest
Expense” means, for any period, the total interest expense of the
Company and its consolidated Restricted Subsidiaries, whether paid or accrued,
plus, to the extent not included in such interest expense:

 

(1)                                  interest
expense attributable to Capitalized Lease Obligations;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

For
purposes of the preceding definition, total interest expense will be determined
(i) after giving effect to any net payments made or received by the Company and
its Restricted 

 

12

 

Subsidiaries with respect to Interest Rate Agreements and
(ii) exclusive of amounts classified as other comprehensive income in the
balance sheet of the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(4)                                  any
extraordinary gain or loss;

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

“Disqualified Stock”
means, with respect to any Person, any Capital Stock of such Person which by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable) or upon the happening of any event:

 

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

 

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

 

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

 

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

 

“Equity Offering”
means a public or private sale (including upon exercise of options, warrants or
other rights) for cash by the Company of its Common Stock, or options, warrants
or other rights with respect to its Common Stock, other than public offerings
with respect to the Company’s Common Stock, or options, warrants or other
rights, registered on Form S-4 or S-8.

 

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

 

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

 

15

 

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

 

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

 

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

 

The
term “fair market value” means,
with respect to any asset or Investment, the fair market value of such asset or
Investment at the time of the event requiring such determination, as determined
in good faith by senior management of the Company, which determination must be
based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of recognized standing in the case of any determination
of fair market value exceeding $50 million.

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

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

 

“IAI Global Security”
means a Global Security substantially in the form of Exhibit A hereto
bearing the Global Security Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of any Securities transferred to Institutional Accredited Investors.

 

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

 

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

 

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

 

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

 

(3)                                  the
principal component of all obligations of such Person in respect of letters of
credit, bankers’ acceptances or other similar instruments (including 

 

17

 

reimbursement obligations with respect thereto except
to the extent such reimbursement obligation relates to a trade payable and such
obligation is satisfied within 30 days of Incurrence);

 

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

 

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

 

(6)                                  the
principal component or liquidation preference of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary, any Preferred Stock (but
excluding, in each case, any accrued dividends);

 

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

 

(8)                                  the
principal component of Indebtedness of other Persons to the extent Guaranteed
by such Person (including any Guarantees of production or payment by such
Person with respect to a Production Payment but excluding other contractual
obligations of such Person with respect to such Production Payment); and

 

(9)                                  to
the extent not otherwise included in this definition, net obligations of such
Person under Hedging Obligations (the amount of any such obligations to be
equal at any time to the termination value of the agreement or arrangement
giving rise to such obligation that would be payable by such Person at such
time).

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

For
purposes of Section 4.4,

 

(1)                                  “Investment”
will include the portion (proportionate to the Company’s equity interest in a
Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the
fair market value of the net assets of such Restricted Subsidiary at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company will be deemed to continue
to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if
positive) equal to (a) the Company’s “Investment” in such Subsidiary at the
time of such redesignation less (b) the portion (proportionate to the Company’s
equity interest in such Subsidiary) of the fair market value of the net assets
(as determined in accordance with the definition of such term in this Section 1.1,
the results of which determination shall be set forth in an Officers’
Certificate delivered to the Trustee) of such Subsidiary at the time that such
Subsidiary is so re-designated a Restricted Subsidiary;

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(4)                                  the
deduction of appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the assets
disposed 

 

21

 

of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.

 

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

 

“Net Working Capital” means:

 

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

 

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

 

determined in accordance with
GAAP.

 

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

 

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

 

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

 

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

 

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

 

“Oil and Gas Business” means:

 

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

 

22

 

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

 

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

 

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

 

“Oil and Gas Properties” means
Hydrocarbon Interests; Properties now or hereafter pooled or unitized with
Hydrocarbon Interests; all existing or future unitization, pooling agreements
and declarations of pooled units and the units created thereby (including all
units created under orders, regulations and rules of any governmental authority
having jurisdiction) which may affect all or any portion of Hydrocarbon
Interests; all operating agreements, joint venture agreements, contracts and
other agreements which relate to any Hydrocarbon Interests or the production,
sale, purchase, exchange or processing of Hydrocarbons from or attributable to
Hydrocarbon Interests; all Hydrocarbons in and under and which may be produced
and saved or attributable to Hydrocarbon Interests, the lands covered thereby
and all oil in tanks and all rents, issues, profits, proceeds, products,
revenues and other incomes from or attributable to Hydrocarbon Interests; all
tenements, profits á prendre, hereditaments, appurtenances and Properties in
anywise appertaining, belonging, affixed or incidental to Hydrocarbon
Interests, Properties, rights, titles, interests and estates described or
referred to above, including any and all Property, real or personal, now owned
or hereafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment or other
personal Property which may be on such premises for the purpose of drilling a
well or for other similar temporary uses) and including any and all oil wells,
gas wells, water wells, injection wells or other wells, buildings, structures,
fuel separators, liquid extraction plants, plant compressors, pumps, pumping
units, field gathering systems, tanks and tank batteries, fixtures, valves,
fittings, machinery and parts, engines, boilers, meters, apparatus, equipment,
appliances, tools, implements, cables, wires, towers, casing, tubing and rods,
surface leases, rights-of-way, easements and servitudes together with all
additions, substitutions, replacements, accessions and attachments to any and
all of the foregoing.

 

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

 

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

 

“Permitted Business Investment” means any Investment made in
the ordinary course of, and of a nature that is or shall have become customary
in, the Oil and Gas Business as a means 

 

23

 

of exploiting, exploring for, acquiring, developing,
processing, gathering, marketing or transporting crude oil, natural gas and
other Hydrocarbons through any agreement, transaction, interest or arrangement
that permits one to share risks or costs, comply with regulatory requirements
regarding local ownership or satisfy other objectives customarily achieved
through the conduct of the Oil and Gas Business jointly with third parties,
including:

 

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

 

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

 

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

 

(1)                                  a
Restricted Subsidiary, B8/32 Partners or a Person which will, upon the making
of such Investment, become a Restricted Subsidiary;

 

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

 

(3)                                  Permitted
Business Investments;

 

(4)                                  cash
and Cash Equivalents;

 

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

 

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

 

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

 

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

 

24

 

(9)                                  Investments
by the Company or any of its Restricted Subsidiaries, together with all other
Investments pursuant to this clause (9), in an aggregate amount not to exceed
$75 million outstanding at any one time (with the fair market value of such
Investment being measured at the time made and without giving effect to
subsequent changes in value).

 

“Permitted
Junior Securities” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(4)                                  Liens
existing on the Issue Date;

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

in exchange for
their Securities, a like aggregate principal amount of Exchange Securities that
have been registered under the Securities Act.

 

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

 

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

 

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

 

“Related Business Assets” means
long-term assets used or useful in the Oil and Gas Business or Capital Stock
(other than Disqualified Stock) of a Person engaged principally in the Oil and
Gas Business.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

“Senior Indebtedness” means, with respect to either the
Company or a Subsidiary Guarantor, and whether such Senior Indebtedness is
outstanding on the Issue Date or thereafter Incurred, its Bank Indebtedness and
all amounts payable by it under or in respect of all of its other Indebtedness,
including premiums and accrued and unpaid interest (including interest accruing
on or after the filing of any petition in bankruptcy or for reorganization
relating to such Person, at the rate specified in the documentation with
respect thereto, whether or not a claim for post filing interest is allowed in
such proceeding) and fees relating thereto; provided, however,
that Senior Indebtedness will not include any of the following (if it
constitutes Indebtedness):

 

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

 

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

 

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

 

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

 

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

 

(6)                                  any
Capital Stock of such Person.

 

“Senior Subordinated Indebtedness”
means with respect to the Company, the Securities and the 2011 Notes, and with
respect to a Subsidiary Guarantor, its Subsidiary Guarantee and its Guarantee,
if any, with respect to the 2011 Notes, and any other Indebtedness of such
Person that 

 

29

 

specifically
provides that such Indebtedness is to rank equally with the Securities or such
Subsidiary Guarantee, as the case may be, in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of such Person which is not Senior Indebtedness of such Person.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

“Trustee” means the Person named
as the “Trustee” in the first paragraph of this Indenture until a successor
Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean or include each Person who is
then a Trustee hereunder.

 

“2011 Notes” means the 81⁄4% Senior Subordinated Notes due 2011
of the Company outstanding on the Issue Date.

 

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

 

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

 

“Unrestricted Subsidiary” means:

 

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

 

(2)                                  any
Subsidiary of an Unrestricted Subsidiary.

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

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

 

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

 

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

 

33

 

Section 1.2                                      Other
Definitions

 

	
  “Affiliate Transaction”

  	
  4.9

  
	
  “Asset Disposition Offer Amount”

  	
  4.8(c)

  
	
  “Asset Disposition Offer Period”

  	
  4.8(c)

  
	
  “Asset Disposition Offer”

  	
  4.8(b)

  
	
  “Asset Disposition Purchase Date”

  	
  4.8(c)

  
	
  “Authenticating Agent”

  	
  2.2

  
	
  “Blockage Notice”

  	
  10.3(b)

  
	
  “Borrowed Money Payment Default”

  	
  6.1

  
	
  “Change of Control Offer”

  	
  4.14

  
	
  “Change of Control Payment Date”

  	
  4.14

  
	
  “Change of Control Payment”

  	
  4.14

  
	
  “covenant defeasance option”

  	
  8.1(a)

  
	
  “Defaulted Interest”

  	
  2.11

  
	
  “Event of Default”

  	
  6.1

  
	
  “Excess Proceeds”

  	
  4.8(b)

  
	
  “Initial Securities”

  	
  Preamble

  
	
  “legal defeasance option”

  	
  8.1(a)

  
	
  “Legal Holiday”

  	
  12.7

  
	
  “Non-Payment Default”

  	
  10.3(b)

  
	
  “Pari Passu Notes”

  	
  4.8(b)

  
	
  “pay the Securities”

  	
  10.3(a)

  
	
  “Paying Agent”

  	
  2.3

  
	
  “Payment Blockage Period”

  	
  10.3(b)

  
	
  “Payment Default”

  	
  10.3(a)

  
	
  “Obligations”

  	
  11.1

  
	
  “Registrar”

  	
  2.3

  
	
  “Restricted Payment”

  	
  4.4(a)

  
	
  “Successor Company”

  	
  5.1(a)

  

 

Section 1.3                                      Incorporation
by Reference of Trust Indenture Act

 

Whether or not qualified under
the Trust Indenture Act, this Indenture is deemed to be subject to the
provisions of the Trust Indenture Act that are applicable to all indentures
qualified thereunder, such provisions being incorporated by reference in and
made a part of this Indenture.  The
following Trust Indenture Act terms have the following meanings:

 

“Commission” means the SEC;

 

“indenture securities” means the Securities;

 

“indenture security holder” means a Holder;

 

“indenture to be qualified” means this Indenture;

 

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

 

34

 

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

 

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

 

Section 1.4                                      Rules
of Construction

 

Unless the context otherwise
requires:

 

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

 

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

 

(3)                                  “or”
is not exclusive;

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II

 

THE SECURITIES

 

Section 2.1                                      Form
and Dating

 

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

 

35

 

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

 

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

 

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

 

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

 

36

 

Section 2.2                                      Execution
and Authentication

 

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

 

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

 

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

 

The Trustee shall authenticate
and deliver: (i) Initial Securities for original issue in an aggregate
principal amount of $300 million, (ii) if and when issued, Additional
Securities (which may be in the form of Initial Securities or in the form of
Exchange Securities) and (iii) Exchange Securities for issue only in a
Registered Exchange Offer pursuant to a Registration Rights Agreement, and only
in exchange for Initial Securities or Additional Securities of an equal
principal amount, in each case upon a written order of the Company signed by
one Officer of the Company.  Such order
shall specify the amount of the Securities to be authenticated and the date on
which the original issue of Securities is to be authenticated and whether the
Securities are to be in the form of Initial Securities or Exchange
Securities.  The Company may issue
Additional Securities under this Indenture subsequent to the Issue Date, subject
to Section 4.3 of this Indenture; provided,
however, in no event may the
Company issue any Additional Securities at a price that would cause such
Additional Securities to have “original issue discount” within the meaning of
Section 1273 of the Code.

 

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

 

Section 2.3                                      Registrar
and Paying Agent

 

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

 

37

 

Agent, the
Trustee shall act as such.  The Company
shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture, and such agreement shall incorporate the TIA’s provisions of
this Indenture that relate to such Agent. 
The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.

 

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

 

Section 2.4                                      Paying
Agent To Hold Money in Trust

 

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

 

(b)                                 Anything
in this Section 2.4 or Section 4.17 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it, or any Paying
Agent hereunder, as required by this Section 2.4 or Section 4.17,
such sums to be held by the Trustee upon the trusts herein contained.

 

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

 

Section 2.5                                      Holder
Lists

 

The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Holders and shall otherwise comply with 

 

38

 

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

 

Section 2.6                                      Transfer
and Exchange

 

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

 

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

 

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

 

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

 

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

 

(1)                                  Transfer of Beneficial Interests in the Same Global
Security.  Beneficial
interests in any Restricted Global Security may be transferred to Persons who
take delivery 

 

39

 

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

 

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

 

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

 

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

 

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

 

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

 

(4)                                  Transfer and Exchange of Beneficial Interests in a
Restricted Global Security for Beneficial Interests in the Unrestricted Global
Security.  A beneficial
interest in any 

 

40

 

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

 

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

 

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

 

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

 

(D)                               the
Registrar receives the following:

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(2)                                  Restricted Definitive Securities to Unrestricted
Definitive Securities.  Any
Restricted Definitive Security may be exchanged by the Holder thereof for an
Unrestricted 

 

42

 

Definitive
Security or transferred to a Person or Persons who take delivery thereof in the
form of an Unrestricted Definitive Security if:

 

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

 

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

 

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

 

(D)                               the
Registrar receives the following:

 

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

 

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

 

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

 

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

 

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

 

(A)                              one
or more Unrestricted Global Securities in an aggregate principal amount equal
to the principal amount of the beneficial interests in the Restricted Global
Securities tendered for acceptance by Persons that certify in the applicable
Letters 

 

43

 

of Transmittal or via the
Depositary’s book-entry system to the effect required by the applicable
Registration Rights Agreement and SEC interpretations, and accepted for
exchange in the Registered Exchange Offer; and

 

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

 

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

 

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

 

(1)                                  Private Placement Legend.

 

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

 

“THE SECURITIES EVIDENCED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A)(1) TO THE COMPANY, (2) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (3) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (5) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (B) IN ACCORDANCE WITH 

 

44

 

ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.”

 

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

 

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

 

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

 

UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM,
THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) (“DTC”) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL 

 

45

 

INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

 

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

 

(i)                                     General Provisions Relating to Transfers and
Exchanges.

 

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

 

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

 

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

 

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

 

(5)                                  Prior
to the due presentation for registration of transfer of any Security, the
Company, the Trustee, the Paying Agent and the Registrar may deem and treat the
Person in 

 

46

 

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

 

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

 

Section
2.7                                      Replacement
Securities

 

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

 

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

 

Section
2.8                                      Outstanding
Securities

 

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

 

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

 

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

 

Section
2.9                                      Temporary Securities

 

Until
definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities.  Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. 
Without unreasonable delay, the Company shall prepare and the 

 

47

 

Trustee
shall authenticate definitive Securities in exchange for temporary Securities.  Holders of temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as a holder of
definitive Securities.

 

Section
2.10                                Cancellation

 

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

 

Section
2.11                                Defaulted Interest

 

If the Company
defaults in a payment of interest (“Defaulted
Interest”) on the Securities, the Company shall pay Defaulted
Interest (as provided in Section 4.1) in any lawful manner.  The Company may pay the Defaulted Interest to
the Persons who are Holders on a subsequent special record date.  The Company shall fix or cause to be fixed
(or upon the Company’s failure to do so the Trustee shall fix pursuant to a
written instruction of Holders of at least a majority in principal amount of
the outstanding Securities) any such special record date and payment date to
the reasonable satisfaction of the Trustee which special record date shall not
be less than 10 days prior to the payment date for such Defaulted Interest and
the Company, or at the Company’s request, the Trustee, shall promptly mail or
cause to be mailed to each Holder a notice that states the special record date,
the payment date and the amount of Defaulted Interest to be paid.  The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements reasonably satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when so deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest as
provided in this Section 2.11.

 

Section
2.12                                CUSIP Numbers

 

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

 

48

 

ARTICLE
III

 

REDEMPTION

 

Section
3.1                                      Notices to
Trustee

 

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

 

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

 

Section
3.2                                      Selection of
Securities To Be Redeemed

 

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

 

The provisions
of the preceding paragraph of this Section 3.2 shall not apply with
respect to any redemption affecting only a Global Security, whether such Global
Security is to be redeemed in whole or in part. In case of any such redemption
in part, the unredeemed portion of the principal amount of the Global Security
shall be in an authorized denomination.

 

Section
3.3                                      Notice of
Redemption

 

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

 

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

 

(1)                                  the
Redemption Date;

 

49

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
3.4                                      Effect of Notice
of Redemption

 

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

 

Section
3.5                                      Deposit of
Redemption Price

 

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

 

50

 

been
delivered by the Company or such Subsidiary to the Trustee for
cancellation.  If the Company complies
with the provisions of this paragraph, then on and after the Redemption Date,
interest will cease to accrue on the Securities or the portions of Securities
called for redemption.

 

Section
3.6                                      Securities
Redeemed in Part

 

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

 

Section
3.7                                      Optional
Redemption

 

(a)                                  On
and after March 15, 2010, the Company may redeem all or, from time to
time, part of the Securities upon not less than 10 nor more than 60 days’
notice at the Redemption Prices (expressed as percentages of the principal
amount) set forth below plus accrued and unpaid interest on the Securities, if
any, to the applicable Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date), if redeemed during
the 12-month period beginning March 15 of the years indicated:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  103.313

  	
  %

  
	
  2011

  	
   

  	
  102.208

  	
  %

  
	
  2012

  	
   

  	
  101.104

  	
  %

  
	
  2013 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 Prior
to March 15, 2008, the Company may on one or more occasions redeem up to 35% of
the aggregate original principal amount of the Securities (including any
Additional Securities), with the Net Cash Proceeds of one or more Equity
Offerings at a Redemption Price of 106.625% of the principal amount of the
Securities, plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date); provided that
(i) at least 65% of the aggregate original principal amount of the Securities
(including any Additional Securities) remains outstanding after each such
redemption and (ii) such redemption occurs within 120 days after the closing of
the related Equity Offering.

 

(c)                                  The
Company may, at its option, prior to March 15, 2010, redeem the Securities
(including any Additional Securities), as a whole at any time or in part from
time to time, at a Redemption Price equal to the sum of:

 

(1)                                  the
principal amount thereof, plus

 

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

 

51

 

(3)                                  the
Applicable Premium at the Redemption Date.

 

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

 

(d)                                 Except
pursuant to the preceding paragraph (b) or (c), the Securities will not be
redeemable at the Company’s option prior to March 15, 2010.  Except as set forth under Sections 4.8 and
4.14, the Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Securities or to repurchase the
Securities at the option the Holders.

 

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

 

ARTICLE
IV

 

COVENANTS

 

Section
4.1                                      Payment of
Securities

 

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

 

The Company
will pay interest (which includes post-petition interest that may be paid in
any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, at the rate then in effect on Securities; it will pay interest (which
includes post-petition interest that may be paid in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods), from time to time on demand at the same rate as on
overdue principal to the extent lawful.

 

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

 

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

 

52

 

Section
4.2                                      SEC Reports

 

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

 

(1)                                  all
quarterly and annual reports with respect to the Company and its Subsidiaries
that would be required to be contained in a filing with the SEC on Forms 10 Q
and 10 K if the Company were required to file such reports; and

 

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

 

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

 

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

 

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

 

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

 

Section
4.3                                      Limitation on
Indebtedness

 

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

 

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

 

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

 

53

 

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

 

(1)                                  additional Indebtedness of the Company and its
Restricted Subsidiaries Incurred pursuant to any Credit Facility, so long as
the aggregate amount of all Indebtedness Incurred under this clause (1) that is
at any time outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company and
its Restricted Subsidiaries thereunder) does not exceed the greater of (x) $1
billion and (y) $500 million plus 12.5% of ACNTA, in each case, as of the date
of such Incurrence;

 

(2)                                  Indebtedness
of the Company owing to and held by any Restricted Subsidiary or B8/32 Partners
or Indebtedness of a Restricted Subsidiary owing to and held by the Company,
any Restricted Subsidiary or B8/32 Partners; provided,
however,

 

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

 

(B)                                (i)
any subsequent issuance or transfer of Capital Stock or any other event which
results in any such Indebtedness being beneficially held by a Person other than
the Company, a Restricted Subsidiary or B8/32 Partners and (ii) any sale or
other transfer of any such Indebtedness to a Person other than the Company, a
Restricted Subsidiary or B8/32 Partners

 

shall be
deemed, in each case, to constitute an Incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be; and provided further, however, that this
clause (2) will no longer relate to any Indebtedness owing to B8/32
Partners if the Company no longer holds, directly or indirectly, at least 46%
of its Capital Stock;

 

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

 

(4)                                  Indebtedness
of a Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred (a) to provide all or any portion of the funds utilized to consummate
the transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by
the Company or (b) otherwise in connection with, or in contemplation of, such
acquisition); provided, however, that at the time such Restricted
Subsidiary is acquired by the Company, the Company would have been able to
Incur $1.00 of additional Indebtedness pursuant to Section 4.3(a) after
giving effect to the Incurrence of such Indebtedness pursuant to this clause
(4);

 

(5)                                  any
Hedging Obligations; provided,
that such Hedging Obligations are related to business transactions of the
Company or its Restricted Subsidiaries entered into in the 

 

54

 

ordinary course of business and are Incurred for bona
fide hedging purposes (and not for speculative purposes) of the Company or its
Restricted Subsidiaries (as determined in good faith by the Board of Directors
or senior management of the Company);

 

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

 

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

 

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

 

(c)                                  [Intentionally
omitted].

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

(e)                                  Accrual
of interest, accrual of dividends, the accretion of accreted value, the payment
of interest in the form of additional Indebtedness and the payment of dividends
in the form of additional shares of Preferred Stock or Disqualified Stock will
not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.3.  The amount of any Indebtedness outstanding as
of any date shall be (i) the accreted value thereof in the case of any
Indebtedness issued with original issue discount and (ii) the principal amount
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.

 

(f)                                    If
at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any
Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted
Subsidiary as of such date (and, if such Indebtedness is not permitted to be
Incurred as of such date under this Section 4.3,
the Company shall be in Default of this covenant).

 

(g)                                 For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the Incurrence of Indebtedness, the U.S. Dollar-Equivalent principal amount
of Indebtedness denominated in a foreign currency shall be calculated based on
the relevant currency exchange rate in effect on the date such Indebtedness was
Incurred, in the case of term Indebtedness, or first committed, in the case of
revolving credit Indebtedness; provided,
however, that if such Indebtedness is Incurred to refinance other
Indebtedness denominated in a foreign currency, and such refinancing would
cause the applicable U.S. dollar-denominated restriction to be exceeded if
calculated at the relevant currency exchange rate in effect on the date of such
refinancing, such U.S. dollar-denominated restriction shall be deemed not to
have been exceeded so long as the principal amount of such refinancing
Indebtedness (including any additional Indebtedness Incurred to pay interest or
premiums required by the instruments governing such Indebtedness being
refinanced and fees and other transactional expenses Incurred in connection
therewith) does not exceed the principal amount of such Indebtedness being
refinanced.  Notwithstanding any other
provision of this Section 4.3, the
maximum amount of Indebtedness that the Company may Incur pursuant to this Section 4.3 shall not be deemed to be
exceeded solely as a result of fluctuations in the exchange rate of
currencies.  The principal amount of any
Indebtedness Incurred to refinance other Indebtedness, if Incurred in a
different currency from the Indebtedness being refinanced, shall be calculated
based on the currency exchange rate applicable to the currencies in which such
refinancing Indebtedness is denominated that is in effect on the date of such
refinancing.

 

56

 

Section
4.4                                      Limitation on
Restricted Payments

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)                                     50%
of Consolidated Net Income for the period (treated as one accounting period)
from April 1, 2001 to the end of the most recent fiscal 

 

57

 

quarter ending
prior to the date of such Restricted Payment for which internal financial
statements are in existence (or, in case such Consolidated Net Income is a
deficit, minus 100% of such deficit); plus

 

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

 

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

 

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

 

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

 

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

 

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

 

a.                                       the
fair market value of the Company’s Investment in such Subsidiary as of the date
of such redesignation; or

 

b.                                      such
fair market value, as of the date on which such Subsidiary was originally
designated as an Unrestricted Subsidiary after the Issue Date;

 

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

 

58

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

Section
4.5                                      Limitation on
Layering

 

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

 

Section
4.6                                      Limitation on
Liens

 

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

 

Section
4.7                                      Limitation on
Restrictions on Distributions from Restricted Subsidiaries

 

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

 

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

 

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

 

60

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(D)                               with
respect to the disposition or distribution of property or assets in operating
agreements, joint venture agreements, development agreements, area of 

 

61

 

mutual interest
agreements and other agreements that are customary in the Oil and Gas Business
and entered into in the ordinary course of business;

 

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

 

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

 

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

 

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

 

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

 

Section
4.8                                      Limitation on
Sales of Assets and Subsidiary Stock

 

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

 

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

 

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

 

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

 

(A)                              first,
to the extent the Company or any Restricted Subsidiary, as the case may be,
elects (or is required by the terms of any Senior Indebtedness of the Company
or a Subsidiary Guarantor), to prepay, repay or purchase any such Senior 

 

62

 

Indebtedness or
Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor (in
each case other than Indebtedness owed to the Company or an Affiliate of the
Company) within 365 days (or, in the case of an Asset Disposition that results
in Net Available Cash subject to the benefits of the American Jobs Creation Act
of 2004, within 730 days) from the later of the date of such Asset Disposition
or the receipt of such Net Available Cash; and

 

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

 

provided
that pending the final application of any such Net Available Cash in accordance
with clause (A) or clause (B) above, the Company and its Restricted
Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net
Available Cash in any manner not prohibited by this Indenture.

 

(b)                                 Any
Net Available Cash from Asset Dispositions that is not applied or invested (or
subject to an agreement committing to invest) as provided in the preceding
paragraph will be deemed to constitute “Excess
Proceeds.”  On the 366th day
after an Asset Disposition (or, in the case of an Asset Disposition that
results in Net Available Cash subject to the benefits of the American Jobs
Creation Act of 2004, on the 731st day thereafter), if the aggregate amount of
Excess Proceeds exceeds $20 million, a “triggering event” shall be deemed
to have occurred, which will result in the obligation of the Company to make an
offer (“Asset Disposition Offer”)
to all Holders of Securities, and to the extent required by the terms of its
other Senior Subordinated Indebtedness, to all holders of its other Senior
Subordinated Indebtedness outstanding with similar provisions requiring the
Company to make an offer to purchase such Senior Subordinated Indebtedness with
the proceeds from any Asset Disposition (“Pari
Passu Notes”), to purchase the maximum principal amount of
Securities and any such Pari Passu Notes to which the Asset Disposition Offer
applies that may be purchased out of the Excess Proceeds, at an offer price in
cash in an amount equal to 100% of the principal amount of the Securities and
Pari Passu Notes plus accrued and unpaid interest to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Asset Disposition Purchase Date referred to below), in accordance with the procedures
set forth in this Indenture or the agreements governing the Pari Passu Notes,
as applicable, in each case in integral multiples of $1,000.  To the extent that the aggregate amount of
Securities and Pari Passu Notes so validly tendered and not properly withdrawn
pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes,
subject to other covenants contained in this Indenture.  If the aggregate principal amount of
Securities surrendered by Holders thereof and 

 

63

 

other Pari Passu Notes surrendered by holders or
lenders, collectively, exceeds the amount of Excess Proceeds, then (a) the
Trustee shall determine the aggregate principal amount of Securities, on the
one hand, and Pari Passu Notes, on the other hand, to be purchased on a pro rata basis based on the aggregate
principal amount of tendered Securities and Pari Passu Notes, respectively, and
(b) the amount of the Excess Proceeds allocable to the Securities shall be
applied to purchase Securities on a pro rata
basis based on the aggregate principal amount of tendered Securities.  Upon completion of such Asset Disposition
Offer, the amount of Excess Proceeds shall be reset at zero.

 

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

 

(d)                                 [Intentionally
omitted.]

 

(e)                                  On
or before the Asset Disposition Purchase Date, the Company will, to the extent
lawful, accept for payment, on a pro rata
basis to the extent necessary, the Asset Disposition Offer Amount of Securities
and Pari Passu Notes or portions of Securities and Pari Passu Notes so validly
tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or
if less than the Asset Disposition Offer Amount has been validly tendered and
not properly withdrawn, all Securities and Pari Passu Notes so validly tendered
and not properly withdrawn, in each case in integral multiples of $1,000.  The Company will deliver to the Trustee an
Officers’ Certificate stating that the Securities were accepted for payment by
the Company in accordance with the terms of this Section 4.8 and, in
addition, the Company will deliver all certificates and notes required, if any,
by the agreements governing the Pari Passu Notes.  The Company or the Paying Agent, as the case
may be, will promptly (but in any case not later than five Business Days after
termination of the Asset Disposition Offer Period) mail or deliver to each
tendering Holder of Securities or holder or lender of Pari Passu Notes, as the
case may be, an amount equal to the purchase price of the Securities or Pari Passu
Notes so validly tendered and not properly withdrawn by such holder or lender,
as the case may be, and accepted by the Company for purchase, and the Company
will promptly issue new Securities, and the Trustee, upon delivery of an
Officers’ Certificate from the Company, will authenticate and mail or deliver
such new Securities to such Holder, in a principal amount equal to any
unpurchased portion of the Securities surrendered.  In addition, the Company will take any and
all other actions required by the agreements governing the Pari Passu
Notes.  Any Security not so accepted will
be promptly mailed or delivered by the Company to the Holder thereof.  The Company will publicly announce the
results of the Asset Disposition Offer on the Asset Disposition Purchase Date.

 

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

 

64

 

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

 

(2)                                  securities,
notes or other obligations received by the Company or any Restricted Subsidiary
of the Company from the transferee that are converted by the Company or such
Restricted Subsidiary into cash within 60 days.

 

(g)                                 [Intentionally
omitted.]

 

(h)                                 The
Company will comply, to the extent applicable, with the requirements of Section
14(e) of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to this Section 4.8.  To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.8,
the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section 4.8
by virtue of any conflict.

 

Section
4.9                                      Limitation on
Affiliate Transactions

 

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

 

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

 

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

 

(3)                                  in
the event such Affiliate Transaction involves an aggregate consideration in
excess of $50 million, the Officers’ Certificate referred to in clause (2) of
this Section 4.9 shall also include a certification that the terms of
such transaction shall have been approved by a majority of the members of the
Board of Directors of the Company having no personal stake in such transaction
(other than through ownership of Capital Stock of the Company), if any, or if
there are no such members, then the Company shall have received a written
opinion from an independent investment banking, accounting or appraisal firm of
nationally recognized standing 

 

65

 

that the terms of such Affiliate Transaction are not
materially less favorable to the Company or the applicable Restricted
Subsidiary than those that might reasonably have been obtained in a comparable
transaction at such time on an arm’s-length basis from a Person that is not an
Affiliate or that such terms are fair from a financial point of view to the
Company or the applicable Restricted Subsidiary.

 

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

 

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

 

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

 

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

 

(4)                                  any
transaction between the Company and a Restricted Subsidiary or B8/32 Partners
or between Restricted Subsidiaries or between any Restricted Subsidiary and
B8/32 Partners;

 

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

 

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

 

Section
4.10                                Limitation on Sale of
Capital Stock of Restricted Subsidiaries

 

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

 

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

 

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

 

66

 

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

 

Section
4.11                                Future Subsidiary Guarantees

 

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

 

Section
4.12                                Maintenance of
Properties; Insurance

 

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

 

The Company
shall at all times keep all of its and its Restricted Subsidiaries’ Properties
which are of an insurable nature insured with insurers, believed by the Company
to be responsible, against loss or damage to the extent that Property of
similar character is usually so insured by corporations similarly situated and
owning like Properties.

 

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

 

Section
4.13                                Payments for Consent

 

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

 

67

 

Section
4.14                                Change of Control

 

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

 

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

 

On or before
the Change of Control Payment Date, the Company will, to the extent
lawful:  (1) accept for payment all
Securities (in integral multiples of $1,000) properly tendered pursuant to the
Change of Control Offer; (2) deposit with the Paying Agent an amount equal to
the Change of Control Payment in respect of all Securities (or portions
thereof) so tendered; and (3) deliver or cause to be delivered to the Trustee
the Securities (or portions thereof) so accepted together with an Officers’
Certificate stating the aggregate principal amount of Securities (or portions
thereof) being purchased by the Company.

 

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

 

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

 

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

 

68

 

repayment
or obtain such consent prior to the Change of Control Payment Date, it being a
Default of this Section 4.14 if the Company fails to comply with this
Section.

 

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

 

The Company
will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Securities pursuant to this Section
4.14. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.14, the Company
will comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.14 by
virtue of the conflict.

 

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

 

So long as any
of the Securities shall remain outstanding, the Company will, in accordance
with Section 2.3 hereof, maintain an office or agency (which may be an
office or “drop” facility of the Trustee or an affiliate of the Trustee, or the
Registrar) in the continental United States, where the Securities may be
surrendered for exchange or registration of transfer as in this Indenture
provided, and where notices and demands to or upon the Company in respect to
the Securities may be served, and the Company will, in accordance with Section
2.3 hereof, maintain in the City and State of New York an office or agency
where the Securities may be presented or surrendered for payment.  The Company may also from time to time
designate one or more other offices or agencies where Securities may be
presented or surrendered for any and all such purposes and may from time to
time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the City and State of New
York where Securities may be presented for payment.  The Company will give to Trustee prompt
written notice of the location of any such office or agency and of any change
of location thereof.

 

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

 

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

 

Section
4.17                                Provision as to Paying
Agent

 

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

 

69

 

Section
4.18                                Maintenance of
Corporate Existence

 

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

 

Section
4.19                                Compliance Certificate

 

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

 

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

 

Section
4.20                                Taxes

 

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

 

Section
4.21                                Stay, Extension and
Usury Laws

 

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

 

70

 

Section
4.22                                Further
Instruments and Acts

 

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

 

Section
4.23                                Effectiveness
of Covenants

 

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

 

ARTICLE
V

 

SUCCESSOR
COMPANY

 

Section
5.1                                      Merger
and Consolidation

 

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

 

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

 

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

 

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

 

71

 

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

 

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

 

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

 

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

 

ARTICLE
VI

 

DEFAULTS
AND REMEDIES

 

Section
6.1                                      Events
of Default

 

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

 

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

 

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

 

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

 

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

 

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

 

(6)                                  default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which
is Guaranteed by

 

72

 

the Company or any of its Restricted Subsidiaries),
other than the Securities or any Indebtedness owed to the Company or a
Restricted Subsidiary, whether such Indebtedness or Guarantee now exists, or is
created after the Issue Date, which default:

 

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

 

(B)                                results
in the acceleration of such Indebtedness prior to its maturity;

 

and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Borrowed Money Payment Default or the maturity of
which has been so accelerated, aggregates $25 million or more; provided, however, that if any such Borrowed Money Payment
Default is cured or waived or any such acceleration rescinded, or such
Indebtedness is repaid, within a period of 10 days from the continuation of
such Borrowed Money Payment Default beyond the applicable grace period or the
occurrence of such acceleration, as the case may be, such Event of Default and
any consequential acceleration of the Securities shall be automatically
rescinded, so long as such rescission does not conflict with any judgment or
decree of a competent court;

 

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

 

(i)                                     commences
a voluntary case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

73

 

Restricted
Subsidiaries), would constitute a Significant Subsidiary in an involuntary
case;

 

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

 

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

 

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

 

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

 

(9)                                  failure
by the Company or any Significant Subsidiary or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary to pay final judgments aggregating in
excess of $25 million (net of any amounts that a reputable and
creditworthy insurance company has acknowledged liability for in writing),
which judgments are not paid, discharged or stayed for a period of 60 days.

 

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

 

Section
6.2                                      Acceleration
of Maturity; Rescission and Annulment

 

If an Event of
Default (other than an Event of Default described in clause (7) of Section
6.1) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the outstanding Securities by
notice to the Company and the Trustee, may, and the Trustee at the request of
such Holders shall, declare the principal of, premium, if any, and accrued and
unpaid interest, if any, on all the Securities to be due and payable.  Upon such a declaration, such principal,
premium and accrued and unpaid interest will be due and payable
immediately.  If an Event of Default
described in clause (7) of Section 6.1 above occurs and is continuing,
the principal of, premium, if any, and accrued and unpaid interest on all the
Securities will become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders.  The Holders of a majority in principal amount
of the 

 

74

 

outstanding
Securities by notice to the Trustee may, on behalf of the Holders of all the
Securities, rescind any such acceleration with respect to the Securities and
its consequences if (1) rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (2) all existing Events of
Default, other than the nonpayment of the principal of, premium, if any, and
interest on the Securities that have become due solely by such declaration of
acceleration, have been cured or waived.

 

Section
6.3                                      Other
Remedies

 

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

 

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

 

Section
6.4                                      Waiver
of Past Defaults

 

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

 

Section
6.5                                      Control
by Majority

 

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

 

75

 

Section
6.6                                      Limitation
on Suits

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
6.7                                      Rights
of Holders to Receive Payment

 

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

 

Section
6.8                                      Collection
Suit by Trustee

 

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

 

Section
6.9                                      Trustee
May File Proofs of Claim

 

The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim under
Section 7.7 for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel) and the Holders allowed in
any judicial proceedings relative to the Company, its Subsidiaries or their
respective creditors or properties and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in 

 

76

 

bankruptcy
or other Person performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee under
Section 7.7.

 

Section
6.10                                Priorities

 

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

 

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

 

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

 

Third: to the Company.

 

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

 

Section
6.11                                Undertaking
for Costs

 

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

 

ARTICLE
VII

 

TRUSTEE

 

Section
7.1                                      Duties
of Trustee

 

(a)                                  If
an Event of Default has occurred and is continuing, the Trustee shall exercise
the rights and powers vested in it by this Indenture and use the same degree of
care and skill in 

 

77

 

their exercise as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
7.2                                      Rights
of Trustee.

 

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

 

(b)                                 Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both, all of which shall conform to the
provisions of 

 

78

 

Section 12.05.  The Trustee shall be fully protected and
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officers’ Certificate or Opinion of Counsel.

 

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

 

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

 

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

 

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

 

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

 

(h)                                 The
rights, privileges, immunities and protections afforded to the Trustee pursuant
to this Indenture (including, without limitation, the right to be indemnified)
shall also be afforded to the Trustee in each of its capacities hereunder,
including Paying Agent, Registrar, Securities Custodian or transfer agent.

 

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

 

Section
7.3                                      Individual
Rights of Trustee

 

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

 

79

 

Section
7.4                                      Trustee’s
Disclaimer

 

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

 

Section
7.5                                      Notice
of Defaults

 

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

 

Section
7.6                                      Reports
by Trustee to Holders

 

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

 

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

 

Section
7.7                                      Compensation
and Indemnity

 

(a)                                  The
Company shall pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for its services as set forth in a
separate fee agreement between the Trustee and the Company.  The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses Incurred or made by it in
accordance with the provisions of this Indenture, including costs of
collection, costs of preparing and reviewing reports, certificates and other
documents, costs of preparation and mailing of notices to Holders and
reasonable costs of counsel retained by the Trustee in connection with the
delivery of an Opinion of Counsel or otherwise, in addition to the compensation
for its services.  Such expenses shall
include the reasonable compensation and expenses, disbursements and advances of
the Trustee’s agents, counsel, accountants and experts.  The Company shall indemnify and hold harmless
the Trustee (in its individual and trustee capacities) and its officers,
directors and agents 

 

80

 

against any and all loss, liability, claims, action,
suit, cost or expense (including reasonable attorneys’ fees) of any kind and
nature whatsoever Incurred by it in connection with the administration of this
trust and the performance of its duties hereunder, including the costs and
expenses of enforcing this Indenture (including this Section 7.7)
and of defending itself against any claims (whether asserted by any Holder, the
Company or otherwise).  The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder to the
extent that the Company has not been prejudiced thereby.  The Company shall defend the claim and the
Trustee may have separate counsel and the Company shall pay the fees and
expenses of such counsel; provided that
the Company will not be required to pay such fees and expenses if it assumes
the Trustee’s defense with counsel reasonably acceptable to and approved by the
Trustee and there is no conflict of interest between the Company and the
Trustee in connection with such defense. 
The Company need not pay for any settlement made without its consent,
which consent may not be unreasonably withheld. 
The Company is not required to reimburse any expense or indemnify
against any loss, liability claim, again, suit, cost or expense incurred by the
Trustee through the Trustee’s own willful misconduct or negligence.

 

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

 

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

 

Section
7.8                                      Replacement
of Trustee

 

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

 

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

 

(c)                                  If
the Trustee resigns or is removed by the Company or by the Holders of a
majority in outstanding principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any 

 

81

 

reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.

 

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

 

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

 

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

 

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

 

Section
7.9                                      Successor
Trustee by Merger

 

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

 

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

 

Section
7.10                                Eligibility; Disqualification

 

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

 

82

 

other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
Trust Indenture Act Section 310(b)(1) are met.

 

Section
7.11                                Preferential
Collection of Claims Against Company

 

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

 

ARTICLE
VIII

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

Section
8.1                                      Discharge
of Liability on Securities; Defeasance

 

(a)                                  Subject
to Section 8.1(c), when (i)(x) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.7) for cancellation or (y) all
outstanding Securities not theretofore delivered for cancellation have become
due and payable, whether at their Stated Maturity or upon redemption, or will
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name and at the expense of the
Company and the Company irrevocably deposits or causes to be deposited with the
Trustee as trust funds in trust solely for the benefit of the Holders money in
U.S. dollars, U.S. Government Obligations, or a combination thereof, in such
amounts as will be sufficient without consideration of any reinvestment of
interest to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation for principal, premium,
if any, and accrued interest to the date of their Stated Maturity or
redemption, (ii) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or shall occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company or any Subsidiary Guarantor is
a party or by which the Company or any Subsidiary Guarantor is bound; (iii) the
Company has paid or caused to be paid (or has deposited or caused to be
deposited with the Trustee trust funds pursuant to clause (i) above with
respect to the payment of) all sums payable by it under this Indenture and the
Securities; and (iv) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
such Securities at maturity or the Redemption Date, as the case may be, then
the Trustee shall acknowledge satisfaction and discharge of this Indenture on
demand of the Company (accompanied by an Officers’ Certificate and an Opinion
of Counsel stating that all conditions precedent specified herein relating to
the satisfaction and discharge of this Indenture have been complied with) and
at the cost and expense of the Company.

 

(b)                                 Subject
to Section 8.1(c) and Section 8.2,
the Company at any time may terminate (i) all its obligations under the
Securities and this Indenture (“legal
defeasance option”), and after giving effect to such legal
defeasance, any omission to comply with such obligations shall no longer
constitute a Default or Event of Default or (ii) its obligations under, Section 4.2, Section
4.3, Section 4.4, Section 4.5, Section
4.6, Section 4.7, Section 4.8, Section
4.9, Section 

 

83

 

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

 

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

 

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

 

(c)                                  Notwithstanding
the provisions of Section 8.1(a) and Section 8.1(b), the obligations of the
Company in Section 2.2, Section 2.3, Section 2.4,
Section 2.5, Section 2.6, Section 2.7, Section 2.8,
Section 2.9, Section 2.10, Section 4.1, Section
4.13, Section 4.15, Section 4.16, Section 4.17, Section
4.18, Section 4.19, Section 4.21, Section 4.22, Section
7.7, Section 7.8 and in this Article
VIII shall survive until the Securities have been paid in full.  Thereafter, the obligations of the Company in
Section 7.7, Section 8.4 and Section 8.5 shall survive.

 

Section
8.2                                      Conditions
to Defeasance

 

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

 

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

 

84

 

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

 

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

 

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

 

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

 

(6)                                  in
the case of the covenant defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel (subject to customary exceptions,
qualifications and exclusions) in the United States to the effect that the
Holders will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and covenant defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and covenant defeasance had
not occurred; and

 

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

 

Section
8.3                                      Application
of Trust Money

 

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

 

Section
8.4                                      Repayment
to Company

 

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

 

85

 

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

 

Section
8.5                                      Indemnity
for U.S. Government Obligations

 

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

 

Section
8.6                                      Reinstatement

 

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

 

ARTICLE
IX

 

AMENDMENTS

 

Section
9.1                                      Without
Consent of Holders

 

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

 

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

 

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

 

86

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
9.2                                      With
Consent of Holders

 

The Company and
the Trustee may amend this Indenture or the Securities with the written consent
of the Holders of a majority in outstanding principal amount of the Securities 

 

87

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

88

 

Section
9.3                                      Compliance
with Trust Indenture Act

 

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

 

Section
9.4                                      Revocation
and Effect of Consents and Waivers

 

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

 

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

 

Section
9.5                                      Notation
on or Exchange of Securities

 

If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. 
The Trustee may place an appropriate notation on the Security regarding
the changed terms and return it to the Holder. 
Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms, but the failure to make the
appropriate notation or to issue a new Security shall not affect the validity
of such amendment.

 

Section
9.6                                      Trustee
To Sign Amendments

 

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

 

89

 

ARTICLE
X

 

SUBORDINATION OF SECURITIES

 

Section
10.1                                Securities
Subordinate to Senior Indebtedness

 

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

 

Section
10.2                                Liquidation,
Dissolution and Bankruptcy of Company

 

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

 

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

 

(2)                                  until
the Senior Indebtedness of the Company is paid in full in cash (or U.S.
dollar-denominated Cash Equivalents), any payment or distribution to which the
Holders of Securities would be entitled but for this Article X (except
in Permitted Junior Securities or from the trusts provided for in Section
8.1 and Section 8.2) shall be made to the holders of the Senior
Indebtedness of the Company as their interests may appear.

 

Section
10.3                                Suspension
of Payment When Designated Senior Indebtedness in Default

 

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

 

However, the
Company may pay the Securities if the Company and the Trustee receive written
notice approving such payment from the Representative of the Senior
Indebtedness with 

 

90

 

respect
to which either of the events set forth in clause (1) or (2) of the immediately
preceding sentence has occurred and is continuing.

 

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

 

The Company may
resume payments on the Securities after the end of the Payment Blockage Period
(including any missed payments), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders has accelerated the maturity
of such Designated Senior Indebtedness. 
Not more than one Blockage Notice may be given in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness during such period.  In no event, however, may the total number of
days during which any Payment Blockage Period or Periods is in effect exceed
179 days in the aggregate during any 360 consecutive day period.  For purposes of this paragraph, no default or
event of default that existed or was continuing on the date of the commencement
of any Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured
or waived for a period of not less than 90 consecutive days.

 

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

 

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

 

91

 

date upon which by the terms hereof any money may
become payable for any purpose, such payments will be paid over by the Trustee
and delivered forthwith to the Company.

 

Section
10.4                                Subrogation
to Rights of Holders of Senior Indebtedness

 

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

 

Section
10.5                                Provisions
Solely to Define Relative Rights

 

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

 

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

 

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

 

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

 

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

 

Section
10.6                                Trustee
to Effectuate Subordination

 

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

 

Section
10.7                                No
Waiver of Subordination Provisions

 

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

 

92

 

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

 

Section
10.8                                Notice
to Trustee

 

(a)                                  The
Company shall give prompt written notice to the Trustee of any fact known to
the Company which would prohibit the making of any payment to or by the Trustee
in respect of the Securities. 
Notwithstanding the provisions of this Article X or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of Senior
Indebtedness of the Company (or from any Representative therefor) with respect
to a Payment Default, or one or more of the holders of Designated Senior
Indebtedness (or from any Representative therefor), with respect to a
Non-Payment Default; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.1, shall be entitled in
all respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section at
least three Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of, premium, if any, or interest on any Securities),
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it within three Business
Days prior to such date.

 

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

 

93

 

Section
10.9                                Reliance
on Judicial Order or Certificate of Liquidating Agent

 

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

 

Section
10.10                          Trustee
Not Fiduciary for Holders of Senior Indebtedness

 

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

 

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

 

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

 

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

 

ARTICLE
XI

 

SUBSIDIARY
GUARANTEE

 

Section
11.1                                Subsidiary
Guarantee

 

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

 

94

 

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

 

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

 

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

 

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

 

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

 

The Subsidiary
Guarantors, jointly and severally, agree that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article VI for the 

 

95

 

purposes
of each Subsidiary Guarantee notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article VI, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Subsidiary
Guarantors for the purposes of this Section 11.1.

 

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

 

Section
11.2                                Limitation
on Liability

 

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

 

Section
11.3                                Execution
and Delivery of Notation of Subsidiary Guarantee

 

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

 

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

 

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

 

Section
11.4                                Successors
and Assigns; Releases

 

(a)                                  This
Article XI shall be binding upon the Subsidiary Guarantors and their
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee 

 

96

 

and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.

 

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

 

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

 

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

 

(3)                                  upon
the release or discharge of all Guarantees by such Subsidiary Guarantor of
Indebtedness of the Company (other than the Securities) or any other Subsidiary
Guarantor, except a release or discharge by or as a result of the payment of
such Indebtedness by such Subsidiary Guarantor pursuant to its Guarantee; or

 

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

 

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

 

Section
11.5                                No
Waiver

 

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

 

Section
11.6                                Right
of Contribution

 

Each Subsidiary
Guarantor hereby agrees that to the extent that a Subsidiary Guarantor shall
have paid more than its proportionate share of any payment made hereunder, such

 

97

 

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

 

Section
11.7                                No
Subrogation

 

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

 

Section
11.8                                Modification

 

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

 

Section
11.9                                Subordination

 

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

 

98

 

ARTICLE
XII

 

MISCELLANEOUS

 

Section
12.1                                Trust
Indenture Act Controls

 

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

 

Section
12.2                                Notices

 

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

 

if to the
Company or any Subsidiary Guarantor:

 

Pogo Producing
Company

5 Greenway Plaza, Suite 2700

Houston, Texas 77046-2504

Attention:  Chief Financial Officer

Fax:  (713) 297-4954; or

 

if to the
Trustee:

 

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

600 Pearl Street, Suite 420

Dallas, Texas 75201

Attention:  Corporate Trust Department

Fax:  (214) 880-8241

 

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

 

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

 

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

 

99

 

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

 

Section
12.3                                Communication
by Holders with other Holders

 

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

 

Section
12.4                                Certificate
and Opinion as to Conditions Precedent

 

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

 

Section
12.5                                Statements
Required in Certificate or Opinion

 

Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include: (i) a statement that the
individual making such certificate or opinion has read such covenant or
condition; (ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based; (iii) a statement that, in the opinion of
such individual, he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (iv) a statement as to whether or not,
in the opinion of such individual, such covenant or condition has been complied
with.

 

Section
12.6                                When
Securities Disregarded

 

In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee actually knows are so owned shall
be so disregarded.  Also, subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.  Securities so owned
that have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee’s right to
so act with respect to such Securities and that the pledgee is not the Company
or any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company.

 

100

 

Section
12.7                                Legal
Holidays

 

A “Legal Holiday” is a day that is not a
Business Day.  Notwithstanding any other
provisions of this Indenture, the Securities or any Subsidiary Guarantees, if a
payment date is a Legal Holiday, payment shall be made on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.  If a regular record
date is a Legal Holiday, the record date shall not be affected.

 

Section
12.8                                Governing
Law

 

THE LAW OF THE
STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE AND ENFORCE THIS
INDENTURE, THE SECURITIES AND THE SUBSIDIARY GUARANTEES.

 

Section
12.9                                No
Personal Liability of Directors, Officers, Employees and Shareholders

 

No past,
present or future director, officer, employee, incorporator,  shareholder, member, manager or partner, as
such, of the Company or any Subsidiary Guarantor shall have any liability for
any obligations of the Company or any Subsidiary Guarantor under the Securities,
this Indenture or the Subsidiary Guarantees or for any claim based on, in
respect of or by reason of such obligations or their creation.  By accepting a Security, each Holder shall
waive and release all such liability. 
The waiver and release shall be part of the consideration for the issue
of the Securities.

 

Section
12.10                          Successors

 

All agreements
of the Company and any Subsidiary Guarantors in this Indenture and the
Securities and any Subsidiary Guarantees shall bind their respective
successors.  All agreements of the
Trustee in this Indenture shall bind its successors.

 

Section
12.11                          Multiple
Originals; Counterparts

 

The parties may
sign any number of copies of this Indenture. 
Each signed copy shall be an original, but all of them together
represent the same agreement.  One signed
copy is enough to prove this Indenture. 
This Indenture may be executed in multiple counterparts which, when
taken together, shall constitute one instrument.

 

Section
12.12                          Severability

 

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

 

Section
12.13                          Consent
to Jurisdiction

 

Each of the
Company and any Subsidiary Guarantor irrevocably submits to the non-exclusive
jurisdiction of any competent New York state or U.S. federal court located in
the City and State of New York over any suit, action or proceeding arising out
of or relating to this 

 

101

 

Indenture
or any Subsidiary Guarantee or Security. 
Each of the Company and any Subsidiary Guarantor irrevocably waives, to
the fullest extent permitted by law, any objection which it may have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in any inconvenient forum.

 

Section
12.14                          Table of
Contents; Headings

 

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

 

Section
12.15                          No
Adverse Interpretation of Other Agreements

 

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

 

[Signatures on following
page]

 

102

 

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

 

	
   

  	
  POGO
  PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Ulm, II

  
	
   

  	
   

  	
  James P. Ulm, II

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK

  
	
   

  	
   

  	
  TRUST
  COMPANY, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John C. Stohlmann

  
	
   

  	
   

  	
  John C. Stohlmann

  
	
   

  	
   

  	
  Vice President

  

 

 

Signature
Page to Pogo Producing Company Indenture, dated as of March 29, 2004

 

 

EXHIBIT A

[FACE OF SECURITY]

 

POGO PRODUCING COMPANY

 

6.625% SENIOR SUBORDINATED NOTE DUE 2015

 

CUSIP NO.             

 

No.                                                                                                                                                              
Principal Amount $                 

 

Pogo Producing
Company, a Delaware corporation, promises to pay to                         ,
or registered assigns, the principal sum of                            
dollars [or such other amount as may be indicated on the Schedule of Exchanges
of Interests in the Global Security attached hereto] on March 15, 2015.

 

Interest Payment Dates:  March 15 and September 15 commencing
September 15, 2005.

 

Record Dates: 
March 1 and September 1.

 

Dated:

 

	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE BANK OF NEW YORK TRUST COMPANY,
  N.A.

  as Trustee, certifies that this is one of the

  Securities referred to in the Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
						

 

 

* Delete for Definitive Security

 

A-1

 

[BACK OF SECURITY]

 

POGO PRODUCING COMPANY

 

6.625% SENIOR SUBORDINATED NOTE DUE 2015

 

[Insert the Global Security
Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert the Private Placement
Legend, if applicable pursuant to the provisions of the Indenture]

 

Capitalized
terms used herein have the meanings assigned to them in the Indenture referred
to below unless otherwise indicated.

 

1.                                       Interest.  Pogo Producing Company, a Delaware
corporation (the “Company”), promises to pay interest on the principal amount
of this Security at 6.625% per annum from March 29, 2005 until
maturity [and shall pay the Special Interest, if any, payable pursuant to
Section 2(c) of the Registration Rights Agreement.]  The Company will pay interest [including
Special Interest, if any,]* semi-annually in arrears on March 15 and September
15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an “Interest Payment Date”).  Interest on the Securities will accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance; provided that if there is no existing
Default in the payment of interest, and if this Security is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further,
that the first Interest Payment Date shall be September 15, 2005.  The Company will pay interest (which includes
post-petition interest that may be paid in any proceeding under any Bankruptcy
Law) on overdue principal and premium, if any, at the rate then in effect; it
will pay interest (which includes post-petition interest that may be paid in
any proceeding under any Bankruptcy Law) on overdue installments of interest
[including Special Interest, if any,]* (without regard to any applicable grace
periods) from time to time on demand at the same rate as on overdue principal
to the extent lawful.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

 

2.                                       Method of Payment.  The Company will pay interest on the
Securities (except Defaulted Interest) to the Persons who are registered
Holders of Securities at the close of business on the March 1 or September 1
next preceding the Interest Payment Date, even if such Securities are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.11 of the Indenture with respect to Defaulted
Interest.  The Securities will be payable
as to principal, premium, if any, and interest at the office or agency
maintained or designated by the Company for such purpose within the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest, 

 

* Delete for Exchange Security

 

A-2

 

and premium, if any, on all Global Securities and all
other Securities the Holders of which will have provided wire transfer
instructions to the Company or the Paying Agent prior to the relevant record
date.  Such payment will be in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. 
The principal of the Securities shall be payable only upon surrender of
any Security at the specified offices of any Paying Agent.

 

3.                                       Paying Agent and
Registrar.  Initially, The
Bank of New York Trust Company, N.A. (“Trustee”), will act as Paying Agent and
Registrar.  The Company may appoint and
change any Paying Agent or Registrar without notice to any Holder.  The Company or any of its Subsidiaries may
act as Paying Agent or Registrar.

 

4.                                       Indenture.  The Company issued the Securities under an
Indenture, dated as of March 29, 2005 (the “Indenture”), between the
Company and the Trustee.  The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act.  The Securities are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms.  To the extent any provision of
this Security conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling to the extent
permitted by law.  The Securities are
unsecured obligations of the Company. 
The Company initially issued $300,000,000 aggregate principal amount of
Securities.  The Company may issue
Additional Securities under the Indenture, subject to Section 4.3 of the
Indenture.

 

5.                                       Optional Redemption.

 

(a)                                  On
and after March 15, 2010, the Company may redeem all or, from time to
time, part of the Securities upon not less than 10 nor more than 60 days’
notice at the Redemption Prices (expressed as percentages of the principal
amount) set forth below plus accrued and unpaid interest on the Securities, if
any, to the applicable Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date), if redeemed during
the 12-month period beginning March 15 of the years indicated:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  103.313

  	
  %

  
	
  2011

  	
   

  	
  102.208

  	
  %

  
	
  2012

  	
   

  	
  101.104

  	
  %

  
	
  2013 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 Prior
to March 15, 2008, the Company may on one or more occasions redeem up to 35% of
the aggregate original principal amount of the Securities (including any
Additional Securities), with the Net Cash Proceeds of one or more Equity
Offerings at a Redemption Price of 106.625% of the principal amount of the
Securities, plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date); provided that
(i) at least 65% of the aggregate original principal amount of the Securities
(including any Additional Securities) remains outstanding after each such 

 

A-3

 

redemption and (ii) such redemption occurs within 120
days after the closing of the related Equity Offering.

 

(c)                                  The
Company may, at its option, prior to March 15, 2010, redeem the
Securities, as a whole at any time or in part from time to time, at a
Redemption Price equal to the sum of:

 

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

 

(2)                                  the Applicable Premium at the
Redemption Date.

 

6.                                       Subordination.  The Securities are subordinated to Senior
Indebtedness of the Company.  To the extent
provided in the Indenture, Senior Indebtedness of the Company must be paid
before the Securities may be paid.  In
addition, a Subsidiary Guarantee, if any, is subordinated to Senior
Indebtedness of the relevant Subsidiary Guarantor.  The Company agrees, and each Holder by
accepting a Security agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect and appoints the
Trustee as attorney-in-fact for such purpose.

 

7.                                       Denominations, Transfer,
Exchange.  The Securities are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  The transfer of
Securities may be registered and Securities may be exchanged as provided in the
Indenture.  The Registrar or the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any transfer tax
or other governmental taxes and fees required by law or permitted by the
Indenture.  The Company, the Trustee and the Registrar need
not exchange or register the transfer of any Security or portion of a Security
selected for redemption, except for the unredeemed portion of any Security
being redeemed in part.  Also, the
Company, the Trustee and the Registrar need
not exchange or register the transfer of any Securities for a period of 15 days
before a selection of Securities to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.

 

If this is a
Global Security, this Security represents the aggregate principal amount of
outstanding Securities from time to time endorsed hereon, and the aggregate
principal amount of outstanding Securities represented by this Security may
from time to time be reduced or increased, as appropriate, to reflect
exchanges, repurchases, transfers and redemptions in accordance with the
Indenture.

 

8.                                       Persons Deemed Owners.  The registered Holder of a Security may be
treated as its owner for all purposes.

 

9.                                       Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture
and the Securities may be amended or supplemented with the written consent of
the Holders of at least a majority in outstanding principal amount of the
Securities, and any existing Default or Event of Default or compliance with any
provision of the Indenture or the Securities may be waived with the written
consent of the Holders of a majority in outstanding principal amount of 

 

A-4

 

the Securities. 
Without the consent of any Holder of a Security, the Indenture or the
Securities may be amended or supplemented (i) to cure any ambiguity, omission,
defect or inconsistency, (ii) to provide for the assumption by successor
entities of the Company’s obligations under the Indenture and the Securities,
(iii) to provide for uncertificated Securities in addition to or in place of
certificated Securities, (iv) to add or release Guarantees with respect to the
Securities, (v) to secure the Securities or any Subsidiary Guarantee, (vi) to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power conferred upon the Company, (vii) to make any
change that does not adversely affect the rights of any Holder, (viii) to
comply with any requirement of the SEC in connection with qualifying the
Indenture under the Trust Indenture Act, (ix) to provide for the issuance of
the Exchange Securities, (x) to provide for the issuance of Additional
Securities or (xi) to make any change in the subordination provisions of the
Indenture that would limit or terminate the benefits available to any holder of
Senior Indebtedness of the Company under such subordination provisions, in each
case in accordance with and as more fully provided in the Indenture.

 

10.                                 Defaults.  If an Event of Default shall occur and be
continuing, the Securities may be declared (or shall become without any
declaration, as the case may be) due and payable in the manner and with the
effect provided in the Indenture.

 

11.                                 Defeasance.  The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Company on this Security and (ii) certain restrictive
covenants and the related Events of Default, subject to compliance by the
Company with certain conditions set forth in the Indenture, which provisions
apply to this Security.

 

12.                                 Authentication.  This Security will not be valid until
authenticated by the manual signature of the Trustee or an Authenticating
Agent.

 

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

 

14.                                 [Compliance
with Registration Rights Agreement. 
By accepting a Security, each Holder acknowledges and agrees to the
provisions of the Exchange and Registration Rights Agreement, dated as of
March 29, 2005, among the Company and the other parties named on the
signature pages thereof, including the obligations of the Holders with respect
to a registration and the indemnification of the Company to the extent provided
therein.]*

 

15.                                 CUSIP Numbers.  Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Securities or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.

 

*
Delete for Exchange Security

 

A-5

 

16.                               Governing
Law.  The law of the State of New
York will govern and be used to construe and enforce the Indenture and the
Securities.

 

The Company
will furnish to any Holder upon written request and without charge a copy of
the Indenture [and/or the Registration Rights
Agreement]. 
Requests may be made to:

 

Pogo Producing
Company

P.O. Box 2504

Houston, Texas
77252-2504

 

 

* Delete for
Exchange Security

 

A-6

 

ASSIGNMENT FORM

 

	
  To assign this
  Security, fill in the form below:

  
	
   

  
	
  (I) or (we)
  assign and transfer this Security to:

  	
   

  
	
   

  	
  (Insert assignee’s
  legal name)

  
	
   

  
	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  
	
   

  
	
  and irrevocably
  appoint

  	
   

  
	
  to transfer
  this Security on the books of the Company. The agent may substitute another
  to act for him.

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as
  your name appears on the face

  of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  Guarantee:*

  	
   

  	
   

  
								

 

 

*                 Participant in a
recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).

 

A-7

 

Option of Holder to Elect Purchase

 

If you want to
elect to have this Security purchased by the Company pursuant to Section 4.8
or Section 4.14 of the Indenture, check the appropriate box below:

 

o
Section 4.8                                                                                                                       o
Section 4.14

 

If you want to
elect to have only part of the Security purchased by the Company pursuant to Section
4.8 or Section 4.14 of the Indenture, state the amount you elect to
have purchased:

 

$               

 

                     

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the face

  of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  Guarantee:*

  	
   

  	
   

  	
   

  
							

 

 

*                 Participant in a
recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).

 

A-8

 

[TO BE ATTACHED TO GLOBAL SECURITIES]

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL
SECURITY

 

The following
increases or decreases in this Global Security have been made:

 

	
  Date
  of Exchange

  	
   

  	
  Amount of Decrease in

  Principal Amount of this

  Global Security

  	
   

  	
  Amount of Increase in

  Principal Amount of this

  Global Security

  	
   

  	
  Principal Amount of this Global Security 

  Following such Decrease

  or Increase

  	
   

  	
  Signature of Authorized

  Officer of Trustee or

  Securities Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-9

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Pogo
Producing Company

P. O. Box 2504
Houston, Texas 77252-2504

 

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

600 Pearl Street, Suite 420

Dallas, Texas 75201

Attention:  Corporate Trust Department

 

Re:  Pogo Producing Company
6.625% Senior Subordinated Notes due 2015

 

(CUSIP
[730448 AQ 0](1)  [U72645 AB 7](2)

 

Reference is hereby made to the Indenture, dated as of
March 29, 2005 (the “Indenture”),
between Pogo Producing Company (the “Company”) and
The Bank of New York Trust Company, N.A., as trustee.  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

                   
(the “Transferor”) owns and proposes to
transfer the Security[ies] or interest in such Security[ies] specified in Annex A hereto, in the principal amount of $                   
in such Security[ies]
or interests (the “Transfer”), to                                       
(the “Transferee”).  In connection with the Transfer, the
Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.  o  Check if Transferee will
take delivery of a beneficial interest in the 144A Global Security or a
Restricted Definitive Security pursuant to Rule 144A.  The Transfer is being effected pursuant to
and in accordance with Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Security is being transferred to a Person that the Transferor reasonably
believes is purchasing the beneficial interest or Definitive Security for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is
a “qualified institutional buyer” within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A, and such Transfer is in
compliance with any applicable securities laws of any state of the United
States.  Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Security will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Security and/or the Restricted Definitive Security and in the
Indenture.

 

(1)                                  For
Securities sold in reliance on Rule 144A.

 

(2)                                  For
Securities sold in reliance on Regulation S.

 

B-1

 

2.  o  Check if Transferee will
take delivery of a beneficial interest in the Regulation S Global Security or a
Restricted Definitive Security pursuant to Regulation S.  The Transfer is being effected pursuant to
and in accordance with Rule 903 or Rule 904 under the Securities Act and,
accordingly, the Transferor hereby further certifies that (i) the Transfer is
not being made to a Person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903 or Rule 904 of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not
being made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Security will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Security and/or the Restricted Definitive Security and in the Indenture and the
Securities Act.

 

3.  o  Check if Transferee is an
Institutional Accredited Investor that will take delivery of a beneficial
interest in the IAI Global Security or a Restricted Definitive Security.  The Transfer is being effected in compliance
with the transfer restrictions applicable to beneficial interests in Restricted
Global Securities and Restricted Definitive Securities and pursuant to and in
accordance with the Securities Act and any applicable securities laws of any
state of the United States, and is supported by a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and, if such
transfer is in respect of a principal amount of Securities of less than
$250,000, an Opinion of Counsel provided by the Transferor or Transferee.

 

4.  o  Check if Transferee will
take delivery of a beneficial interest in an Unrestricted Global Security or of
an Unrestricted Definitive Security.

 

(a)  o  Check if Transfer is
pursuant to Rule 144.  (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under
the Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act.  Upon consummation of
the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Security will no longer be
subject to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Securities, on Restricted Definitive
Securities and in the Indenture.

 

(b)  o  Check if Transfer is
Pursuant to Regulation S.  (i)
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable securities laws of
any state of the United States and (ii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance 

 

B-2

 

with the Securities
Act.  Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Security will no longer be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Securities, on Restricted Definitive Securities and in the
Indenture.

 

(c)  o  Check if Transfer is
Pursuant to Other Exemption. 
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other than
Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable securities laws of any State of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. 
Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Security
will not be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Securities or Restricted
Definitive Securities and in the Indenture.

 

This certificate and the statements contained herein
are made for your benefit and the benefit of the Company.

 

	
   

  	
   

  
	
   

  	
   

  	
  [Insert
  Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
						

 

B-3

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

Pogo
Producing Company

P. O. Box 2504

Houston, Texas 77252-2504

 

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

600 Pearl Street, Suite 420

Dallas, Texas 75201

Attention: 
Corporate Trust Department

 

Re:  Pogo Producing Company
6.625% Senior Subordinated Notes due 2015

 

(CUSIP
[730448 AQ 0](1)  [U72645 AB 7](2)

 

Reference is hereby made to the Indenture, dated as of
March 29, 2005 (the “Indenture”),
between Pogo Producing Company (the “Company”) and
The Bank of New York Trust Company, N.A., as trustee.  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

                                               
(the “Owner”) owns and proposes to exchange
the Security[s]
or interest in such Security[s] specified herein, in the principal amount of $                                
in such Security[s]
or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:

 

1.                                       Exchange of Restricted Definitive Securities or
Beneficial Interests in a Restricted Global Security for Unrestricted
Definitive Securities or Beneficial Interests in an Unrestricted Global
Security

 

(a)  o                Check if Exchange is from beneficial interest in a Restricted Global
Security to beneficial interest in an Unrestricted Global Security.  In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Security for a beneficial
interest in an Unrestricted Global Security in an equal principal amount, the
Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Securities
and pursuant to and in accordance with the Securities Act of 1933, as amended
(the “Securities Act”), (iii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Security is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.

 

(1)                                  For
Securities sold in reliance on Rule 144A.

 

(2)                                  For
Securities sold in reliance on Regulation S.

 

C-1

 

(b)  o               Check if Exchange is from Restricted Definitive Security to
Unrestricted Definitive Security. 
In connection with the Owner’s Exchange of a Restricted Definitive
Security for an Unrestricted Definitive Security, the Owner hereby certifies
(i) the Unrestricted Definitive Security is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Securities
and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Security is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

 

This certificate and the statements contained herein
are made for your benefit and the benefit of the Company.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
						

 

 

C-2

 

EXHIBIT D

 

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

                                    ,          

 

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

as Trustee and
Registrar

600 Pearl Street, Suite
420

Dallas, Texas 75201

Attention:  Corporate
Trust Department

 

Ladies and
Gentlemen:

 

We are
delivering this letter in connection with our purchase of 6.625% Senior
Subordinated Notes due 2015 (the “Notes”)
of Pogo Producing Company (the “Company”). 
We hereby confirm that:

 

(i)                                     we are an “accredited investor”
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
of 1933, as amended (the “Securities Act”), or an entity in which all of the
equity owners are accredited investors within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (an “Institutional Accredited
Investor”);

 

(ii)                                  any purchase of Notes by us will
be for our own account or, if we are buying for one or more institutional
accounts for which we are acting as fiduciary or agent and we are not a bank
(as defined in Section 3(a)(2) of the Securities Act) or a savings and loan
association or other institution (as defined in Section 3(a)(5)(A) of the
Securities Act), each such account is an Institutional Accredited Investor;

 

(iii)                               we have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of purchasing Notes and we, and any accounts for which we
are acting, are able to bear the economic risks of its or their investment;

 

(iv)                              we are not acquiring Notes with
a view to any distribution thereof in a transaction that would violate the
Securities Act or the securities laws of any State of the United States or any
other applicable jurisdiction; provided,
however, that the disposition of
our property and the property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and

 

(v)                                 we acknowledge that we have had
access to such financial and other information, and have been afforded the
opportunity to ask such questions of representatives of the Company and receive
answers thereto, as we deem necessary in connection with our decision to
purchase Notes.

 

We understand
that the Notes were offered in a transaction not involving any public offering
within the meaning of the Securities Act and that the Notes have not been
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for

 

D-1

 

which
we acquire any Notes, that such Notes may be offered, resold, pledged or
otherwise transferred only (i) in the United States to a person whom we
reasonably believe to be a qualified institutional buyer (as defined in Rule
144A under the Securities Act) in a transaction meeting the requirements of
Rule 144A under the Securities Act, (ii) in a transaction meeting the
requirements of Rule 144 under the Securities Act, (iii) outside the United
States in a transaction meeting the requirements of Rule 903 or 904 under the
Securities Act, (iv) to the Company, (v) to another Institutional accredited
Investor, or (vi) pursuant to an effective registration statement, and, in each
case, in accordance with any applicable securities laws of any State of the United
States, and we will, and each subsequent holder of the Notes is required to,
notify any subsequent purchaser from us or it of the resale restrictions set
forth in clauses (i) – (vi) above.  We
acknowledge that the Notes will bear legends substantially to the foregoing
effect.  We understand that the registrar
will not be required to accept for registration of transfer any Notes, except
upon presentation of evidence satisfactory to the Company that the foregoing restrictions
on transfer have been complied with.

 

We acknowledge
that you and the Company will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete.

 

THIS LETTER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Name of Purchaser]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
  Address:

  	
   

  

 

D-2

 

EXHIBIT E

 

FORM OF NOTATION OF SUBSIDIARY GUARANTEE

 

For value
received, the undersigned Subsidiary Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally, with each
other Subsidiary Guarantor, unconditionally guaranteed, to the extent set forth
in, and subject to the provisions of, the Indenture dated as of March 29, 2005
(the “Indenture”) between Pogo Producing
Company (the “Company”), and The Bank of New
York Trust Company, N.A., as trustee (the “Trustee”), (a)
the full and punctual payment of the principal of, premium, if any, and
interest [including Special Interest,]* on the Securities (as defined in the
Indenture) when due, whether at Stated Maturity, or upon optional redemption,
required repurchase pursuant to Section 4.8 or Section 4.14 of
the Indenture, acceleration or otherwise, and all other monetary obligations
owing by the Company under the Indenture (including obligations owing to the
Trustee) and the Securities, all as more fully provided in Article XI of
the Indenture.  The obligations of the
undersigned Subsidiary Guarantor to the Holders of Securities and to the
Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly
set forth in Article XI of the Indenture and reference is hereby made to
the Indenture for the precise terms of the Subsidiary Guarantee.  Each Holder of a Security, by accepting the
same, (a) agrees to and shall be bound by such provisions and (b) appoints the
Trustee attorney-in-fact of such Holder for such purpose; provided,
however, that each Subsidiary Guarantee shall be subject to release
in accordance with the provisions of the Indenture.

 

	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF GUARANTOR(S)]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-1

 

EXHIBIT F

 

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY FUTURE SUBSIDIARY GUARANTORS

 

THIS
SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”),
is dated as of                         ,
20   , among [Name of Future Subsidiary Guarantor(s)] (the “New  Subsidiary Guarantor”),
a subsidiary of Pogo Producing Company, a Delaware corporation (the “Company”), the other Subsidiary Guarantors (as defined in
the Indenture referred to herein), the Company and The Bank of New York Trust
Company, N.A., as trustee under the Indenture referred to herein (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the
Company has heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of March 29, 2005,
providing for the issuance of its 6.625% Senior Subordinated Notes due 2015
(the “Securities”);

 

WHEREAS, Section
4.11 of the Indenture provides that in certain circumstances the Company
will require a Restricted Subsidiary to execute and deliver a supplemental
indenture to the Indenture providing for a Subsidiary Guarantee of such
Restricted Subsidiary, and such circumstances have arisen in relation to the
New Subsidiary Guarantor; and

 

WHEREAS,
pursuant to Article XI of the Indenture, the Company and the Trustee are
authorized to execute and deliver this Supplemental Indenture to amend the
Indenture without the consent of any Holder.

 

NOW THEREFORE,
in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Subsidiary
Guarantors, the Company and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Securities as follows:

 

1.                                       CAPITALIZED TERMS.  Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

 

2.                                       AGREEMENT TO GUARANTEE.  The New Subsidiary Guarantor hereby agrees,
jointly and severally, with all other Subsidiary Guarantors, to unconditionally
Guarantee to each Holder and to the Trustee the Obligations, to the extent set
forth in the Indenture and subject to the provisions in the Indenture.  The obligations of the Subsidiary Guarantors
to the Holders of Securities and to the Trustee pursuant to the Subsidiary
Guarantees and the Indenture are expressly set forth in Article XI of
the Indenture and reference is hereby made to the Indenture for the precise
terms of the Subsidiary Guarantees.

 

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

 

F-1

 

agrees
to the subordination provisions contained in the Indenture and authorizes the
Trustee to give them effect.

 

4.                                       EXECUTION AND DELIVERY.  Each Subsidiary Guarantor agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Subsidiary Guarantee.

 

5.                                       NEW YORK LAW TO GOVERN.  THE LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE.

 

6.                                       COUNTERPARTS.  The parties may sign any number of copies of
this Supplemental Indenture.  Each signed
copy shall be an original, but all of them together represent the same
agreement.

 

7.                                       EFFECT OF HEADINGS.  The Section headings herein are for
convenience only and shall not affect the construction hereof.

 

8.                                       THE TRUSTEE.  The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Subsidiary Guarantors and the
Company.  This Supplemental Indenture is
executed and accepted by the Trustee subject to all the terms set forth in the
Indenture with the same force and effect as if those terms were repeated at length
herein and made applicable to the Trustee with respect hereto.

 

F-2

 

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

 

Dated:                         ,
20   

 

	
   

  	
  [NEW SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [OTHER SUBSIDIARY GUARANTORS]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY, N.A.,

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

F-3

 

SCHEDULE I

 

CASH
EQUIVALENT INVESTMENTS

 

The Existing
Credit Facility defines Cash Equivalent Investments to mean, at any time:

 

(a)                                  securities maturing not more
than one year after such time, issued or guaranteed by the United States
Government or any Government Sponsored Enterprise;

 

(b)                                 commercial paper, maturing not
more than nine moths from the date of issue, which is issued (i) a corporation
(other than an Affiliate or a Subsidiary of the Company) organized under the
laws of any state of the United States or of the District of Columbia and
having an Investment Grade Rating or (ii) any lender (or its holding company)
party to the Existing Credit Facility (“Lender”);

 

(c)                                  any certificate of deposit,
banker’s acceptance or other bank obligations, maturing not more than one year
after such time, which is issued by either (i) a commercial banking institution
that is a member of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $100,000,000 or (ii) any Lender;

 

(d)                                 any repurchase agreement entered
into with any Lender (or other commercial banking institution of the state
referred to in clause (c)(i) above that (i) is secured by a fully perfected
security interest in any obligation of the type described in any of clauses (a)
through (c) above, and (ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase obligation of
such Lender (or other commercial banking institution) thereunder;

 

(e)                                  any loan participation in a loan
which is to a borrower with a long-term unsecured debt rating of investment
grade or higher from any nationally recognized rating agency and is made by (i)
a commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$100,000,000 or (ii) any Lender;

 

(f)                                    any evidence of indebtedness,
maturing not more than one year after such time, issued or guaranteed by any
agency or instrumentality of the United States Government, which has a rating
of “A-” or better from S&P or a rating of “A3” or better from Moody’s;

 

(g)                                 any interest bearing account at,
or certificate of deposit maturing not more than one year after such time
issued by, a U.S. savings and loan association which has a rating of “A-“ or
better from S&P or a rating of “A3” or
better from Moody’s on its long-term unsecured debt and which has combined
capital and surplus and undivided profits of not less than $100,000,000;

 

(h)                                 any interest bearing account at,
or certificate of deposit maturing not more than one year after such time,
payable in U.S. dollars and issued by, (i) a foreign banking institution or
foreign branch of a U.S. banking institution, which banking institution has a
rating of “A-” or

 

I-1

 

better
from S&P or a rating of “A3” or better from Moody’s on its long-term
unsecured debt and combined capital and surplus and undivided profits of not
less than $100,000,000, or (ii) any foreign subsidiary of a U.S. banking
institution, which U.S. banking institution has a rating of “A-” or better from
S&P or a rating of “A3” or better from Moody’s and which subsidiary has
combined capital and surplus and undivided profits of not less than
$100,000,000 or (iii) any Lender;

 

(i)                                     any evidence of Indebtedness
(including variable rate demand notes), maturing not more than one year after
such time, issued by any State of the United States, by any county or
municipality organized or incorporated under the laws of any State of the
United States or by any agency or subdivision of any of the foregoing, in each
case rated “A-” or better by S&P or rated “A3” or better by Moody’s;

 

(j)                                     any auction rate or preferred
securities issued by domestic or foreign corporations, municipalities or
closed-end management investment companies that are designed as short term
money market instruments and are rated “A-” or better by S&P or “A3” or
better by Moody’s, provided that
such Investment will not result in any violation of Federal Reserve System
Board Regulation U and further provided
that the Company’s ownership interest will not exceed (and will not be
convertible into shares which exceed) 5% of the issuer’s outstanding shares
entitled to vote unless such ownership interest is acquired pursuant to a
merger agreement between the Company and such issuer;

 

(k)                                  any mutual funds or similar
investment vehicles investing primarily in Investments of the types set forth
in the foregoing clauses (a) through (j), provided
that ratings requirements shall be applicable to the mutual fund rather than
the underlying Investments, as follows: such mutual funds shall, in each case,
have a rating of “A-” or better from S&P or a rating of “A3” from Moody’s
or a rating satisfactory to the Administrative Agent under the Existing Credit
Facility from another recognized rating agency satisfactory to the
Administrative Agent, provided, however,
that (i) any Investment which when made complies with the requirements of any
of the foregoing clauses (f), (g) or (h) may continue to be held
notwithstanding that such Investment if made thereafter would not comply with
such requirements; and (ii) no Investment otherwise permitted by clause (i) or
(j) shall be permitted to be made directly or indirectly through a mutual fund
if, immediately or after giving effect thereto, any Default shall have occurred
and be continuing; and

 

(l)                                     any Investments outside the
United States by the Company or any of its Restricted Subsidiaries which are
the functional foreign equivalents in all material respects to the Investments
described in the foregoing clauses (a) through (g), (i) and (k); provided, however, that at no time may the
aggregate amount of any individual Investment permitted under this clause (l)
constitute more than 10% of the total principal amount of any applicable mutual
fund or other similar investment vehicle in which the Investment has been made.

 

I-2Exhibit 4.3

 

Pogo
Producing Company

 

$300,000,000
Principal Amount of

6.625% Senior Subordinated Notes due 2015

 

 

Exchange
and Registration Rights Agreement

 

March 29, 2005

 

Goldman, Sachs & Co.,

  As representative of the several Purchasers

  named in Schedule I to the Purchase Agreement

85 Broad Street

New York, New York 10004

 

Ladies and Gentlemen:

 

Pogo Producing Company, a Delaware
corporation (the “Company”), proposes to issue and sell to the Purchasers (as
defined herein) upon the terms set forth in the Purchase Agreement (as defined
herein) $300,000,000 principal amount of its 6.625% Senior Subordinated Notes
due 2015.

 

As an inducement to the Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees with the
Purchasers for the benefit of holders (as defined herein) from time to time of
the Registrable Securities (as defined herein) as follows:

 

1.                                      Certain
Definitions.  For purposes of this
Exchange and Registration Rights Agreement, the following terms shall have the
following respective meanings:

 

“Base
Interest” shall mean the interest that would otherwise accrue on the
Securities under the terms thereof and the Indenture, without giving effect to
the provisions of this Agreement.

 

The term “broker-dealer”
shall mean any broker or dealer registered with the Commission under the
Exchange Act.

 

“Closing
Date” shall mean the date on which the Securities are initially
issued.

 

“Commission”
shall mean the United States Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities
Act, whichever is the relevant statute for the particular purpose.

 

“DTC”
shall mean The Depository Trust Company.

 

“Effective
Time,” in the case of (i) an Exchange Registration, shall mean
the time and date as of which the Commission declares the Exchange Registration
Statement effective or as of which the Exchange Registration Statement
otherwise becomes effective and (ii) a Shelf

 

 

Registration, shall mean the time and date as of which the Commission
declares the Shelf Registration Statement effective or as of which the Shelf
Registration Statement otherwise becomes effective.

 

“Electing
Holder” shall mean any holder of Registrable Securities that has
returned a completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.

 

“Exchange
Offer” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange
Registration” shall have the meaning assigned thereto in Section 3(c) hereof.

 

“Exchange
Registration Statement” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange
Securities” shall have the meaning assigned thereto in Section 2(a) hereof.

 

The term “holder”
shall mean each of the Purchasers and other persons who acquire Registrable
Securities from time to time (including any successors or assigns), in each
case for so long as such person owns any Registrable Securities.

 

“Indenture”
shall mean the Indenture, dated as of March 29, 2005, between the Company
and The Bank of New York Trust Company, N.A., as Trustee, as the same shall be
amended from time to time.

 

“Notice
and Questionnaire” means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.

 

The term “person”
shall mean a corporation, association, partnership, organization, business,
individual, government or political subdivision thereof or governmental agency.

 

“Purchase
Agreement” shall mean the Purchase Agreement, dated March 23,
2005, between the Purchasers and the Company relating to the Securities.

 

“Purchasers”
shall mean the Purchasers named in Schedule I to the Purchase Agreement.

 

“Registrable
Securities” shall mean the Securities; provided, however, that a
Security shall cease to be a Registrable Security when (i) in the
circumstances contemplated by Section 2(a) hereof, the Security has
been exchanged for an Exchange Security in an Exchange Offer as contemplated in
Section 2(a) hereof (provided that
any Exchange Security that, pursuant to the last two sentences of Section 2(a),
is included in a prospectus for use in connection with resales by
broker-dealers shall be deemed to be a Registrable Security with respect to
Sections 5, 6 and 9 until termination of the Resale Period; (ii) in
the circumstances contemplated by Section 2(b) hereof, a Shelf
Registration Statement registering such Security under the Securities Act has
been declared or becomes effective and such Security has been sold or otherwise
transferred by the holder thereof pursuant to and in a manner contemplated by
such effective Shelf Registration Statement; (iii) such Security is sold
pursuant to Rule 144

 

2

 

under circumstances in which any legend borne by such Security relating
to restrictions on transferability thereof, under the Securities Act or
otherwise, is removed by the Company or pursuant to the Indenture; (iv) such
Security is eligible to be sold pursuant to paragraph (k) of Rule 144; or (v) such
Security shall cease to be outstanding.

 

“Registration
Default” shall have the meaning assigned thereto in Section 2(c) hereof.

 

“Registration
Expenses” shall have the meaning assigned thereto in Section 4
hereof.

 

“Resale
Period” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Restricted
Holder” shall mean (i) a holder that is an affiliate of the
Company within the meaning of Rule 405, (ii) a holder who acquires
Exchange Securities outside the ordinary course of such holder’s business, (iii) a
holder who has arrangements or understandings with any person to participate in
the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a
holder that is a broker-dealer, but only with respect to Exchange Securities
received by such broker-dealer pursuant to an Exchange Offer in exchange for
Registrable Securities acquired by the broker-dealer directly from the Company.

 

“Rule 144,”
“Rule 405” and “Rule 415” shall mean, in each case,
such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.

 

“Securities”
shall mean the Company’s 6.625% Senior Subordinated Notes due 2015 to be issued
and sold to the Purchasers and securities issued in exchange therefor or in
lieu thereof pursuant to the Indenture.

 

“Securities
Act” shall mean the Securities Act of 1933, or any successor
thereto, as the same shall be amended from time to time.

 

“Shelf
Registration” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Shelf
Registration Statement” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Special
Interest” shall have the meaning assigned thereto in Section 2(c) hereof.

 

“Suspension
Period” shall have the meaning assigned thereto in Section 3(h) hereof.

 

“Trust
Indenture Act” shall mean the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
all as the same shall be amended from time to time.

 

“Trustee”
shall mean The Bank of New York Trust Company, N.A.

 

Unless the context otherwise requires, any
reference herein to a “Section” or “clause” refers to a Section or clause,
as the case may be, of this Exchange and Registration Rights Agreement, and the
words “herein,” “hereof” and “hereunder” and other words of similar import
refer to this Exchange and Registration Rights Agreement as a whole and not to
any particular Section or other subdivision.

 

3

 

All references to “$” shall refer to the
lawful currency of the Unites States of America.

 

2.                                      Registration
Under the Securities Act.

 

(a)                                  Except as set forth
in Section 2(b) below, the Company agrees to file under the
Securities Act, no later than 90 days after the Closing Date, a registration
statement relating to an offer to exchange (such registration statement, the “Exchange
Registration Statement”, and such offer, the “Exchange Offer”) any and all of
the Securities for a like aggregate principal amount of debt securities issued
by the Company, which debt securities are substantially identical to the
Securities (and are entitled to the benefits of a trust indenture which is
substantially identical to the Indenture or is the Indenture and which has been
qualified under the Trust Indenture Act), except that they have been registered
pursuant to an effective registration statement under the Securities Act and do
not contain provisions for the additional interest contemplated in Section 2(c) below
(such new debt securities hereinafter called “Exchange Securities”).  The Company agrees to use its reasonable best
efforts to cause the Exchange Registration Statement to become effective under
the Securities Act no later than 180 days after the Closing Date.  The Exchange Offer will be registered under
the Securities Act on the appropriate form and will comply with all applicable
tender offer rules and regulations under the Exchange Act.  The Company further agrees to use its
reasonable best efforts to commence and complete the Exchange Offer no later
than 45 days after such registration statement has become effective, hold the
Exchange Offer open for at least 30 days and exchange the Exchange Securities
for all Registrable Securities that may legally be exchanged in the Exchange
Offer and that have been properly tendered and not withdrawn on or prior to the
expiration of the Exchange Offer. The Exchange Offer will be deemed to have
been “completed” only if the debt securities received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities are, upon
receipt, transferable by each such holder without restriction under the
Securities Act (except for the requirement to deliver a prospectus included in
the Exchange Offer Registration Statement applicable to resales by certain
broker-dealers of Exchange Securities received by them pursuant to the Exchange
Offer) and the Exchange Act. The Exchange Offer shall be deemed to have been
completed upon the earlier to occur of (i) the Company having exchanged
the Exchange Securities for all outstanding Registrable Securities pursuant to
the Exchange Offer and (ii) the Company having exchanged, pursuant to the
Exchange Offer, Exchange Securities for all Registrable Securities that may
legally be exchanged in the Exchange Offer and that have been properly tendered
and not withdrawn before the expiration of the Exchange Offer, which shall be
on a date that is at least 30 days following the commencement of the Exchange
Offer. The Company agrees (x) to include in the Exchange Registration Statement
a prospectus for use in any resales by any holder of Exchange Securities that
is a broker-dealer eligible under Commission interpretations as of the date
hereof to use such a prospectus for such resales and (y) to keep such Exchange
Registration Statement effective for a period (the “Resale Period”) beginning when
Exchange Securities are first issued in the Exchange Offer and ending upon the
earlier of the expiration of the 180th day after the Exchange Offer has been
completed or such time as such broker-dealers no longer own any Registrable
Securities.  With respect to such
Exchange Registration Statement, such holders shall have the benefit of the
rights of indemnification and contribution set forth in Sections 6(a),
(c), (d) and (e) hereof.

 

(b)                                 If (i) on or
prior to the time the Exchange Offer is completed existing Commission
interpretations are changed such that the debt securities received by holders
other than Restricted Holders in the Exchange Offer for Registrable Securities
are not or would not be, upon receipt, transferable by each such holder without
restriction under the Securities Act ; (ii)

 

4

 

the Exchange Offer has not been completed within 255 days following the
Closing Date or (iii) the Exchange Offer is not available to any holder of
the Securities because of applicable law or Commission interpretations and,
unless it is a Purchaser, such holder notifies the Company of such
unavailability prior to the 60th day following consummation of the Exchange
Offer, the Company shall, in lieu of (or, in the case of clause (iii), in
addition to) conducting the Exchange Offer contemplated by Section 2(a),
use its reasonable best efforts to file under the Securities Act no later than
the later of 90 days following the Closing Date and 45 days after the time such
obligation to file arises, a “shelf” registration statement providing for the
registration of, and the sale on a continuous or delayed basis by the holders
of, all of the Registrable Securities, pursuant to Rule 415 or any similar
rule that may be adopted by the Commission (such filing, the “Shelf
Registration” and such registration statement, the “Shelf Registration
Statement”).  The Company agrees to use
its reasonable best efforts (x) to cause the Shelf Registration Statement to
become or be declared effective no later than 120 days after such Shelf
Registration Statement is filed and to keep such Shelf Registration Statement
continuously effective for a period ending on the earlier of the second
anniversary of the Effective Time or such time as there are no longer any
Registrable Securities outstanding, provided, however, that no holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the prospectus forming a part thereof for resales of
Registrable Securities unless such holder is an Electing Holder, and (y) after
the Effective Time of the Shelf Registration Statement, promptly upon the
request of any holder of Registrable Securities that is not then an Electing
Holder, to take any action reasonably necessary to enable such holder to use
the prospectus forming a part thereof for resales of Registrable Securities,
including, without limitation, any action necessary to identify such holder as
a selling securityholder in the Shelf Registration Statement; provided,
however, that nothing in this Clause (y) shall (a) relieve any such holder
of the obligation to return a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(d)(iii) hereof or (b) in
the case of a Shelf Registration under clause (iii) above, require the
Company to enable any holder not covered by such clause to use such
prospectus.  The Company further agrees
to supplement or make amendments to the Shelf Registration Statement, as and
when required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the Securities Act or rules and regulations thereunder for shelf
registration, and the Company agrees to furnish to each Electing Holder copies
of any such supplement or amendment prior to its being used or promptly
following its filing with the Commission.

 

(c)                                  In the event that (i) the
Company has not filed the Exchange Registration Statement or Shelf Registration
Statement on or before the date on which such registration statement is
required to be filed pursuant to Section 2(a) or 2(b), respectively,
or (ii) such Exchange Registration Statement or Shelf Registration
Statement has not become effective or been declared effective by the Commission
on or before the date on which such registration statement is required to
become or be declared effective pursuant to Section 2(a) or 2(b),
respectively, or (iii) the Exchange Offer has not been completed within 45
days after the initial effective date of the Exchange Registration Statement
relating to the Exchange Offer (if the Exchange Offer is then required to be
made) or (iv) any Exchange Registration Statement or Shelf Registration
Statement required by Section 2(a) or 2(b) hereof is filed and
declared effective but shall thereafter either be withdrawn by the Company or
shall become subject to an effective stop order issued pursuant to Section 8(d) of
the Securities Act suspending the effectiveness of such registration statement
(except as specifically permitted herein) without being succeeded as promptly
as practicable by an additional registration statement filed and declared
effective (each such event referred to in clauses (i) through (iv), a “Registration

 

5

 

Default” and each period during which a Registration Default has
occurred and is continuing, a “Registration Default Period”), then, as
liquidated damages for such Registration Default, subject to the provisions of Section 8(b),
special interest (“Special Interest”), in addition to the Base Interest, shall
accrue at a per annum rate of 0.25% for the first 90 days of the Registration
Default Period, at a per annum rate of 0.50% for the second 90 days of the
Registration Default Period, at a per annum rate of 0.75% for the third 90 days
of the Registration Default Period and at a per annum rate of 1.0% thereafter
for the remaining portion of the Registration Default Period.  Following the cure of all Registration
Defaults, the accrual of Special Interest shall cease.

 

(d)                                 The Company shall take
all actions reasonably necessary or advisable to be taken by it to ensure that
the transactions contemplated herein are effected as so contemplated.

 

(e)                                  Any reference herein
to a registration statement as of any time shall be deemed to include any
document incorporated, or deemed to be incorporated, therein by reference as of
such time and any reference herein to any post-effective amendment to a
registration statement as of any time shall be deemed to include any document
incorporated, or deemed to be incorporated, therein by reference as of such
time.

 

3.                                      Registration
Procedures.  If the Company files a
registration statement pursuant to Section 2(a) or Section 2(b),
the following provisions shall apply:

 

(a)                                  At or before the
Effective Time of the Exchange Offer or the Shelf Registration, as the case may
be, the Company shall qualify the Indenture under the Trust Indenture Act.

 

(b)                                 In the event that such
qualification would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.

 

(c)                                  In connection with
the Company’s obligations with respect to the registration of Exchange
Securities as contemplated by Section 2(a) (the “Exchange
Registration”), if applicable, the Company shall:

 

(i)                                     prepare
and file with the Commission no later than 90 days after the Closing Date, an
Exchange Registration Statement on any form which may be utilized by the
Company and which shall permit the Exchange Offer and resales of Exchange
Securities by broker-dealers during the Resale Period to be effected as
contemplated by Section 2(a), and use its reasonable best efforts to cause
such Exchange Registration Statement to become effective no later than 180 days
after the Closing Date;

 

(ii)                                  as
soon as practicable prepare and file with the Commission such amendments and
supplements to such Exchange Registration Statement and the prospectus included
therein as may be necessary to effect and maintain the effectiveness of such
Exchange Registration Statement for the periods and purposes contemplated in Section 2(a) hereof
and as may be required by the applicable rules and regulations of the
Commission and the instructions applicable to the form of such Exchange
Registration Statement, and promptly provide each broker-dealer holding
Exchange Securities with such number of copies of the prospectus included
therein (as then amended or supplemented), in conformity in all material
respects with the requirements of the Securities Act and the Trust Indenture
Act and the rules and

 

6

 

regulations of the Commission thereunder, as
such broker-dealer reasonably may request prior to the expiration of the Resale
Period, for use in connection with resales of Exchange Securities with respect
to which it may use such prospectus;

 

(iii)                               promptly
notify each broker-dealer that has notified the Company in writing that it is a
broker-dealer eligible to participate in the Exchange Offer and that has
requested or received copies of the prospectus included in such registration
statement, and confirm such advice in writing, (A) when such Exchange
Registration Statement or the prospectus included therein or any prospectus
amendment or supplement or post-effective amendment has been filed, and, with
respect to such Exchange Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any comments by the
Commission and by the blue sky or securities commissioner or regulator of any
state with respect thereto or any request by the Commission for amendments or
supplements to such Exchange Registration Statement or prospectus or for
additional information, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of such Exchange Registration Statement or
the initiation or threatening of any proceedings for that purpose, (D) if
at any time during the Resale Period when a prospectus is required to be
delivered under the Securities Act, the Company becomes aware that the
representations and warranties of the Company contemplated by Section 5
cease to be true and correct in all material respects, (E) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Exchange Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, or (F) at
any time during the Resale Period when a prospectus is required to be delivered
under the Securities Act, that such Exchange Registration Statement,
prospectus, prospectus amendment or supplement or post-effective amendment does
not conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations
of the Commission thereunder or contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
then existing;

 

(iv)                              in
the event that the Company would be required, pursuant to Section 3(c)(iii)(F) above,
to notify any broker-dealers holding Exchange Securities, without unreasonable
delay prepare and furnish to each such holder a reasonable number of copies of
a prospectus supplemented or amended so that, as thereafter delivered to
purchasers of such Exchange Securities during the Resale Period, such
prospectus shall conform in all material respects to the applicable requirements
of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and shall not contain an 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 not misleading in
light of the circumstances then existing; and each such broker-dealer agrees
that upon receipt of any notice from the Company pursuant to Section 3(c)(iii)(F) it
shall forthwith discontinue the disposition of Exchange Securities pursuant to
the Exchange Offer Registration Statement applicable to such Exchange
Securities until such broker-dealer shall have received copies of such amended
or supplemented prospectus, and if so directed by the Company, such broker-dealer
shall deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies, then in such broker-dealer’s possession of the
prospectus covering such Exchange Securities at the time of receipt of such
notice;

 

7

 

(v)                                 use
its reasonable best efforts to obtain the withdrawal of any order suspending
the effectiveness of such Exchange Registration Statement or any post-effective
amendment thereto at the earliest practicable date;

 

(vi)                              if
required, use its reasonable best efforts to (A) register or qualify the
Exchange Securities under the securities laws or blue sky laws of such
jurisdictions as are contemplated by Section 2(a) no later than the
commencement of the Exchange Offer, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions until
the expiration of the Resale Period and (C) take any and all other actions
as may be reasonably necessary or advisable to enable each broker-dealer
holding Exchange Securities that is eligible to use the prospectus included in
the Exchange Registration Statement in connection with resales thereof to
consummate the disposition thereof in such jurisdictions; provided, however,
that the Company shall not be required for any such purpose to (1) qualify
as a foreign corporation in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(c)(vi), (2) consent
to general service of process in any such jurisdiction, qualify as a dealer in
securities in an jurisdiction in which it is not so qualified or subject itself
to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject or (3) make any changes to its certificate of
incorporation or bylaws or any agreement between it and its stockholders;

 

(vii)                           use its
reasonable best efforts to obtain the consent or approval of each governmental
agency or authority, whether federal, state or local, which may be required to
effect the Exchange Registration, the Exchange Offer and the offering and sale
of Exchange Securities by broker-dealers that are eligible to use the
prospectus included in the Exchange Registration Statement in connection with
resales thereof during the Resale Period;

 

(viii)                        provide a
CUSIP number for all Exchange Securities, not later than the applicable
Effective Time;

 

(ix)                                comply
with all applicable rules and regulations of the Commission, and make
generally available to the Company’s securityholders as soon as practicable but
no later than 18 months after the effective date of such Exchange Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of
the Company, Rule 158 thereunder).

 

(d)                                 In connection with the
Company’s obligations with respect to the Shelf Registration, if applicable,
the Company shall:

 

(i)                                     prepare
and file with the Commission within the time periods specified in and subject
to the terms of Section 2(b), a Shelf Registration Statement on any form
which may be utilized by the Company and which shall register all of the
Registrable Securities for resale by the holders thereof, in accordance with
such method or methods of disposition as may be specified by such of the
holders as, from time to time, may be Electing Holders, and use its reasonable
best efforts to cause such Shelf Registration Statement to become effective within
the time periods specified in Section 2(b);

 

8

 

(ii)                                  not
less than 30 calendar days prior to the Effective Time of the Shelf
Registration Statement, mail the Notice and Questionnaire to the holders of record
of Registrable Securities (or, if the Securities are then in book-entry form,
to all of the direct participants of DTC that DTC identifies to the Company on
a security position listing as holders of the Securities); no holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no holder shall be entitled to use the
prospectus forming a part thereof for resales of Registrable Securities at any
time, unless such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth therein;
provided, however, holders of Registrable Securities shall have at least 28
calendar days from the date on which the Notice and Questionnaire is first
mailed to such holders to return a completed and signed Notice and
Questionnaire to the Company;

 

(iii)                               after
the Effective Time of the Shelf Registration Statement, upon the request of any
holder of Registrable Securities that is not then an Electing Holder, promptly
send a Notice and Questionnaire to such holder; provided, however, that the
Company shall not be required to take any action to name such holder as a
selling securityholder in the Shelf Registration Statement or to enable such
holder to use the prospectus forming a part thereof for resales of Registrable
Securities until such holder has returned a completed and signed Notice and
Questionnaire to the Company and then only if such holder is eligible to be so
named or to use such prospectus pursuant to Section 2(b);

 

(iv)                              as
soon as practicable prepare and file with the Commission such amendments and
supplements to such Shelf Registration Statement and the prospectus included
therein as may be necessary to effect and maintain the effectiveness of such
Shelf Registration Statement for the period specified in Section 2(b) hereof
and as may be required by the applicable rules and regulations of the
Commission and the instructions applicable to the form of such Shelf
Registration Statement, and furnish to the Electing Holders copies of any such
supplement or amendment simultaneously with or prior to its being used or filed
with the Commission;

 

(v)                                 comply
with the provisions of the Securities Act with respect to the disposition of
all of the Registrable Securities covered by such Shelf Registration Statement
in accordance with the intended methods of disposition by the Electing Holders
provided for in such Shelf Registration Statement;

 

(vi)                              provide
(A) the Electing Holders, (B) the underwriters (which term, for
purposes of this Exchange and Registration Rights Agreement, shall include a
person deemed to be an underwriter within the meaning of Section 2(a)(11)
of the Securities Act), if any, thereof, (C) any sales or placement agent
therefor, (D) not more than one counsel for any such underwriter or agent
and (E) not more than one counsel for all the Electing Holders the
opportunity to participate in the preparation of such Shelf Registration
Statement, each prospectus included therein or filed with the Commission and
each amendment or supplement thereto;

 

(vii)                           for a
reasonable period prior to the filing of such Shelf Registration Statement, and
throughout the period specified in Section 2(b), make available at
reasonable times at the Company’s principal place of business or such other
reasonable

 

9

 

place for inspection by the persons referred
to in Section 3(d)(vi) who shall certify to the Company that they
have a current intention to sell the Registrable Securities pursuant to the
Shelf Registration such financial and other information and books and records
of the Company, and cause the officers, employees, counsel and independent
certified public accountants of the Company to respond to such inquiries, as
shall be reasonably necessary, in the judgment of the respective counsel
referred to in such Section, to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act; provided, however, that each
such party shall be required to maintain in confidence and not to disclose to
any other person any information or records reasonably designated by the
Company as being confidential, until such time as (A) such information
becomes a matter of public record (whether by virtue of its inclusion in such
registration statement or otherwise, but not because of disclosure,
unauthorized by the Company or its representatives, by such person or its
representatives), or (B) such person shall be required so to disclose such
information pursuant to a subpoena or order of any court or other governmental
agency or body having jurisdiction over the matter (subject to the requirements
of such order, and only after such person shall have given the Company prompt
prior written notice of such requirement), or (C) such information is
required to be set forth in such Shelf Registration Statement or the prospectus
included therein or in an amendment to such Shelf Registration Statement or an
amendment or supplement to such prospectus in order that such Shelf Registration
Statement, prospectus, amendment or supplement, as the case may be, complies
with applicable requirements of the federal securities laws and the rules and
regulations of the Commission and does not contain an untrue statement of a
material fact or omit to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing;

 

(viii)                        promptly
notify each of the Electing Holders, any sales or placement agent therefor and
any underwriter thereof (which notification may be made through any managing
underwriter that is a representative of such underwriter for such purpose) and
confirm such advice in writing, (A) when such Shelf Registration Statement
or the prospectus included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such Shelf
Registration Statement or any post-effective amendment, when the same has
become effective, (B) of any comments by the Commission and by the blue
sky or securities commissioner or regulator of any state with respect thereto
or any request by the Commission for amendments or supplements to such Shelf
Registration Statement or prospectus or for additional information, (C) of
the issuance by the Commission of any stop order suspending the effectiveness
of such Shelf Registration Statement or the initiation or threatening of any
proceedings for that purpose, (D) if at any time when a prospectus is
required to be delivered under the Securities Act, the Company becomes aware
that the representations and warranties of the Company contemplated by Section 3(d)(xvii)
or Section 5 cease to be true and correct in all material respects, (E) of
the receipt by the Company of any notification with respect to the suspension
of the qualification of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, or (F) if
at any time when a prospectus is required to be delivered under the Securities
Act, that such Shelf Registration Statement, prospectus, prospectus amendment
or supplement or post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission thereunder or contains
an untrue statement of a material fact or omits to state any material fact
required to be

 

10

 

stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;

 

(ix)                                use
its reasonable best efforts to obtain the withdrawal of any order suspending
the effectiveness of such registration statement or any post-effective
amendment thereto at the earliest practicable date;

 

(x)                                   if
requested by any managing underwriter or underwriters, any placement or sales
agent or any Electing Holder, promptly incorporate in a prospectus supplement
or post-effective amendment such information as is required by the applicable rules and
regulations of the Commission and as such managing underwriter or underwriters,
such agent or such Electing Holder reasonably specifies should be included
therein relating to the terms of the sale of such Registrable Securities,
including information with respect to the principal amount of Registrable
Securities being sold by such Electing Holder or agent or to any underwriters,
the name and description of such Electing Holder, agent or underwriter, the
offering price of such Registrable Securities and any discount, commission or
other compensation payable in respect thereof, the purchase price being paid
therefor by such underwriters and with respect to any other terms of the
offering of the Registrable Securities to be sold by such Electing Holder or
agent or to such underwriters; and make all required filings of such prospectus
supplement or post-effective amendment promptly after notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment;

 

(xi)                                furnish
to each Electing Holder, each placement or sales agent, if any, therefor, each
underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(vi) an
executed copy (or, in the case of an Electing Holder, a conformed copy) of such
Shelf Registration Statement, each such amendment and supplement thereto (in
each case excluding all exhibits thereto and documents incorporated by
reference therein unless specifically requested) and such number of copies of
such Shelf Registration Statement (excluding exhibits thereto and documents
incorporated by reference therein unless specifically so requested by such
Electing Holder, agent or underwriter, as the case may be) and of the
prospectus included in such Shelf Registration Statement (including each
preliminary prospectus and any summary prospectus), in conformity in all
material respects with the applicable requirements of the Securities Act and
the Trust Indenture Act and the rules and regulations of the Commission thereunder,
and such other documents, as such Electing Holder, agent, if any, and
underwriter, if any, may reasonably request in order to facilitate the offering
and disposition of the Registrable Securities owned by such Electing Holder,
offered or sold by such agent or underwritten by such underwriter and to permit
such Electing Holder, agent and underwriter to satisfy the prospectus delivery
requirements of the Securities Act; and the Company hereby consents to the use
of such prospectus (including such preliminary and summary prospectus) and any
amendment or supplement thereto by each such Electing Holder and by any such
agent and underwriter, in each case in the form most recently provided to such
person by the Company, in connection with the offering and sale of the
Registrable Securities covered by the prospectus (including such preliminary
and summary prospectus) or any supplement or amendment thereto;

 

(xii)                             use
its reasonable best efforts to (A) register or qualify the Registrable
Securities to be included in such Shelf Registration Statement under such
securities

 

11

 

laws or blue sky laws of such jurisdictions
as any Electing Holder and each placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers, sales and dealings therein in such
jurisdictions during the period the Shelf Registration is required to remain
effective under Section 2(b) above and for so long as may be
necessary to enable any such Electing Holder, agent or underwriter to complete
its distribution of Securities pursuant to such Shelf Registration Statement
(so long as such distribution is commenced during the period during which the
Shelf Registration Statement is required to remain effective pursuant to Section 2(b))
and (C) take any and all other actions as may be reasonably necessary or
advisable to enable each such Electing Holder, agent, if any, and underwriter,
if any, to consummate the disposition in such jurisdictions of such Registrable
Securities; provided, however, that the Company shall not be required for any
such purpose to (1) qualify as a foreign corporation in any jurisdiction
wherein it would not otherwise be required to qualify but for the requirements
of this Section 3(d)(xii), (2) consent to general service of process
in any such jurisdiction, qualify as a dealer in securities in an jurisdiction
in which it is not so qualified or subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject or (3) make
any changes to its certificate of incorporation or bylaws or any agreement
between it and its stockholders;

 

(xiii)                          use its
reasonable best efforts to obtain the consent or approval of each governmental
agency or authority, whether federal, state or local, which may be required to
effect the Shelf Registration or the offering or sale in connection therewith
or to enable the selling holder or holders to offer, or to consummate the
disposition of, their Registrable Securities;

 

(xiv)                         unless
any Registrable Securities shall be in book-entry only form, cooperate with the
Electing Holders and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates, if so required by any securities
exchange upon which any Registrable Securities are listed, shall be printed,
lithographed or engraved, or produced by any combination of such methods, on
steel engraved borders, and which certificates shall not bear any restrictive
legends; and, in the case of an underwritten offering, enable such Registrable
Securities to be in such denominations and registered in such names as the
managing underwriters may request at least two business days prior to any sale
of the Registrable Securities;

 

(xv)                            provide
a CUSIP number for all Registrable Securities, not later than the applicable
Effective Time;

 

(xvi)                         enter
into one or more underwriting agreements, engagement letters, agency
agreements, “best efforts” underwriting agreements or similar agreements, as
appropriate, including customary provisions relating to indemnification and
contribution, and take such other actions in connection therewith as any
Electing Holders aggregating at least 20% in aggregate principal amount of the
Registrable Securities at the time outstanding shall request and as are
customarily taken in order to expedite or facilitate the disposition of such
Registrable Securities;

 

12

 

(xvii)                      whether or
not an agreement of the type referred to in Section 3(d)(xvi) hereof is
entered into and whether or not any portion of the offering contemplated by the
Shelf Registration is an underwritten offering or is made through a placement
or sales agent or any other entity, (A) make such representations and
warranties to the Electing Holders and the placement or sales agent, if any,
therefor and the underwriters, if any, thereof in form, substance and scope as
are customarily made in connection with an offering of debt securities pursuant
to any appropriate agreement or to a registration statement filed on the form
applicable to the Shelf Registration; (B) obtain an opinion or opinions of
counsel of or to the Company in customary form and covering such matters, of
the type customarily covered by such an opinion, as the managing underwriters,
if any, or as any Electing Holders of at least 20% in aggregate principal
amount of the Registrable Securities at the time outstanding may reasonably
request, addressed to such Electing Holder or Electing Holders and the
placement or sales agent, if any, therefor and the underwriters, if any, thereof
and dated the effective date of such Shelf Registration Statement (and if such
Shelf Registration Statement contemplates an underwritten offering of a part or
all of the Registrable Securities, dated the date of the closing under the
underwriting agreement relating thereto) (it being agreed that the matters to
be covered by such opinions shall include the due formation and good standing
of the Company and certain of its subsidiaries; the due authorization,
execution and delivery of the relevant agreement of the type referred to in Section 3(d)(xvi)
hereof; the due authorization, execution, authentication and issuance, and the
validity and enforceability, of the Securities; the absence of material legal
or governmental proceedings involving the Company; the absence of a breach by
the Company or any of its subsidiaries of, or a default under, material
agreements binding upon the Company or any subsidiary of the Company as a
result of the contemplated transaction; the absence of certain governmental
approvals required to be obtained in connection with the Shelf Registration,
the offering and sale of the Registrable Securities, this Exchange and
Registration Rights Agreement or any agreement of the type referred to in Section 3(d)(xvi)
hereof, except such approvals as may be required under state securities or blue
sky laws; the material compliance as to form of such Shelf Registration
Statement and any documents incorporated by reference therein and of the
Indenture with the requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission thereunder,
respectively; and, a statement that as of the date of the opinion and of the
Shelf Registration Statement or most recent post-effective amendment thereto,
as the case may be, no facts have come to the attention to such counsel that
would lead such counsel to believe that such Shelf Registration Statement and
the prospectus included therein, as then amended or supplemented, and from the
documents incorporated by reference therein (in each case other than the
financial statements and other financial or reserve information contained
therein) of an untrue statement of a material fact or the omission to state
therein a material fact necessary to make the statements therein not misleading
(in the case of such documents, in the light of the circumstances existing at
the time that such documents were filed with the Commission under the Exchange
Act); provided, however, that such opinions may include customary
qualifications and limitations and shall not be materially more extensive in
scope and content than the opinions of counsel to or of the Company under the
Purchase Agreement); (C) obtain a “cold comfort” letter or letters from
the independent registered public accountants of the Company addressed to the
selling Electing Holders, the placement or sales agent, if any, therefor or the
underwriters, if any, thereof, dated (i) the effective date of such Shelf
Registration Statement and (ii) the effective date of any prospectus
supplement to the prospectus

 

13

 

included in such Shelf Registration Statement
or post-effective amendment to such Shelf Registration Statement which includes
unaudited or audited financial statements as of a date or for a period
subsequent to that of the latest such statements included in such prospectus
(and, if such Shelf Registration Statement contemplates an underwritten
offering pursuant to any prospectus supplement to the prospectus included in
such Shelf Registration Statement or post-effective amendment to such Shelf
Registration Statement which includes unaudited or audited financial statements
as of a date or for a period subsequent to that of the latest such statements
included in such prospectus, dated the date of the closing under the
underwriting agreement relating thereto), such letter or letters to be in
customary form and covering such matters of the type customarily covered by
letters of such type; (D) deliver such documents and certificates, including
officers’ certificates, as may be reasonably requested by any Electing Holders
of at least 20% in aggregate principal amount of the Registrable Securities at
the time outstanding or the placement or sales agent, if any, therefor and the
managing underwriters, if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above or those
contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (E) undertake
such obligations relating to expense reimbursement, indemnification and
contribution as are provided in Section 6 hereof;

 

(xviii)                   notify in
writing each holder of Registrable Securities affected thereby of any proposal
by the Company to amend or waive any provision of this Exchange and
Registration Rights Agreement pursuant to Section 9(h) hereof and of
any amendment or waiver effected pursuant thereto, each of which notices shall
contain the text of the amendment or waiver proposed or effected, as the case
may be;

 

(xix)                           in the
event that any broker-dealer registered under the Exchange Act shall underwrite
any Registrable Securities or participate as a member of an underwriting
syndicate or selling group or “assist in the distribution” (within the meaning
of the Conduct Rules (the “Conduct Rules”) of the National Association of
Securities Dealers, Inc. (“NASD”) or any successor thereto, as amended
from time to time) thereof, whether as a holder of such Registrable Securities
or as an underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, assist such broker-dealer in complying with the
requirements of such Conduct Rules, including by (A) if such Conduct Rules shall
so require, engaging a “qualified independent underwriter” (as defined in such
Conduct Rules) to participate in the preparation of the Shelf Registration
Statement relating to such Registrable Securities, to exercise usual standards
of due diligence in respect thereto and, if any portion of the offering
contemplated by such Shelf Registration Statement is an underwritten offering
or is made through a placement or sales agent, to recommend the yield of such
Registrable Securities, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters provided in Section 6
hereof (or to such other customary extent as may be requested by such
underwriter) and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the requirements
of the Conduct Rules; and

 

(xx)                              comply
with all applicable rules and regulations of the Commission, and make
generally available to its securityholders as soon as practicable but in any
event not later than eighteen months after the effective date of such Shelf
Registration

 

14

 

Statement, an earning statement of the
Company and its subsidiaries complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158
thereunder).

 

(e)                                  In the event that the
Company would be required, pursuant to Section 3(d)(viii)(F) above,
to notify the Electing Holders, the placement or sales agent, if any, therefor
and the managing underwriters, if any, thereof, the Company shall without
unreasonable delay prepare and furnish to each of the Electing Holders, to each
placement or sales agent, if any, and to each such underwriter, if any, a reasonable
number of copies of a prospectus supplemented or amended so that, as thereafter
delivered to purchasers of Registrable Securities, such prospectus shall
conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations
of the Commission thereunder and shall not contain an 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 not misleading in light of the
circumstances then existing.  Each
Electing Holder agrees that upon receipt of any notice from the Company
pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder shall
forthwith discontinue the disposition of Registrable Securities pursuant to the
Shelf Registration Statement applicable to such Registrable Securities until
such Electing Holder shall have received copies of such amended or supplemented
prospectus, and if so directed by the Company, such Electing Holder shall deliver
to the Company (at the Company’s expense) all copies, other than permanent file
copies, then in such Electing Holder’s possession of the prospectus covering
such Registrable Securities at the time of receipt of such notice.

 

(f)                                    In the event of a
Shelf Registration, in addition to the information required to be provided by
each Electing Holder in its Notice Questionnaire, the Company may require such
Electing Holder to furnish to the Company such additional information regarding
such Electing Holder and such Electing Holder’s intended method of distribution
of Registrable Securities as may be required in order to comply with the
Securities Act. Each such Electing Holder agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Electing Holder to the Company or of the occurrence of any
event in either case as a result of which any prospectus relating to such Shelf
Registration contains or would contain an untrue statement of a material fact
regarding such Electing Holder or such Electing Holder’s intended method of
disposition of such Registrable Securities or omits to state any material fact
regarding such Electing Holder or such Electing Holder’s intended method of
disposition of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish to the Company any
additional information required to correct and update any previously furnished
information or required so that such prospectus shall not contain, with respect
to such Electing Holder or the disposition of such Registrable Securities, an
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 not misleading in
light of the circumstances then existing.

 

(g)                                 Until the expiration
of two years after the Closing Date or such earlier time as no Registrable
Securities are outstanding, the Company will not, and will not permit any of
its “affiliates” (as defined in Rule 144) to, resell any of the Securities
which constitute “restricted securities” under Rule 144 that have been
reacquired by any of them except pursuant to an effective registration
statement under the Securities Act.

 

15

 

(h)                                 Notwithstanding any
provision of this Exchange and Registration Rights Agreement to the contrary,
in the event of a potential acquisition or business combination or other
transaction, business development or event involving the Company that may
require disclosure in an Exchange Registration Statement or a Shelf
Registration Statement, if the Company shall determine in the exercise of its
reasonable judgment that disclosure of such potential acquisition or business
combination or other transaction, business development or event is not in the
best interests of the Company or that obtaining any financial statements
relating to an acquisition or business combination required to be included in
such registration statement would be impracticable, the Company shall have the
right to suspend the effectiveness of such registration statement for no more
than two periods, each of up to 60 consecutive days (each, a “Suspension Period”),
during any 365-day period, provided that no such registration statement may be
suspended for more than an aggregate of 75 days in any 12-month period. In any
such event, the Company shall promptly notify each broker-dealer eligible to
use the prospectus in the Exchange Offer Registration Statement in connection
with resales of Exchange Securities held by it and, if applicable, each
Electing Holder eligible to resell Securities under a Shelf Registration
Statement, of the suspension of the effectiveness of such registration
statement, provided that the Company shall not be required to disclose in such
notice the possible acquisition or business combination or other transaction,
business development or event if it determines in good faith that such
disclosure would not be in the best interests of the Company.  Any Suspension Period shall terminate upon
the later of (i) the abandonment, consummation or termination of such
acquisition or business combination or other transaction, business development
or event or the availability of the required financial statements with respect
to a possible acquisition or business combination and (ii) any required
amendment or supplement to such registration statement, and the Company shall
promptly notify broker-dealers eligible to use the prospectus in the Exchange
Offer Registration Statement in connection with resales of Exchange Securities
held by them and, if applicable, Electing Holders eligible to resell Securities
under a Shelf Registration Statement, that the use of the prospectus contained
in such registration statement, as amended or supplemented, may resume. The
Company shall provide sufficient copies of the most recent version of such
prospectus to broker-dealers holding Exchange Securities eligible to use the
prospectus in the Exchange Offer Registration Statement in connection with
resales of Exchange Securities held by them and, if applicable, Electing
Holders eligible to resell Securities under a Shelf Registration Statement,
promptly upon written request, and in no event later than three business days
after such request.

 

4.                                      Registration
Expenses.  The Company agrees to bear
and to pay or cause to be paid promptly all expenses incident to the Company’s
performance of or compliance with this Exchange and Registration Rights
Agreement, including (a) all Commission and any NASD registration, filing
and review fees and expenses including reasonable fees and disbursements of not
more than one counsel for the placement or sales agent or underwriters in connection
with such registration, filing and review, (b) all fees and expenses in
connection with the qualification of the Securities for offering and sale under
the State securities and blue sky laws referred to in Section 3(d)(xii)
hereof and determination of their eligibility for investment under the laws of
such jurisdictions as any managing underwriters or the Electing Holders may
designate, including any reasonable fees and disbursements of not more than one
counsel for the Electing Holders or underwriters in connection with such
qualification and determination, (c) all expenses relating to the
preparation, printing, production, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the expenses of preparing the Securities for
delivery and the expenses of printing or producing any

 

16

 

underwriting agreements, agreements among underwriters, selling
agreements and blue sky or legal investment memoranda and all other documents
in connection with the offering, sale or delivery of Securities to be disposed
of (including certificates representing the Securities), (d) messenger,
telephone and delivery expenses relating to the offering, sale or delivery of
Securities and the preparation of documents referred in clause (c) above, (e) fees
and expenses of the Trustee under the Indenture, any agent of the Trustee and
any counsel for the Trustee and of any collateral agent or custodian, (f) internal
expenses of the Company (including all salaries and expenses of the Company’s
officers and employees performing legal or accounting duties), (g) fees, disbursements
and expenses of counsel, reservoir engineers and independent certified public
accountants of the Company (including the expenses of any opinions or “cold
comfort” letters required by or incident to such performance and compliance), (h) reasonable
fees, disbursements and expenses of any “qualified independent underwriter”
engaged pursuant to Section 3(d)(xix) hereof and of one counsel for the
Electing Holders retained in connection with a Shelf Registration, as selected
by the Electing Holders of at least a majority in aggregate principal amount of
the Registrable Securities held by Electing Holders (which counsel shall be
reasonably satisfactory to the Company), (i) any fees charged by
securities rating services for rating the Securities, and (j) fees, expenses
and disbursements of any other persons, including special experts, retained by
the Company in connection with such registration (collectively, the “Registration
Expenses”). To the extent that any Registration Expenses are reasonably incurred,
assumed or paid by any holder of Registrable Securities or any placement or
sales agent therefor or underwriter thereof, the Company shall reimburse such
person for the full amount of the Registration Expenses so incurred, assumed or
paid promptly after receipt of a request therefor. Notwithstanding the
foregoing, the holders of the Registrable Securities being registered shall pay
all agency fees and commissions and underwriting discounts and commissions
attributable to the sale of such Registrable Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
holders (severally or jointly), other than the counsel and experts specifically
referred to above.

 

5.                                      Representations
and Warranties.  The Company represents
and warrants to, and agrees with, each Purchaser and each of the holders from
time to time of Registrable Securities that:

 

(a)                                  Each registration
statement covering Registrable Securities and each prospectus (including any
preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(d) or
Section 3(c) hereof and any further amendments or supplements to any
such registration statement or prospectus, when it becomes effective or is
filed with the Commission, as the case may be, and, in the case of an
underwritten offering of Registrable Securities, at the time of the closing
under the underwriting agreement relating thereto, will conform in all material
respects to the requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and will not
contain an 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 not
misleading; and at all times subsequent to the Effective Time when a prospectus
would be required to be delivered under the Securities Act, other than from (i) such
time as a notice has been given to holders of Registrable Securities pursuant
to Section 3(d)(viii)(F) or Section 3(c)(iii)(F) hereof
until (ii) such time as the Company furnishes an amended or supplemented
prospectus pursuant to Section 3(e) or Section 3(c)(iv) hereof,
each such registration statement, and each prospectus (including any summary
prospectus) contained therein or furnished pursuant to Section 3(d) or
Section 3(c) hereof, as then amended or supplemented, will conform in
all material respects to the requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission

 

17

 

thereunder and will not contain an 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 not misleading in the light of the circumstances
then existing; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by a holder of Registrable
Securities expressly for use therein.

 

(b)                                 Any documents
incorporated by reference in any prospectus referred to in Section 5(a) hereof,
when they become or became effective or are or were filed with the Commission,
as the case may be, will conform or conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and none
of such documents will contain or contained an untrue statement of a material
fact or will omit or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a holder of Registrable Securities
expressly for use therein.

 

(c)                                  The compliance by the
Company with all of the provisions of this Exchange and Registration Rights
Agreement and the consummation of the transactions herein contemplated will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any subsidiary
of the Company is a party or by which the Company or any subsidiary of the
Company is bound or to which any of the property or assets of the Company or
any subsidiary of the Company is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or the bylaws
of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any subsidiary of the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Exchange and Registration
Rights Agreement, except the registration under the Securities Act of the
Securities, qualification of the Indenture under the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications as
may be required under State securities or blue sky laws in connection with the
offering and distribution of the Securities.

 

(d)                                 This Exchange and
Registration Rights Agreement has been duly authorized, executed and delivered
by the Company.

 

6.                                      Indemnification.

 

(a)                                  Indemnification by the Company. The
Company will indemnify and hold harmless each of the holders of Registrable
Securities included in an Exchange Registration Statement, each of the Electing
Holders of Registrable Securities included in a Shelf Registration Statement
and each person who participates as a placement or sales agent or as an
underwriter in any offering or sale of such Registrable Securities against any
losses, claims, damages or liabilities, joint or several, to which such holder,
agent or underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Exchange Registration Statement

 

18

 

or Shelf Registration Statement, as the case may be, under which such
Registrable Securities were registered under the Securities Act, or any
preliminary, final or summary prospectus contained therein or furnished by the
Company to any such holder, Electing Holder, agent or underwriter, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse such holder, such Electing Holder, such agent and such underwriter
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable to any such
person in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
or preliminary, final or summary prospectus, or amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by such person expressly for use therein; provided, further,
that the Company shall not be liable for any losses, claims, damages or
liabilities arising out of any offer or sale during any Suspension Period with
respect to which the Company provided notice in accordance with Section 3(h).

 

(b)                                 Indemnification by the Holders and any Agents and
Underwriters. The Company may require, as a condition to including
any Registrable Securities in any registration statement filed pursuant to Section 2(b) hereof
and to entering into any underwriting agreement with respect thereto, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Electing Holder of such Registrable Securities and from each underwriter
named in any such underwriting agreement, severally and not jointly, to (i) indemnify
and hold harmless the Company and all other holders of Registrable Securities,
against any losses, claims, damages or liabilities to which the Company or such
other holders of Registrable Securities may become subject, jointly or
severally under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in such registration statement, or any preliminary, final or
summary prospectus contained therein or furnished by the Company to any such
Electing Holder, agent or underwriter, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Electing Holder or underwriter
expressly for use therein, and (ii) reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that no such Electing Holder shall be required to
undertake liability to any person under this Section 6(b) for any
amounts in excess of the dollar amount of the proceeds to be received by such
Electing Holder from the sale of such Electing Holder’s Registrable Securities
pursuant to such registration.

 

(c)                                  Notices of Claims, Etc. Promptly after
receipt by an indemnified party under subsection (a) or (b) above
of written notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party pursuant to the indemnification provisions of or contemplated by this Section 6,
notify such indemnifying party in writing of the commencement of such action;
but the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified

 

19

 

party otherwise than under the indemnification provisions of or
contemplated by Section 6(a) or 6(b) hereof. In case any such
action shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, such indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation. 
No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

 

(d)                                 Contribution. If for any reason the
indemnification provisions contemplated by Section 6(a) or Section 6(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were determined by pro
rata allocation (even if the holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 6(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 6(d), no holder shall be required to
contribute any amount in excess of the amount by which the dollar amount of the
proceeds received by such holder from the sale of any Registrable Securities
(after deducting any fees, discounts and commissions applicable thereto)
exceeds the amount of any damages which such holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission, and no underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of

 

20

 

fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The holders’ and any
underwriters’ obligations in this Section 6(d) to contribute shall be
several in proportion to the principal amount of Registrable Securities
registered or underwritten, as the case may be, by them and not joint.

 

(e)                                  The obligations of
the Company under this Section 6 shall be in addition to any liability
which the Company may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and partner of each holder, agent and
underwriter and each person, if any, who controls any holder, agent or
underwriter within the meaning of the Securities Act; and the obligations of
the holders and any agents or underwriters contemplated by this Section 6
shall be in addition to any liability which the respective holder, agent or
underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his consent, is named in any registration statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the Securities Act.

 

7.                                      Underwritten
Offerings.

 

(a)                                  Selection of Underwriters. If any of the
Registrable Securities covered by the Shelf Registration are to be sold
pursuant to an underwritten offering, the managing underwriter or underwriters
thereof shall be designated by Electing Holders holding at least a majority in
aggregate principal amount of the Registrable Securities to be included in such
offering, provided that such designated managing underwriter or underwriters is
or are reasonably acceptable to the Company.

 

(b)                                 Participation by Holders. Each holder of
Registrable Securities hereby agrees with each other such holder that no such
holder may participate in any underwritten offering hereunder unless such
holder (i) agrees to sell such holder’s Registrable Securities on the
basis provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

 

8.                                      Rule 144.
The Company covenants to take such action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell Registrable Securities without registration under
the Securities Act within the limitations of the exemption provided by Rule 144
under the Securities Act, as such Rule may be amended from time to time,
or any similar or successor rule or regulation hereafter adopted by the
Commission. Upon the request of any holder of Registrable Securities in
connection with that holder’s sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.

 

9.                                      Miscellaneous.

 

(a)                                  No Inconsistent Agreements.  The Company represents, warrants, covenants
and agrees that it has not granted, and shall not grant, registration rights
with respect to Registrable Securities or any other securities which would be
inconsistent with the terms contained in this Exchange and Registration Rights
Agreement.

 

21

 

(b)                                 Specific Performance.  The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the holders from time to time
of the Registrable Securities may be irreparably harmed by any such failure,
and accordingly agree that the Purchasers and such holders, in addition to any
other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of the Company under
this Exchange and Registration Rights Agreement in accordance with the terms
and conditions of this Exchange and Registration Rights Agreement, in any court
of the United States or any State thereof having jurisdiction.

 

(c)                                  Notices. 
All notices, requests, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by hand, if delivered personally or by courier, or three days after
being deposited in the mail (registered or certified mail, postage prepaid,
return receipt requested) as follows:

 

(1)                                  if
to a holder, to the address of such holder set forth in the security register
or other records of the Company, or to such other address as the Company or any
such holder may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

 

(2)                                  if
to the Company:

 

Pogo Producing
Company

5 Greenway
Plaza, Suite 2700

Houston, Texas
77046

Attention:
General Counsel

 

with a copy
to:

 

Baker Botts
L.L.P.

One Shell
Plaza

Houston,
Texas  77002

Attention:
Stephen Massad

 

(3)                                  if
to the Purchasers:

 

Goldman, Sachs &
Co.

85 Broad
Street

New York, New
York 10004

Attention: Ray
Strong

 

with a copy
to:

 

Vinson &
Elkins L.L.P.

First City
Tower

1001 Fannin, Suite 2300

Houston,
Texas  77002

Attention: T.
Mark Kelly

 

22

 

(d)                                 Parties in Interest.  All the terms and provisions of this Exchange
and Registration Rights Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the parties hereto and the holders from
time to time of the Registrable Securities and the respective successors and
assigns of the parties hereto and such holders. In the event that any
transferee of any holder of Registrable Securities shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, without any further writing or action of
any kind, be deemed a beneficiary hereof for all purposes and such Registrable
Securities shall be held subject to all of the terms of this Exchange and
Registration Rights Agreement, and by taking and holding such Registrable
Securities such transferee shall be entitled to receive the benefits of, and be
conclusively deemed to have agreed to be bound by all of the applicable terms
and provisions of this Exchange and Registration Rights Agreement. If the
Company shall so request, any such successor, assign or transferee shall agree
in writing to acquire and hold the Registrable Securities subject to all of the
applicable terms hereof.

 

(e)                                  Survival. 
The respective indemnities, agreements, representations, warranties and
each other provision set forth in this Exchange and Registration Rights
Agreement or made pursuant hereto shall remain in full force and effect regardless
of any investigation (or statement as to the results thereof) made by or on
behalf of any holder of Registrable Securities, any director, officer or
partner of such holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling person of any of the foregoing, and shall
survive delivery of and payment for the Registrable Securities pursuant to the
Purchase Agreement and the transfer and registration of Registrable Securities
by such holder and the consummation of an Exchange Offer.

 

(f)                                    Governing Law.  This
Exchange and Registration Rights Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

 

(g)                                 Headings. 
The descriptive headings of the several Sections and paragraphs of this
Exchange and Registration Rights Agreement are inserted for convenience only,
do not constitute a part of this Exchange and Registration Rights Agreement and
shall not affect in any way the meaning or interpretation of this Exchange and
Registration Rights Agreement.

 

(h)                                 Entire Agreement; Amendments.  This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the Indenture
and the form of Securities) or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Exchange and Registration Rights Agreement supersedes all
prior agreements and understandings between the parties with respect to their
subject matter. This Exchange and Registration Rights Agreement may be amended
and the observance of any term of this Exchange and Registration Rights
Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) only by a written instrument duly
executed by the Company and the holders of at least a majority in aggregate
principal amount of the Registrable Securities at the time outstanding. Each
holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any amendment or waiver effected pursuant to this Section 9(h),
whether or not any notice, writing or marking indicating such amendment or
waiver appears on such Registrable Securities or is delivered to such holder.

 

(i)                                     Inspection.  For so long as this Exchange and Registration
Rights Agreement shall be in effect, this Exchange and Registration Rights
Agreement and a complete list of the

 

23

 

names and addresses of all the holders of Registrable Securities shall be
made available for inspection and copying on any business day by any holder of
Registrable Securities for proper purposes only (which shall include any
purpose related to the rights of the holders of Registrable Securities under
the Securities, the Indenture and this Agreement) at the offices of the Company
at the address thereof set forth in Section 9(c) above and at the
office of the Trustee under the Indenture.

 

(j)                                     Counterparts.  This agreement may be executed by the parties
in counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.

 

24

 

If the foregoing is in accordance with your
understanding, please sign and return to us five counterparts hereof, and upon
the acceptance hereof by you, on behalf of each of the Purchasers, this letter
and such acceptance hereof shall constitute a binding agreement between each of
the Purchasers and the Company.  It is
understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  Pogo Producing Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P.
  Ulm, II

  	
   

  
	
   

  	
   

  	
  James P. Ulm, II

  
	
   

  	
   

  	
  Senior Vice President and Chief

  
	
   

  	
   

  	
  Financial Officer

  

 

Accepted as of the date hereof:

Goldman, Sachs & Co.

  As representative of the several Purchasers

 

 

	
  By:

  	
  /s/ Goldman,
  Sachs & Co.

  	
   

  
	
   

  	
  (Goldman, Sachs & Co.)

  

 

25

 

Exhibit A

 

Pogo Producing Company

 

INSTRUCTION TO
DTC PARTICIPANTS

 

[                 ],
2005

 

URGENT
- IMMEDIATE ATTENTION REQUESTED

 

DEADLINE FOR RESPONSE:  [DATE]*

 

The Depository Trust Company (“DTC”) has identified you as a DTC
Participant through which beneficial interests in Pogo Producing Company (the “Company”)
$300,000,000 principal amount of  6.625%
Senior Subordinated Notes due 2015 (the “Securities”) are held.

 

The Company is in the process of registering the Securities under the
Securities Act of 1933 for resale by the beneficial owners thereof.  In order to have their Securities included in
the registration statement, beneficial owners must complete and return the
enclosed Notice of Registration Statement and Selling Securityholder
Questionnaire.

 

It is important that beneficial owners of the
Securities receive a copy of the enclosed materials as soon as possible
as their rights to have the Securities included in the registration statement
depend upon their returning the Notice and Questionnaire by [Deadline For Response].  Please forward a copy of the enclosed
documents to each beneficial owner that holds interests in the Securities
through you.  If you require more copies
of the enclosed materials or have any questions pertaining to this matter,
please contact Investor Relations, Pogo Producing Company, 5 Greenway Plaza, Suite 2700,
Houston, Texas  77046 (telephone:
713.297.5000).

 

 

*  Not less than 28 calendar days
from date of mailing.

 

A-1

 

Pogo
Producing Company

 

Notice of Registration
Statement

and

Selling
Securityholder Questionnaire

 

[                 ],
2005

 

Reference is hereby made to the Exchange and Registration Rights
Agreement (the “Exchange and Registration Rights Agreement”) between Pogo
Producing Company (the “Company”) and each of the Purchasers named therein.  Pursuant to the Exchange and Registration
Rights Agreement, the Company has filed with the United States Securities and
Exchange Commission (the “Commission”) a registration statement on Form S-3
(the “Shelf Registration Statement”) for the registration and resale under Rule 415
of the Securities Act of 1933, as amended (the “Securities Act”), of
$300,000,000 principal amount of the Company’s 6.625% Senior Subordinated Notes
due 2015 (the “Securities”).  A copy of
the Exchange and Registration Rights Agreement is attached hereto.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Exchange and
Registration Rights Agreement.

 

Each beneficial owner of Registrable Securities (as defined below) is
entitled to have the Registrable Securities beneficially owned by it included
in the Shelf Registration Statement.  In
order to have Registrable Securities included in the Shelf Registration
Statement, this Notice of Registration Statement and Selling Securityholder
Questionnaire (“Notice and Questionnaire”) must be completed, executed and
delivered to the Company’s counsel at the address set forth herein for receipt
ON OR BEFORE [Deadline for Response].  Beneficial owners of Registrable Securities
who do not complete, execute and return this Notice and Questionnaire by such
date (i) will not be named as selling securityholders in the Shelf
Registration Statement and (ii) may not use the Prospectus forming a part
thereof for resales of Registrable Securities.

 

Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.  Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel
regarding the consequences of being named or not being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.

 

The term “Registrable Securities” is defined in the Exchange and
Registration Rights Agreement.

 

A-2

 

ELECTION

 

The undersigned holder (the “Selling Securityholder”) of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item
(3).  The undersigned, by signing and
returning this Notice and Questionnaire, agrees to be bound with respect to
such Registrable Securities by the terms and conditions of this Notice and
Questionnaire and the Exchange and Registration Rights Agreement, including,
without limitation, Section 6 of the Exchange and Registration Rights
Agreement, as if the undersigned Selling Securityholder were an original party
thereto.

 

Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the
Company and Trustee the Notice of Transfer set forth in Appendix A to the
Prospectus and as Exhibit B to the Exchange and Registration Rights
Agreement.

 

The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:

 

A-3

 

QUESTIONNAIRE

 

	
  (1)

  	
  (a)

  	
  Full Legal Name of Selling Securityholder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Full Legal Name of Registered Holder (if not the same as in (a) above)
  of Registrable Securities Listed in Item (3) below:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Full Legal Name of DTC Participant (if applicable and if not the same
  as (b) above) Through Which Registrable Securities Listed in Item
  (3) below are Held:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (2)

  	
  Address for Notices to Selling Securityholder:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
  Contact Person:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
  Beneficial Ownership of Securities:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Except as set forth below in this Item (3), the
  undersigned does not beneficially own any Securities. 

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Principal amount of Registrable Securities beneficially owned:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP No(s). of such Registrable Securities:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Principal amount of Securities other than Registrable Securities
  beneficially owned:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP No(s). of such other Securities:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Principal amount of Registrable Securities which the undersigned
  wishes to be included in the Shelf Registration 

  
	
   

  	
   

  	
  Statement:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP No(s). of such Registrable Securities to be included in the
  Shelf Registration Statement:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (4)

  	
  Beneficial Ownership of Other Securities of the Company:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below in this Item (4), the
  undersigned Selling Securityholder is not the beneficial or registered owner
  of any other securities of the Company, other than the Securities listed
  above in Item (3).

  
															

 

A-4

 

	
   

  	
   

  	
  State any exceptions here:

  
	
   

  	
   

  	
   

  
	
   

  	
  (5)

  	
  Relationships with the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below, neither the
  Selling Securityholder nor any of its affiliates, officers, directors or
  principal equity holders (5% or more) has held any position or office or has
  had any other material relationship with the Company (or its predecessors or
  affiliates) during the past three years.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State any exceptions here:

  
	
   

  	
   

  	
   

  
	
   

  	
  (6)

  	
  Plan of Distribution:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below, the undersigned
  Selling Securityholder intends to distribute the Registrable Securities
  listed above in Item (3) only as follows (if at all):  Such Registrable Securities may be sold
  from time to time directly by the undersigned Selling Securityholder or,
  alternatively, through underwriters, broker-dealers or agents.  Such Registrable Securities may be sold in
  one or more transactions at fixed prices, at prevailing market prices at the
  time of sale, at varying prices determined at the time of sale, or at
  negotiated prices.  Such sales may be
  effected in transactions (which may involve crosses or block transactions) (i) on
  any national securities exchange or quotation service on which the Registered
  Securities may be listed or quoted at the time of sale, (ii) in the
  over-the-counter market, (iii) in transactions otherwise than on such
  exchanges or services or in the over-the-counter market, or (iv) through
  the writing of options.  In connection
  with sales of the Registrable Securities or otherwise, the Selling
  Securityholder may enter into hedging transactions with broker-dealers, which
  may in turn engage in short sales of the Registrable Securities in the course
  of hedging the positions they assume. 
  The Selling Securityholder may also sell Registrable Securities short
  and deliver Registrable Securities to close out such short positions, or loan
  or pledge Registrable Securities to broker-dealers that in turn may sell such
  securities.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State any exceptions here:

  

 

By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M.

 

In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the
date on which such information is provided to the Company, the Selling
Securityholder agrees to notify the transferee(s) at the time of the transfer
of its rights and obligations under this Notice and Questionnaire and the
Exchange and Registration Rights Agreement.

 

By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through (6) above
and the inclusion of such

 

A-5

 

information in the Shelf Registration Statement and related
Prospectus.  The Selling Securityholder
understands that such information will be relied upon by the Company in
connection with the preparation of the Shelf Registration Statement and related
Prospectus.

 

In accordance with the Selling Securityholder’s obligation under Section 3(d) of
the Exchange and Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration
Statement remains in effect.  All notices
hereunder and pursuant to the Exchange and Registration Rights Agreement shall
be made in writing, by hand-delivery, first-class mail, or air courier
guaranteeing overnight delivery as follows:

 

(i)                                     To the Company:

 

Pogo Producing
Company

5 Greenway
Plaza, Suite 2700

Houston, Texas
77046

Attention: General
Counsel

 

(ii)                                  with a copy to:

 

Baker Botts
L.L.P.

One Shell
Plaza

Houston,
Texas  77002

Attention:
Stephen Massad

 

Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company’s counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above).  This Agreement shall be
governed in all respects by the laws of the State of New York.

 

A-6

 

IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.

 

	
  Dated:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Selling Securityholder

  
	
  (Print/type full legal name of beneficial
  owner
 of Registrable Securities)

  
				

 

 

	
  By:

  	
   

  	
   

  
	
    Name:

  	
   

  	
   

  
	
    Title:

  	
   

  	
   

  
					

 

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR
RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE]
TO THE COMPANY’S COUNSEL AT:

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-7

 

Exhibit B

 

NOTICE OF TRANSFER PURSUANT TO
REGISTRATION STATEMENT

 

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

Pogo Producing Company

c/o The Bank of New York Trust Company, N.A.

600 Pearl Street, Suite 420

Dallas, Texas  75201

 

Attention:  Trust Officer

 

Re:                               Pogo Producing Company
(the “Company”) $300,000,000 Principal Amount of  6.625% Senior Subordinated Notes due 2015

 

Dear Sirs:

 

Please be advised that                    has
transferred $aggregate principal amount of the above-referenced Notes pursuant
to an effective Registration Statement on Form [     ]
(File No. 333-             )
filed by the Company.

 

We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied and that the
above-named beneficial owner of the Notes is named as a “Selling Holder” in the
Prospectus dated [date] or in
supplements thereto, and that the aggregate principal amount of the Notes
transferred are the Notes listed in such Prospectus opposite such owner’s name.

 

Dated:

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  (Authorized
  Signature)

  
					

 

B-1

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