Document:

Exhibit 10.2

 

AMERICAN BANK NOTE HOLOGRAPHICS, INC

2005 STOCK INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

 

AGREEMENT, made as of the    
day of          , 20  ,
by and between American Bank Note Holographics, Inc., a Delaware
corporation (the “Company”), and                
(the “Participant”).

 

W  I  T
N  E  S  S  E  T  H:

 

WHEREAS, pursuant to
the American Bank Note Holographics, Inc. 2005 Stock Incentive Plan (the “Plan”),
the Company desires to grant the Participant, and the Participant desires to
accept, an award of Restricted Stock on the terms and conditions set forth in
this Agreement and the Plan.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.           Grant.  In consideration of future services to the
Company, the Company hereby grants to the Participant       
shares of the Company’s common stock, $0.01 par value per share (the “Common
Stock”), subject to the restrictions and risk of forfeiture contained herein
and upon the other terms and conditions set forth in this Agreement and the
Plan.  During the period which the shares
of Common Stock are subject to the restrictions and risk of forfeiture
contained herein, such shares shall be referred to as “Restricted Stock.”

 

2.         Restrictions;
Risk of Forfeiture.  The Restricted
Stock may not be sold, assigned, transferred, disposed of, pledged or otherwise
hypothecated by the Participant.  Any
attempted sale, assignment, transfer, disposition, pledge or hypothecation of
shares of Restricted Stock shall be void and of no effect and the Company shall
have the right to disregard the same on its books and records and issue “stop
transfer” instructions to its transfer agent. 
The Restricted Stock may be forfeited to the Company pursuant to Section 4,
at which time the Company shall have the right to instruct the Company’s
transfer agent to transfer the Restricted Stock to the Company.  Notwithstanding anything herein to the
contrary, the Committee may, in its sole discretion, accelerate or waive the
restrictions and risk of forfeiture to which the shares of Restricted Stock are
subject, in whole or in part, based on such factors as the Committee may
determine in its sole discretion.

 

3.         Expiration
of Transfer Restrictions and Risk of Forfeiture.  Except as provided herein or the Plan, the
restrictions and risk of forfeiture to which the shares of Restricted Stock are
subject shall expire, and the shares of Restricted Stock shall vest, with
respect to the percentage of shares of Restricted Stock set forth below on the
vesting dates set forth below, provided that the Participant remains
continuously employed by the Company through each applicable vesting date.

 

 

	
  Percentage of Shares Vesting

  	
   

  	
  Vesting Dates

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

4.         Termination of Employment.  Unless otherwise provided in an employment
agreement between the Participant and the Company, if the Participant’s
employment with the Company is terminated for any reason (or no reason), all
shares of Restricted Stock shall be immediately forfeited to the Company.

 

5.         Rights
as a Stockholder.  All voting rights
with respect to the Restricted Stock shall be exercisable by the Participant
notwithstanding the restrictions imposed on the Restricted Stock herein.  Any cash dividends paid on the Restricted
Stock shall be remitted to the Participant, subject to applicable
withholding.  Shares of Common Stock
distributed in connection with a stock split or stock dividend, and other
property distributed as a dividend, with respect to the Restricted Stock shall
be subject to the restrictions and risk of forfeiture to the same extent as the
Restricted Stock.

 

6.           Stock
Certificates.  Unless the Committee
elects otherwise, the shares of Restricted Stock shall be evidenced by book
entries on the Company’s stock transfer records pending the lapse of the
restrictions thereon.  The Participant
shall execute and deliver to the Company a duly signed stock power, endorsed in
blank, relating to the shares of Restricted Stock.

 

7.           No
Employment Rights.  Nothing contained
in the Plan or this Agreement shall confer upon the Participant any right with
respect to the continuation of his employment with the Company or interfere in
any way with the right of the Company at any time to terminate such employment
or to increase or decrease, or otherwise adjust, the other terms and conditions
of the Participant’s employment.

 

8.           Provisions
of the Plan Control.  The provisions
of the Plan, the terms of which are incorporated in this Agreement, shall
govern if and to the extent that there are inconsistencies between those
provisions and the provisions hereof. 
The Participant acknowledges receipt of a copy of the Plan prior to the
execution of this Agreement.

 

9.           Tax
Withholding.  The Participant
acknowledges that the Participant (and not the Company) shall be responsible
for any tax liability that may arise as a result of this award of Restricted
Stock.  As a condition to the lapse of
restrictions on the Restricted Stock, or in connection with any other event
that gives rise to a federal or other governmental tax withholding obligation
on the part of the Company relating to the Restricted Stock, the Company may a.
deduct or withhold (or cause to be deducted or withheld) from any payment or
distribution to the Participant whether or not pursuant to the Plan; or b.
require the Participant to remit cash (through payroll deduction or otherwise),
in each case, in an amount sufficient in the opinion of the Company to satisfy
such withholding obligation.  At the sole
discretion of the Committee, the Participant may satisfy the withholding obligation
described under this Section 9 by tendering previously-owned shares of
Common Stock having a Fair Market Value equal to the amount of tax to be
withheld.

 

 

10.         Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to its principles of conflict of laws.

 

11.         Miscellaneous.  This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and may not be
modified other than by written instrument executed by the parties.

 

IN
WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.

 

	
   

  	
    AMERICAN
  BANK NOTE HOLOGRAPHICS, INC.

  
	
   

  	
   

  
	
   

  	
   By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:Exhibit 4.1

 

 

 

PACIFIC ENERGY PARTNERS, L.P.,

 

PACIFIC ENERGY FINANCE CORPORATION

 

AND

 

THE GUARANTORS NAMED ON THE SIGNATURE
PAGE HEREOF

 

 

6 1⁄4% SENIOR NOTES DUE 2015

 

 

 

INDENTURE

 

Dated as of September 23, 2005

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

As Trustee

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
  Section
  1.01.

  	
  Definitions

  	
   

  
	
  Section 1.02.

  	
  Other Definitions

  	
   

  
	
  Section 1.03.

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
   

  
	
  Section 1.04.

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 THE NOTES

  	
   

  
	
  Section 2.01.

  	
  Form and Dating

  	
   

  
	
  Section 2.02.

  	
  Execution and Authentication

  	
   

  
	
  Section 2.03.

  	
  Registrar and Paying Agent

  	
   

  
	
  Section 2.04.

  	
  Paying Agent to Hold Money in Trust

  	
   

  
	
  Section 2.05.

  	
  Noteholder Lists

  	
   

  
	
  Section 2.06.

  	
  Transfer and Exchange

  	
   

  
	
  Section 2.07.

  	
  Replacement Notes

  	
   

  
	
  Section 2.08.

  	
  Outstanding Notes

  	
   

  
	
  Section 2.09.

  	
  Temporary Notes

  	
   

  
	
  Section 2.10.

  	
  Cancellation

  	
   

  
	
  Section 2.11.

  	
  Defaulted Interest

  	
   

  
	
  Section 2.12.

  	
  CUSIP Numbers

  	
   

  
	
  Section 2.13.

  	
  Issuance of Additional Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 REDEMPTION AND PREPAYMENT

  	
   

  
	
  Section 3.01.

  	
  Notices to Trustee

  	
   

  
	
  Section 3.02.

  	
  Selection of Notes to Be Redeemed

  	
   

  
	
  Section 3.03.

  	
  Notice of Redemption

  	
   

  
	
  Section 3.04.

  	
  Effect of Notice of Redemption

  	
   

  
	
  Section 3.05.

  	
  Deposit of Redemption Price

  	
   

  
	
  Section 3.06.

  	
  Notes Redeemed in Part

  	
   

  
	
  Section 3.07.

  	
  Optional Redemption

  	
   

  
	
  Section 3.08.

  	
  Special Mandatory Redemption

  	
   

  
	
  Section 3.09.

  	
  Mandatory Redemption

  	
   

  
	
  Section 3.10.

  	
  Offer to Purchase by Application of Excess
  Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 COVENANTS

  	
   

  
	
  Section 4.01.

  	
  Payment of Notes

  	
   

  
	
  Section 4.02.

  	
  Maintenance of Office or Agency

  	
   

  
	
  Section 4.03.

  	
  Reports

  	
   

  
	
  Section 4.04.

  	
  Compliance Certificate

  	
   

  
	
  Section 4.05.

  	
  Taxes

  	
   

  
	
  Section 4.06.

  	
  Stay, Extension and Usury Laws

  	
   

  
	
  Section 4.07.

  	
  Limitation on Restricted Payments

  	
   

  
	
  Section 4.08.

  	
  Limitation on Dividend and Other Payment
  Restrictions Affecting Subsidiaries

  	
   

  
	
  Section 4.09.

  	
  Limitation on Incurrence of Indebtedness
  and Issuance of Disqualified Stock

  	
   

  

 

i

 

	
  Section 4.10.

  	
  Limitation on Asset Sales

  	
   

  
	
  Section 4.11.

  	
  Limitation on Transactions with Affiliates

  	
   

  
	
  Section 4.12.

  	
  Limitation on Liens

  	
   

  
	
  Section 4.13.

  	
  Additional Subsidiary Guarantees

  	
   

  
	
  Section 4.14.

  	
  Corporate Existence

  	
   

  
	
  Section 4.15.

  	
  Offer to Repurchase Upon Change of Control

  	
   

  
	
  Section 4.16.

  	
  Permitted Business Activities

  	
   

  
	
  Section 4.17.

  	
  Sale and Leaseback Transactions

  	
   

  
	
  Section 4.18.

  	
  Covenant Termination

  	
   

  
	
  Section 4.19.

  	
  Designation of Restricted and Unrestricted
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 SUCCESSORS

  	
   

  
	
  Section 5.01.

  	
  Merger, Consolidation, or Sale of Assets

  	
   

  
	
  Section 5.02.

  	
  Successor Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 DEFAULTS AND REMEDIES

  	
   

  
	
  Section 6.01.

  	
  Events of Default

  	
   

  
	
  Section 6.02.

  	
  Acceleration

  	
   

  
	
  Section 6.03.

  	
  Other Remedies

  	
   

  
	
  Section 6.04.

  	
  Waiver of Past Defaults

  	
   

  
	
  Section 6.05.

  	
  Control by Majority

  	
   

  
	
  Section 6.06.

  	
  Limitation on Suits

  	
   

  
	
  Section 6.07.

  	
  Rights of Holders of Notes to Receive
  Payment

  	
   

  
	
  Section 6.08.

  	
  Collection Suit by Trustee

  	
   

  
	
  Section 6.09.

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  Section 6.10.

  	
  Priorities

  	
   

  
	
  Section 6.11.

  	
  Undertaking for Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 TRUSTEE

  	
   

  
	
  Section 7.01.

  	
  Duties of Trustee

  	
   

  
	
  Section 7.02.

  	
  Rights of Trustee

  	
   

  
	
  Section 7.03.

  	
  Individual Rights of Trustee

  	
   

  
	
  Section 7.04.

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 7.05.

  	
  Notice of Defaults

  	
   

  
	
  Section 7.06.

  	
  Reports by Trustee to Holders of the Notes

  	
   

  
	
  Section 7.07.

  	
  Compensation and Indemnity

  	
   

  
	
  Section 7.08.

  	
  Replacement of Trustee

  	
   

  
	
  Section 7.09.

  	
  Successor Trustee by Merger, etc

  	
   

  
	
  Section 7.10.

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 7.11.

  	
  Preferential Collection of Claims Against
  Issuers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 LEGAL DEFEASANCE AND COVENANT
  DEFEASANCE

  	
   

  
	
  Section 8.01.

  	
  Option to Effect Legal Defeasance or
  Covenant Defeasance

  	
   

  
	
  Section 8.02.

  	
  Legal Defeasance and Discharge

  	
   

  
	
  Section 8.03.

  	
  Covenant Defeasance

  	
   

  
	
  Section 8.04.

  	
  Conditions to Legal or Covenant Defeasance

  	
   

  
	
  Section 8.05.

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

  	
   

  
	
  Section 8.06.

  	
  Repayment to Issuers

  	
   

  
	
  Section 8.07.

  	
  Reinstatement

  	
   

  

 

ii

 

	
  Section 8.08.

  	
  Discharge

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  
	
  Section 9.01.

  	
  Without Consent of Holders of Notes

  	
   

  
	
  Section 9.02.

  	
  With Consent of Holders of Notes

  	
   

  
	
  Section 9.03.

  	
  Compliance with Trust Indenture Act

  	
   

  
	
  Section 9.04.

  	
  Revocation and Effect of Consents

  	
   

  
	
  Section 9.05.

  	
  Notation on or Exchange of Notes

  	
   

  
	
  Section 9.06.

  	
  Trustee to Sign Amendments, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 GUARANTEES OF NOTES

  	
   

  
	
  Section 10.01.

  	
  Subsidiary Guarantees

  	
   

  
	
  Section 10.02.

  	
  Guarantors May Consolidate, etc., on
  Certain Terms

  	
   

  
	
  Section 10.03.

  	
  Releases of Subsidiary Guarantees

  	
   

  
	
  Section 10.04.

  	
  Limitation on Guarantor Liability

  	
   

  
	
  Section 10.05.

  	
  “Trustee” to Include Paying Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 MISCELLANEOUS

  	
   

  
	
  Section 11.01.

  	
  Trust Indenture Act Controls

  	
   

  
	
  Section 11.02.

  	
  Notices

  	
   

  
	
  Section 11.03.

  	
  Communication by Holders of Notes with
  Other Holders of Notes

  	
   

  
	
  Section 11.04.

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  Section 11.05.

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  Section 11.06.

  	
  Rules by Trustee and Agents

  	
   

  
	
  Section 11.07.

  	
  No Personal Liability of Directors,
  Officers, Employees and Unitholders

  	
   

  
	
  Section 11.08.

  	
  Governing Law

  	
   

  
	
  Section 11.09.

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  
	
  Section 11.10.

  	
  Successors

  	
   

  
	
  Section 11.11.

  	
  Severability

  	
   

  
	
  Section 11.12.

  	
  Table of Contents, Headings, etc

  	
   

  
	
  Section 11.13.

  	
  Counterparts

  	
   

  

 

iii

 

APPENDIX AND ANNEXES

 

	
  RULE 144A/REGULATION S APPENDIX

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXHIBIT 1

  	
  Form of Initial Note

  	
   

  
	
   

  	
  EXHIBIT A

  	
  Form of Exchange Note or Private Exchange
  Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ANNEX A

  	
  Form of Supplemental Indenture

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ANNEX B

  	
  Form of Registration Rights Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ANNEX C

  	
  Certain Agreements

  	
   

  
					

 

iv

 

CROSS REFERENCE TABLE*

 

	
  Trust Indenture Act 

  Section

  	
   

  	
  Indenture

  Section

  	
   

  
	
  310

  	
  (a)

  	
  (1)

  	
   

  	
  7.10

  	
   

  
	
   

  	
  (a)

  	
  (2)

  	
   

  	
  7.10

  	
   

  
	
   

  	
  (a)

  	
  (3)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (a)

  	
  (4)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (a)

  	
  (5)

  	
   

  	
  7.10

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  7.10

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  N/A

  	
   

  
	
  311

  	
  (a)

  	
   

  	
   

  	
  7.11

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  7.11

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  N/A

  	
   

  
	
  312

  	
  (a)

  	
   

  	
   

  	
  2.05

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  11.03

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  11.03

  	
   

  
	
  313

  	
  (a)

  	
   

  	
   

  	
  7.06

  	
   

  
	
   

  	
  (b)

  	
  (1)

  	
   

  	
  7.06

  	
   

  
	
   

  	
  (b)

  	
  (2)

  	
   

  	
  7.06,
  7.07

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  7.06,
  11.02

  	
   

  
	
   

  	
  (d)

  	
   

  	
   

  	
  7.06

  	
   

  
	
  314

  	
  (a)

  	
   

  	
   

  	
  4.03

  	
   

  
	
   

  	
  (a)

  	
  (4)

  	
   

  	
  11.05

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (c)

  	
  (1)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (c)

  	
  (2)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (c)

  	
  (3)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (d)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (e)

  	
   

  	
   

  	
  11.05

  	
   

  
	
   

  	
  (f)

  	
   

  	
   

  	
  N/A

  	
   

  
	
  315

  	
  (a)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (d)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (e)

  	
   

  	
   

  	
  N/A

  	
   

  
	
  316

  	
  (a)
  (last sentence)

  	
   

  	
  2.08

  	
   

  
	
   

  	
  (a)

  	
  (1)(A)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (a)

  	
  (1)(B)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (a)

  	
  (2)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  N/A

  	
   

  
	
  317

  	
  (a)

  	
  (1)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (a)

  	
  (2)

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  N/A

  	
   

  
	
  318

  	
  (a)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  N/A

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  11.01

  	
   

  

 

N/A means not applicable.

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

 

v

 

This
Indenture, dated as of September 23, 2005, is among Pacific Energy Partners,
L.P., a Delaware limited partnership (the “Company”),
Pacific Energy Finance Corporation, a Delaware corporation (“Finance Corp.” and, together with the Company, the “Issuers”), the guarantors listed on the signature page
hereof (each, a “Guarantor” and, collectively, the
“Guarantors”) and Wells Fargo Bank,
National Association, a national banking association, as trustee (the “Trustee”).

 

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

 

ARTICLE 1

DEFINITIONS AND INCORPORATION 

BY REFERENCE

 

Section 1.01.          Definitions.

 

‘‘364-Day Credit Facility’’ means the $300 million 364-day senior
secured term credit facility to be entered into with Bank of America, N.A. and
Lehman Commercial Paper Inc.

 

“Acquired Debt” means, with respect to any specified Person:

 

(1)           Indebtedness of any other Person
existing at the time such other Person was merged with or into or became a
Subsidiary of such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Subsidiary of, such specified Person, but excluding
Indebtedness which is extinguished, retired or repaid in connection with such
Person merging with or becoming a Subsidiary or such specified Person; and

 

(2)           Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.

 

“Additional Interest” means all Additional Interest then
owing pursuant to Section 6 of the Registration Rights Agreement referred to in
clause (1) of the definition of “Registration Rights Agreement” in the
Appendix.  Unless the context indicates
otherwise, all references to “interest” in this Indenture or the Notes shall be
deemed to include any Additional Interest.

 

“Additional Notes” means, subject to the Company’s compliance
with Section 4.09, 6 1⁄4% Senior Notes due 2015 issued from time to time
after the Initial Issuance Date under the terms of this Indenture (other than
pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than
Exchange Notes or Private Exchange Notes issued pursuant to an exchange offer
for other Notes outstanding under this Indenture).

 

“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. 
For purposes of this definition, “control,” as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or

 

 

otherwise;
provided that beneficial ownership of 10% or more of the Voting Stock of a
Person will be deemed to be control by the other Person; and provided, further,
that any third Person which also beneficially owns 10% or more of the Voting
Stock of a specified Person shall not be deemed to be an Affiliate of either
the specified Person or the other Person merely because of such common
ownership in such specified Person.  For
purposes of this definition, the terms “controlling,” “controlled by” and “under
common control with” have correlative meanings.

 

“Agent” means any Registrar or Paying Agent.

 

“Agent Members” has the meaning provided in the Appendix.

 

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

 

“Asset Sale” means:

 

(1)           the sale, lease, conveyance or other
disposition of any properties or assets (including by way of a Sale and
Leaseback Transaction); provided that the disposition of all or substantially
all of the properties or assets of the Company and its Restricted Subsidiaries
taken as a whole will be governed by the provisions of Section 4.15 and/or
the provisions of Section 5.01 and not by the provisions of
Section 4.10; and

 

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

 

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

 

(1)           any single transaction or series of
related transactions that involves properties or assets having a fair market
value of less than $10.0 million or results in net cash proceeds to the Company
or a Restricted Subsidiary not in excess of $10.0 million;

 

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

 

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

 

(4)           the sale, lease or other disposition
of equipment, inventory, accounts receivable or other properties or assets,
including line fill, in the ordinary course of business;

 

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

 

2

 

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

 

(7)           any trade or exchange by the Company
or any Restricted Subsidiary of properties or assets of any type for properties
or assets of any type owned or held by another Person, including any
disposition of some but not all of the Equity Interests of a Restricted
Subsidiary in exchange for assets or properties and after which the Person
whose Equity Interests have been so disposed of continues to be a Restricted
Subsidiary, provided that the fair market value of the properties or assets
traded or exchanged by the Company or such Restricted Subsidiary (together with
any cash or Cash Equivalent together with liabilities assumed) is reasonably
equivalent to the fair market value of the properties or assets (together with
any cash or Cash Equivalent together with liabilities assumed) to be received
by the Company or such Restricted Subsidiary, and provided further that any cash
received must be applied in accordance with the provisions of
Section 4.10;

 

(8)           the creation or perfection of a Lien
that is not prohibited by Section 4.12;

 

(9)           dispositions in connection with
Permitted Liens;

 

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

 

(11)         the grant in the ordinary course of
business of any non-exclusive license of patents, trademarks, registrations
therefor and other similar intellectual property.

 

“Attributable Debt” in respect of a Sale and Leaseback
Transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such Sale and Leaseback Transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended.  Such present value shall be
calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.  As used in the preceding sentence, the “net
rental payments” under any lease for any 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.

 

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

 

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

 

“Beneficial Owner” has the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating
the beneficial ownership of any particular

 

3

 

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

 

“Board of Directors” means:

 

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

 

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

 

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

 

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

 

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

 

“Capital Lease Obligation” means, at the time any
determination is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a
balance sheet in accordance with GAAP.

 

“Capital Stock” means:

 

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

 

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

 

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

 

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

 

“Cash Equivalents” means:

 

(1)           United States or Canadian dollars or,
in an amount up to the amount necessary or appropriate to fund local operating
expenses, other currencies;

 

4

 

(2)           securities issued or directly and
fully guaranteed or insured by the government of the United States of America
or any other country whose sovereign debt has a rating of at least A3 from
Moody’s and at least A- from S&P or any agency or instrumentality of any
such government (provided that the full faith and credit of such government is
pledged in support thereof), in each case having maturities of not more than
one year from the date of acquisition; securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality of the United States government (provided that the full faith
and credit of the United States is pledged in support of those securities)
having maturities of not more than six months from the date of acquisition;

 

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

 

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

 

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

 

(6)           money market funds at least 95% of
the assets of which constitute Cash Equivalents of the kinds described in
clauses (1) through (5) of this definition.

 

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

 

(1)           the
direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets
(including Capital Stock of the Restricted Subsidiaries) of the Company and its
Restricted Subsidiaries taken as a whole, to any “person” (as that term is used
in Section 13(d)(3) of the Exchange Act), which occurrence is followed by a
Rating Decline within 90 days of the consummation of such transaction;

 

(2)           the
adoption of a plan relating to the liquidation or dissolution of the Company or
the removal of the General Partner by the limited partners of the Company;

 

(3)           the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as that term is used
in Section 13(d)(3) of the Exchange Act), excluding the Qualifying Owners
identified in clause (1) of the definition of Qualifying Owners, becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock
of the General Partner, measured by voting power rather than number of shares,
which occurrence is followed by a Rating Decline within 90 days thereof; or

 

5

 

(4)           the
first day on which a majority of the members of the Board of Directors of the
General Partner are not Continuing Directors, which occurrence is followed by a
Rating Decline within 90 days thereof.

 

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

 

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

 

“Commission” or “SEC” means the
Securities and Exchange Commission.

 

“Consolidated Cash Flow” means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period plus:

 

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

 

(2)           any non-recurring charges relating to
any premium or penalty paid, write-off of deferred financing costs or other
financial recapitalization charges in connection with redeeming or retiring any
Indebtedness prior to its Stated Maturity to the extent such losses were
deducted in computing such Consolidated Net Income; plus

 

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

 

(4)           consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations, imputed
interest with respect to Attributable Debt, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers’ acceptance
financings), and net of the effect of all payments made or received pursuant to
interest rate Hedging Obligations, to the extent that any such expense was
deducted in computing such Consolidated Net Income; plus

 

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

 

6

 

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

 

(7)           all extraordinary, unusual or
non-recurring items of gain or loss, or revenue or expense; minus

 

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

 

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

 

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

 

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

 

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

 

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

 

(4)           unrealized losses and gains under
derivative instruments included in the determination of Consolidated Net
Income, including, without limitation those resulting from the application of
Statement of Financial Accounting Standards No. 133 will be excluded and
non-cash losses resulting from application of Financial Accounting Standards
Nos. 142, 143 and 144.

 

“Consolidated Net Tangible Assets” means, with respect to any
Person at any date of determination, the aggregate amount of total assets
included in such Person’s most recent quarterly or annual consolidated balance
sheet prepared in accordance with GAAP less applicable reserves reflected in
such balance sheet, after deducting the following amounts:  (a) all current liabilities reflected in such
balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt
discounts and expenses and other like intangibles reflected in such balance sheet.

 

“Consolidated Net Worth” means the total of the amounts shown
on the Company’s consolidated balance sheet, determined in accordance with
GAAP, as of the end of the

 

7

 

Company’s
most recent fiscal quarter for which internal financial statements are
available prior to the taking of any action for the purpose of which the
determination is being made, as the sum of:

 

(1)           the
par or stated value of all our outstanding Capital Stock, plus

 

(2)           paid-in
capital or capital surplus relating to such Capital Stock, plus

 

(3)           any
retained earnings or earned surplus less (A) any accumulated deficit, and (B)
any amounts attributable to Disqualified Stock.

 

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

 

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

 

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

 

“Corporate Trust Office of the Trustee” means the principal
office of the Trustee in the City of Los Angeles at which at any time its
corporate trust business shall be administered, which office at the date hereof
is located at 707 Wilshire Blvd., 17th Floor, Los Angeles, CA 90017,
Attention:  Corporate Trust Department or
such other address in the City of Los Angeles as the Trustee may designate from
time to time by notice to the Holders and the Issuers, or the principal
corporate trust office in the City of Los Angeles of any successor Trustee (or
such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Issuers).

 

“Credit Agreement” means (i) that certain Credit Agreement,
dated as of July 19, 2002, among the Company, the Operating Company, as
Borrower, the banks parties thereto and Fleet National Bank, N.A., as
administrative agent, (ii) that certain Credit Agreement, dated as of May 11,
2004, among Rangeland Pipeline Company (as successor to RPC Acquisition
Company), as borrower, Royal Bank of Canada, as agent, and others as lenders
and (iii) the New Credit Facility and the 364-Day Facility, and in each case
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
restated, modified, renewed, refunded, replaced or refinanced from time to
time.

 

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

 

8

 

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

 

“De
Minimis Guaranteed Amount” means
a principal amount of Indebtedness that does not exceed $15.0 million.

 

‘‘Debt
Issuances’’ means,
with respect to the Company or any Guarantor, one or more issuances after the
Issue Date of Indebtedness evidenced by notes, debentures, bonds or other
similar securities or instruments.

 

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

 

“Depository” has the meaning provided in the Appendix.

 

“Disqualified Stock” means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder of the
Capital Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder of the Capital Stock, in whole or in part, on or
prior to the date that is 91 days after the date on which the Notes
mature.  Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely because
the holders of the Capital Stock have the right to require the Company to
repurchase or redeem such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07.

 

“Domestic Subsidiary” means any Restricted Subsidiary of the
Company other than a Foreign Subsidiary.

 

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

 

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

 

“Exchange Notes” means the notes issued in a Registered
Exchange Offer pursuant to this Indenture.

 

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

 

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

 

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

 

9

 

“Fitch” means Fitch, Inc. or any successor to the rating
agency business thereof.

 

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

 

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

 

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

 

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

 

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

 

(4)           interest income reasonably
anticipated by such Person to be received during the applicable four-quarter
period from cash or Cash Equivalents held by such Person or any Restricted
Subsidiary of such Person, which cash or Cash Equivalents exist on the
Calculation Date or will exist as a result of the transaction giving rise to
the need to calculate the Fixed Charge Coverage Ratio may be added on a pro
forma basis to Net Income for such period.

 

10

 

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

 

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

 

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

 

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

 

(4)           all dividends, whether paid or
accrued and whether or not in cash, on any series of Disqualified Stock or
preferred securities, other than distributions on any outstanding General
Partner Interest and Limited Partner Interest as defined in the Partnership
Agreement, of such Person or any of its Restricted Subsidiaries, other than
dividends on Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted Subsidiary of
the Company; less

 

(B)
to the extent included in (A) above, write-off of any non-recurring charges
relating to any premium or penalty paid, deferred financing costs or other
financial recapitalization charges in connection with, redeeming or retiring
any Indebtedness prior to its Stated Maturity to the extent such losses were
deducted in computing such Consolidated Net Income,

 

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

 

“Foreign Subsidiary” means any Restricted Subsidiary of the
Company that was not formed under the laws of the United States or any state of
the United States or the District of Columbia and that conducts substantially
all of its operations outside the United States.

 

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

 

11

 

“General
Partner” means Pacific Energy Management LLC, a Delaware limited
liability company, its successor by conversion and its successors and permitted
assigns as general partner of Pacific Energy GP, LP, the general partner of the
Company or as the business entity with the ultimate authority to manage the
business and operations of the Company.

 

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

 

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

 

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

 

“Guarantors” means each of:

 

(1)           the Operating Company and the other
Persons executing the Indenture as initial Guarantors; and

 

(2)           any other Restricted Subsidiary of
the Company that becomes a Guarantor in accordance with Section 4.13 or
10.02 hereof and their respective successors and assigns of such Restricted Subsidiaries,
as required under Article 10 hereof, in each case until such time as any such
Restricted Subsidiary shall be released and relieved of its obligations
pursuant to Section 8.02, 8.03 or 10.03 hereof.

 

“Hedging Obligations” means, with respect to any specified
Person, the obligations of such Person incurred in the normal course of
business and consistent with past practices and not for speculative purposes
under:

 

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

 

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

 

(3)           any commodity futures contract,
commodity option or other similar agreement or arrangement designed to protect
against fluctuations in prices; and

 

12

 

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

 

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

 

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

 

(1)           in respect of borrowed money;

 

(2)           evidenced by bonds, notes, debentures
or similar instruments or letters of credit (or reimbursement agreements in
respect thereof), other than letters of credit issued by such Person in the
ordinary course of business, to the extent not drawn;

 

(3)           in respect of bankers’ acceptances;

 

(4)           representing Capital Lease
Obligations;

 

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

 

(6)           representing any Hedging Obligations,

 

if
and to the extent any of the preceding items (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP but excluding amounts
recorded in accordance with Statement of Financial Accounting Standards No.
133.  In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the guarantee by the
specified Person of any Indebtedness of any other Person.

 

The
amount of any Indebtedness outstanding as of any date will be:

 

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

 

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

 

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

 

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

 

“Initial Issuance Date” means September 23, 2005.

 

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

 

13

 

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

 

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

 

“Investments” means, with respect to any Person, all direct
or indirect investments by such Person in other Persons (including Affiliates)
in the forms of loans (including guarantees of Indebtedness), advances or
capital contributions (excluding (1) commission, travel and similar advances to
officers and employees made in the ordinary course of business and (2) advances
to customers in the ordinary course of business that are recorded as accounts receivable
on the balance sheet of the lender), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP. 
If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company will be deemed to have made an Investment on the date of any such
sale or disposition in an amount equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07.  The acquisition by the Company or any
Subsidiary of the Company of a Person that holds an Investment in a third
Person will be deemed to be an Investment made by the Company or such
Subsidiary in such third Person in an amount equal to the fair market value of
the Investment held by the acquired Person in such third Person on the date of
any such acquisition in an amount determined as provided in the final paragraph
of Section 4.07.

 

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

 

“Legal Holiday” means any calendar day other than a Business
Day.  If a payment date is a Legal
Holiday, payment may be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.

 

“Lehman” means Lehman Brothers Inc., a Delaware corporation,
its affiliates and related funds.

 

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

 

“Make-Whole
Amount” with
respect to a Note means an amount equal to the excess, if any, of (a) the
present value of the remaining interest, premium and principal payments due on
such Note (excluding any portion of such payments of interest accrued as of the
redemption date)

 

14

 

as
if such Note were redeemed on September 15, 2010, computed using a discount
rate equal to the Treasury Rate plus 50 basis points, over (b) the outstanding
principal amount of such Note. “Treasury Rate” with respect to a Note means the
yield to maturity (calculated on a semi-annual bond equivalent basis) at the
time of the computation of United States Treasury securities with a constant
maturity (as compiled by 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 of the redemption notice or, if such
Statistical Release is no longer published, any publicly available source of
similar market data) most nearly equal to the then remaining maturity of such
Note assuming that such Note will be redeemed on September 15, 2010; provided, however, that if the Make-Whole
Average Life of a Note is not equal to the constant maturity of the 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
Make-Whole Average Life of such Note 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.

 

“Make-Whole Average Life” means, with respect to a Note, the number of years
(calculated to the nearest one-twelfth of a year) between the date of
redemption of such Note and September 15, 2010.

 

“Make-Whole
Price” means
the greater of (a) the sum of the outstanding principal amount of the Notes to
be redeemed plus the Make-Whole Amount of such Notes and (b) the redemption
price (expressed as a percentage of the principal amount) of such Notes on
September 15, 2010.

 

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

 

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

 

(1)           any gain (but not loss), together
with any related provision for taxes on such gain (but not loss), realized in
connection with: (a) any Asset Sale; or (b) the disposition of any securities
by such Person or any of its Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Subsidiaries; and

 

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

 

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

 

(1)           the direct costs relating to such
Asset Sale and direct costs associated with the sale or disposition of any such
non-cash consideration, including, without limitation,

 

15

 

legal,
accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale,

 

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

 

(3)           amounts required to be applied to the
repayment of Indebtedness secured by a Lien on the properties or assets that
were the subject of such Asset Sale and all distributions and payments required
to be made to minority interest holders in Restricted Subsidiaries as a result
of such Asset Sale, and

 

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

 

‘‘New Credit Facility’’ means the five-year, $400 million
senior secured revolving credit facility to be entered into with Bank of
America, N.A. and Lehman Commercial Paper Inc.

 

“Non-Recourse Debt” means Indebtedness:

 

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

 

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

 

(3)           as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the Company or any of its Restricted Subsidiaries except as contemplated by
clause (9) of the definition of Permitted Liens.

 

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

 

16

 

“Notes” means the Initial Notes, the Exchange Notes, the
Private Exchange Notes and the Additional Notes, treated as a single class.

 

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

 

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

 

“Offering Memorandum” means the offering memorandum of the
Issuers dated September 15, 2005 relating to the offering of the Initial
Notes.

 

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

 

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

 

“Operating Company” means Pacific Energy Group LLC, a
Delaware limited liability company, and its successors.

 

“Operating Surplus” has the meaning assigned to such term in
the Partnership Agreement, as in effect on the date of this Indenture.

 

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

 

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

 

“Partnership Agreement” means the First Amended and Restated
Agreement of Limited Partnership of the Partnership, as amended by Amendment
No. 1 dated as of August 1, 2003, as amended by Amendment No. 2 dated as of
January 27, 2004, as amended by Amendment No. 3 dated as of March 26, 2004, as
the same may be amended or restated at or prior to the Closing Date, as such
may be further amended, modified or supplemented from time to time.

 

“Permitted Business” means either (1) marketing, gathering,
transporting (by barge, pipeline, ship, truck or other modes of hydrocarbon
transportation), terminalling, storing,

 

17

 

producing,
acquiring, developing, exploring for, exploiting, producing, processing,
dehydrating and otherwise handling crude oil, gas, casinghead gas, drip
gasoline, natural gasoline, condensates, distillates, liquid hydrocarbons,
gaseous hydrocarbons and all other constituents, elements, compounds or
products refined or processed from any of the foregoing, which activities shall
include, for the avoidance of doubt, constructing pipeline, platform,
dehydration, processing and other energy-related facilities, and activities or
services reasonably related or ancillary thereto including entering into
purchase and sale agreements, supply agreements and Hedging Obligations related
to these businesses, or (2) any other business that generates gross income at
least 90% of which constitutes “qualifying income” under Section 7704(d) of the
Code.

 

“Permitted Business Investments” means Investments by the
Company or any of its Restricted Subsidiaries in any Unrestricted Subsidiary of
the Company or in any Joint Venture, provided that:

 

(1)           either (a) at the time of such
Investment and immediately thereafter, the Company could incur $1.00 of
additional Indebtedness under the Fixed Charge Coverage Ratio test set forth in
the first paragraph of Section 4.09 or (b) such Investment does not exceed
the aggregate amount of Incremental Funds (as defined in Section 4.07) not
previously expended at the time of making such Investment;

 

(2)           if such Unrestricted Subsidiary or
Joint Venture has outstanding Indebtedness at the time of such Investment,
either (a) all such Indebtedness is Non-Recourse Debt or (b) any such
Indebtedness of such Unrestricted Subsidiaries or Joint Venture that is
recourse to the Company or any of its Restricted Subsidiaries (which shall
include, without limitation, all Indebtedness of such Unrestricted Subsidiary
or Joint Venture for which the Company or any of its Restricted Subsidiaries
may be directly or indirectly, contingently or otherwise, obligated to pay,
whether pursuant to the terms of such Indebtedness, by law or pursuant to any
guarantee, including, without limitation, any “claw-back,” “make-well” or “keep-well”
arrangement) could, at the time such Investment is made, be incurred at that
time by the Company and its Restricted Subsidiaries under the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09; and

 

(3)           such Unrestricted Subsidiary’s or
Joint Venture’s activities are not outside the scope of the Permitted Business.

 

“Permitted Investments” means:

 

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

 

(2)           any Investment in Cash Equivalents;

 

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

 

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

 

18

 

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

 

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

 

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

 

(b)           pursuant to clause (7) of the items
deemed not to be Asset Sales under the definition of “Asset Sale;”

 

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

 

(6)           any Investments received in
compromise of obligations of trade creditors or customers that were incurred in
the ordinary course of business, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of any
trade creditor or customer, or as a result of a foreclosure by the Company or
any of its Restricted Subsidiaries with respect to any secured Investment in
default;

 

(7)           Hedging Obligations permitted to be
incurred under Section 4.09;

 

(8)           loans to officers and employees made
in the ordinary course of business in an aggregate amount not to exceed $1.0
million at anyone time outstanding;

 

(9)           any Investments in prepaid expenses,
negotiable instruments held for collection and lease, utility, workers’
compensation and performance and other similar deposits and prepaid expenses
made in the ordinary course of business;

 

(10)         Permitted Business Investments;

 

(11)         the repurchase, redemption or other
acquisition or retirement for value of any Equity Interest of the Company to
satisfy awards under the General Partner’s Amended and Restated Long Term
Incentive Plan, dated July 26, 2005, provided such repurchases do not exceed an
aggregate of $3.0 million during any calendar year; and

 

(12)         other Investments in any Person having
an aggregate fair market value (measured on the date each such Investment was
made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (12) that are
at the time outstanding, not to exceed the greater of  $40.0 million and 3.0% of the Company’s
Consolidated Net Tangible Assets.

 

“Permitted Liens” means:

 

(1)           Liens securing any Indebtedness under
any of the Credit Facilities and all Obligations and Hedging Obligations
relating to such Indebtedness;

 

19

 

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

 

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

 

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

 

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

 

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

 

(7)           Liens existing on June 16, 2004 other
than Liens securing the Credit Facilities;

 

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

 

(9)           Liens on and pledges of the Equity
Interests of any Unrestricted Subsidiary or any Joint Venture owned by the
Company or any Restricted Subsidiary of the Company to the extent securing
Non-Recourse Debt or other Indebtedness of such Unrestricted Subsidiary or
Joint Venture otherwise permitted by the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09;

 

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

 

20

 

(11)         Liens securing Obligations of the
Issuers or any Guarantor under the Notes or the Subsidiary Guarantees, as the
case may be;

 

(12)         Liens securing any Indebtedness equally
and ratably with all Obligations due under the Notes or any Subsidiary
Guarantee pursuant to a contractual covenant that limits Liens in a manner
substantially similar to Section 4.12;

 

(13)         Liens in favor of collecting or payor
banks having a right of setoff, revocation, refund or chargeback with respect
to money or instruments of the Company or any of its Restricted Subsidiaries on
deposit with or in possession of such bank;

 

(14)         Liens to secure performance of Hedging
Obligations of the Company or any of its Restricted Subsidiaries;

 

(15)         Liens incurred in the ordinary course
of business of the Company or any Restricted Subsidiary of the Company with
respect to obligations that do not exceed $15.0 million at any one time
outstanding; and

 

(16)         any Lien renewing, extending,
refinancing or refunding a Lien permitted by clauses (1) through (15) above;
provided that (a) the principal amount of the Indebtedness secured by such Lien
does not exceed the principal amount of such Indebtedness outstanding
immediately prior to the renewal, extension, refinance or refund of such Lien,
plus all accrued interest on the Indebtedness secured thereby and the amount of
all fees, expenses and premiums incurred in connection therewith, and (b) no
assets encumbered by any such Lien other than the assets permitted to be
encumbered immediately prior to such renewal, extension, refinance or refund
are encumbered thereby.

 

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

 

(1)           the principal amount of such
Permitted Refinancing Indebtedness does not exceed the principal amount of the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded (plus all accrued interest on the Indebtedness and the amount of all
fees and expenses and premiums incurred in connection therewith);

 

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

 

(3)           if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes or the Subsidiary Guarantees, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Notes or the Subsidiary
Guarantees on terms at least as favorable to the Holders as

 

21

 

those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and

 

(4)           such Indebtedness is not incurred by
a Restricted Subsidiary of the Company if the Company is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.

 

Notwithstanding
the preceding, any Indebtedness incurred under Credit Facilities pursuant to
Section 4.09 shall be subject only to the refinancing provision in the
definition of Credit Facilities and not pursuant to the requirements set forth
in the definition of Permitted Refinancing Indebtedness.

 

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

 

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

 

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

 

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

 

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

 

“Qualifying Owners” means (1) the significant owners of the ultimate
parent company of the General Partner on the date of this Indenture, including,
without limitation, Lehman and its affiliates (together with any Affiliate
transferees thereof); and (2) any transferee of any of the foregoing to the
extent such transferee is approved by a majority of the ownership interests of
the then-existing Qualifying Owners (other than the transferor) or any
Affiliate of the foregoing.

 

“Rating Categories” means:

 

(1)           with respect to S&P, any of the
following categories:  AAA, AA, A, BBB,
BB, B, CCC, CC, C and D (or equivalent successor categories); and

 

(2)           with respect to Moody’s, any of the
following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent
successor categories).

 

“Rating Decline” means a decrease in the rating of the Notes
by either Moody’s or S&P by one or more gradations (including gradations
within Rating Categories as well as between Rating Categories).  In determining whether the rating of the
Notes has decreased by one or more gradations, gradations within Rating
Categories, namely + or – for S&P, and 1, 2, and 3 for Moody’s, will be
taken into account; for example, in the case of S&P, a rating decline
either from BB+ to BB or BB- to B+ will constitute a decrease of one gradation.

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Sale and Leaseback Transaction” means an arrangement
relating to property owned by the Company or a Restricted Subsidiary on the
Initial Issuance Date or thereafter acquired by the Company or a Restricted
Subsidiary 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” or “Commission”
means the Securities and Exchange Commission.

 

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

 

“Senior Debt” means

 

(1)           all Indebtedness of the Company or
any Restricted Subsidiary outstanding under Credit Facilities and all Hedging
Obligations with respect thereto;

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Subsidiary Guarantee” means any guarantee by a Guarantor of
the Issuers’ Obligations under the indenture and on the Notes.

 

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

 

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

 

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

 

24

 

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

 

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

 

(1)           has no Indebtedness other than
Non-Recourse Debt;

 

(2)           except as permitted in (4) and (5) of
Section 4.11, is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company;

 

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

 

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

 

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

 

“Valero Assets” means the assets to be purchased from three
subsidiaries of Valero L.P., Support Terminals Operating Partnership, L.P.,
Kaneb Pipe Line Operating Partnership, L.P., and Shore Terminals LLC, pursuant
to the terms of the Sale and Purchase Agreement dated July 1, 2005.  The Valero Assets are comprised of the
following three asset packages:

 

(1)           West
Coast terminals in the San Francisco, California area, specifically, the
Martinez terminal and the Richmond terminal;

 

(2)           East
Coast terminals in the Philadelphia, Pennsylvania area, specifically, the North
Philadelphia terminal, the South Philadelphia terminal and the Paulsboro, New
Jersey terminal; and

 

25

 

(3)           West
pipeline system in the U.S. Rocky Mountain region, which consists of 550 miles
of refined products pipeline extending from Casper, Wyoming east to Rapid City,
South Dakota and south to Colorado Springs, Colorado.

 

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

 

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

 

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

 

(2)           the then outstanding principal amount
of such Indebtedness.

 

Section 1.02.          Other Definitions.

 

	
  Term

  	
   

  	
  Defined
  in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  	
   

  
	
  “Appendix”

  	
   

  	
  2.01

  	
   

  
	
  “Asset Sale Offer”

  	
   

  	
  3.10

  	
   

  
	
  “Change of Control Offer”

  	
   

  	
  4.15

  	
   

  
	
  “Change of Control Payment”

  	
   

  	
  4.15

  	
   

  
	
  “Change of Control Purchase Date”

  	
   

  	
  4.15

  	
   

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  	
   

  
	
  “Deadline”

  	
   

  	
  3.08

  	
   

  
	
  “Discharge”

  	
   

  	
  8.08

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Excess Proceeds”

  	
   

  	
  4.10

  	
   

  
	
  “Incremental Funds”

  	
   

  	
  4.07

  	
   

  
	
  “incur”

  	
   

  	
  4.09

  	
   

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  	
   

  
	
  “Offer Amount”

  	
   

  	
  3.10

  	
   

  
	
  “Offer Period”

  	
   

  	
  3.10

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Payment Default”

  	
   

  	
  6.01

  	
   

  
	
  “Permitted Debt”

  	
   

  	
  4.09

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Restricted Payments”

  	
   

  	
  4.07

  	
   

  
	
  “Settlement Date”

  	
   

  	
  3.10

  	
   

  
	
  “Successor”

  	
   

  	
  3.08

  	
   

  
	
  “Special Mandatory Redemption
  Date”

  	
   

  	
  3.08

  	
   

  

 

26

 

	
  Term

  	
   

  	
  Defined
  in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Termination Date”

  	
   

  	
  3.10

  	
   

  

 

Section 1.03.          Incorporation by Reference of
Trust Indenture Act.

 

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

 

Section 1.04.          Rules of Construction.

 

Unless
the context otherwise requires:

 

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

 

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

 

(3)           “or” is not exclusive;

 

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

 

(5)           provisions apply to successive events and transactions;

 

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

 

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

 

ARTICLE 2

THE NOTES

 

Section 2.01.          Form and Dating.

 

Provisions
relating to the Initial Notes, the Private Exchange Notes and the Exchange
Notes are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
“Appendix”), which is hereby incorporated
in and expressly made part of this Indenture. The Initial Notes and the Trustee’s
certificate of authentication therefor shall be substantially in the form of
Exhibit 1 to the Appendix which is hereby incorporated in and expressly made a
part of this Indenture.  The Exchange
Notes, the Private Exchange Notes and the Trustee’s certificate of
authentication therefor shall be substantially in the form of Exhibit A to the
Appendix, which is hereby incorporated in and expressly made a part of this
Indenture.  The Notes may have notations,

 

27

 

legends
or endorsements required by law, stock exchange rule, agreements to which an
Issuer is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company).  Each Note shall be dated the date of its
authentication.  The terms of the Notes
set forth in the Appendix are part of the terms of this Indenture.

 

Section 2.02.          Execution and Authentication.

 

An
Officer shall sign the Notes on behalf of each Issuer by manual or facsimile
signature.

 

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

 

A
Note shall not be valid until an authorized signatory of the Trustee manually
signs the certificate of authentication on the Note.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.

 

On
the Initial Issuance Date, the Trustee shall authenticate and deliver $175
million principal amount of 6 1⁄4% Senior Notes due 2015 and, at any time
and from time to time thereafter, the Trustee shall authenticate and deliver
Notes for original issue in an aggregate principal amount specified in such
order, in each case upon a written order of the Issuers.  Such order shall specify the amount of the
Notes to be authenticated and the date on which the original issue of Notes is
to be authenticated and, in the case of an issuance of Additional Notes
pursuant to Section 2.13 after the Initial Issuance Date, shall certify that
such issuance is in compliance with Section 4.09.

 

The
Trustee may appoint an authenticating agent reasonably acceptable to the
Issuers to authenticate the Notes. 
Unless limited by the terms of such appointment, an authenticating agent
may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as any Registrar, Paying Agent or agent for service of notices and demands.

 

Section 2.03.          Registrar and Paying Agent.

 

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

 

The
Issuers shall enter into an appropriate agency agreement with any Registrar or
Paying Agent not a party to this Indenture, which shall incorporate the terms
of the TIA.  The agreement shall
implement the provisions of this Indenture that relate to such agent.  The Issuers shall notify the Trustee of the
name and address of any such agent.  If
the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act
as such and shall be entitled to appropriate compensation therefor pursuant to
Section 7.07.  The Company or any
Subsidiary may act as Paying Agent or Registrar.

 

28

 

The
Issuers initially appoint the Trustee as Registrar and Paying Agent in
connection with the Notes.

 

Section 2.04.          Paying Agent to Hold Money in
Trust.

 

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

 

Section 2.05.          Noteholder Lists.

 

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

 

Section 2.06.          Transfer and Exchange.

 

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

 

Section 2.07.          Replacement Notes.

 

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

 

29

 

Guarantors,
the Trustee, the Paying Agent and the Registrar from any loss which any of them
may suffer if a Note is replaced.  The
Issuers and the Trustee may charge the Holder for their expenses in replacing a
Note.

 

Every
replacement Note is an additional obligation of the Issuers.

 

Section 2.08.          Outstanding Notes.

 

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

 

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

 

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

 

Section 2.09.          Temporary Notes.

 

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

 

Section 2.10.          Cancellation.

 

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

 

Section 2.11.          Defaulted Interest.

 

If
the Issuers default in a payment of interest on the Notes, the Issuers shall
pay defaulted interest (plus interest on such defaulted interest to the extent
lawful) in any lawful manner.  The
Issuers may pay the defaulted interest to the Persons who are Noteholders on a
subsequent

 

30

 

special
record date.  The Issuers shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Noteholder a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.

 

Section 2.12.          CUSIP Numbers.

 

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

 

Section 2.13.          Issuance of Additional Notes.

 

The
Issuers shall be entitled, subject to their compliance with Section 4.09 (if
applicable), to issue an unlimited amount of Additional Notes under this
Indenture which shall have identical terms as the Initial Notes issued on the
Initial Issuance Date, other than with respect to the date of issuance and issue
price.  The Initial Notes issued on the
Initial Issuance Date, any Additional Notes and all Exchange Notes or Private
Exchange Notes issued in exchange therefor shall be treated as a single class
for all purposes under this Indenture.

 

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

 

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

 

(2)           the issue price, the issue date and
the CUSIP number and any corresponding ISIN of such Additional Notes; and

 

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

 

ARTICLE 3

REDEMPTION AND PREPAYMENT

 

Section 3.01.          Notices to Trustee.

 

If
the Issuers elect to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, they shall furnish to the Trustee, at least
five Business Days (unless a shorter period shall be agreeable to the Trustee)
before the date of giving notice of the redemption pursuant to Section 3.03, an
Officers’ Certificate setting forth (i) the clause of Section 3.07 pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the

 

31

 

principal
amount of Notes to be redeemed, (iv) the redemption price, and (v) whether it
requests the Trustee to give notice of such redemption.  Any such notice may be cancelled at any time
prior to the mailing of notice of such redemption to any Holder and shall
thereby be void and of no effect.

 

Section 3.02.          Selection of Notes to Be
Redeemed.

 

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

 

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

 

The
provisions of the two preceding paragraphs of this Section 3.02 shall not apply
with respect to any redemption affecting only a Global Note, whether such
Global Note is to be redeemed in whole or in part.  In case of any such redemption in part, the
unredeemed portion of the principal amount of the Global Note shall be in an
authorized denomination.

 

Section 3.03.          Notice of Redemption.

 

Subject
to the provisions of Section 3.10 hereof, at least 30 days but not more than 60
days before a redemption date, except that redemption notices may be mailed
more than 60 days prior to a redemption date if the notice is issued in
connection with a Legal Defeasance, Covenant Defeasance or Discharge, the
Issuers shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.

 

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

 

(a)           the redemption date;

 

(b)           the redemption price;

 

(c)           if any Note is being redeemed in
part, the portion of the principal amount of such Note to be redeemed and that,
after the redemption date upon surrender of such

 

32

 

Note,
a new Note or Notes in a principal amount equal to the unredeemed portion shall
be issued in the name of the Holder upon cancellation of the original Note;

 

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

 

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

 

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

 

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

 

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

 

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

 

At
the Issuers’ request, the Trustee shall give the notice of redemption in the
Issuers’ names and at their expense; provided, however, that the Issuers shall
have delivered to the Trustee, as provided in Section 3.01, an Officers’
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the second preceding
paragraph.

 

Section 3.04.          Effect of Notice of Redemption.

 

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

 

Section 3.05.          Deposit of Redemption Price.

 

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

 

33

 

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

 

Section 3.06.          Notes Redeemed in Part.

 

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

 

Section 3.07.          Optional Redemption.

 

(a)           Except as set forth in clause (b) or
clause (c) of this Section 3.07, the Issuers shall not have the option to
redeem the Notes pursuant to this Section 3.07 prior to September 15,
2010.  On or after September 15, 2010,
the Issuers shall have the option to redeem the Notes, in whole or in part,
upon not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest and Additional Interest, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
September 15 of the years indicated below:

 

	
  YEAR

  	
   

  	
  PERCENTAGE

  	
   

  
	
  2010

  	
   

  	
  103.125

  	
  %

  
	
  2011

  	
   

  	
  102.083

  	
  %

  
	
  2012

  	
   

  	
  101.042

  	
  %

  
	
  2013 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           Notwithstanding the provisions of
clause (a) of this Section 3.07, at any time prior to September 15, 2008, the
Issuers may on one or more occasions redeem up to 35% of the aggregate
principal amount of Notes (including any Additional Notes) issued under this
Indenture at a redemption price of 106.25% of the principal amount thereof,
plus accrued and unpaid interest and Additional Interest, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings,
provided that:

 

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

 

34

 

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

 

(c)           At any time prior to September 15,
2010, the Issuers may, at their option, redeem all or any portion of the Notes
at the Make-Whole Price plus accrued and unpaid interest to the date of
redemption.

 

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

 

Section 3.08.          Special Mandatory Redemption

 

If the Issuers have not consummated the acquisition of at least
two of the three asset packages that comprise the Valero Assets on or before
the day that is 120 days after the Issue Date, then the Issuers will, on a day not more
than 30 business days after such date (the “Deadline”), or
such earlier date determined by the Issuers and permitted by applicable law
(such date, the “Special Mandatory Redemption Date”),
redeem all of the Notes at a redemption price equal to 99.545% of the principal
amount of the Notes, plus accrued and unpaid interest.  Notice of a special mandatory redemption
prior to the Deadline will be mailed promptly to each Holder of Notes at its
registered address, and the Trustee.  On
the Special Mandatory Redemption Date, the Company shall pay to a paying agent
for payment to each Holder of Notes the redemption price for such Holder’s
Notes.

 

Section 3.09.          Mandatory Redemption.

 

Except as set forth under
Sections 3.08, 4.10 and 4.15 hereof, neither of the Issuers shall be required
to make mandatory redemption or sinking fund payments with respect to the Notes
or to repurchase the Notes at the option of the Holders.

 

Section 3.10.          Offer to Purchase by Application
of Excess Proceeds.

 

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

 

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

 

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

 

35

 

Sale
Offer.  The Asset Sale Offer shall be
made to all Holders.  The notice, which
shall govern the terms of the Asset Sale Offer, shall state:

 

(a)           that the Asset Sale Offer is being
made pursuant to this Section 3.10 and Section 4.10 hereof and the length of
time the Asset Sale Offer shall remain open, including the time and date the
Asset Sale Offer will terminate (the “Termination Date”);

 

(b)           the Offer Amount and the purchase
price;

 

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

 

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

 

(e)           that Holders electing to have a Note
purchased pursuant to an Asset Sale Offer may only elect to have all of such
Note purchased and may not elect to have only a portion of such Note purchased;

 

(f)            that Holders electing to have a Note
purchased pursuant to any Asset Sale Offer shall be required to surrender the
Note, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Note completed, to the Company or a Paying Agent at the address
specified in the notice, before the Termination Date;

 

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

 

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

 

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

 

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

 

36

 

Promptly
after the Termination Date, the Company shall, to the extent lawful, accept for
payment Notes or portions thereof tendered pursuant to the Asset Sale Offer in
the aggregate principal amount required by Section 4.10 hereof, and prior to
the Settlement Date it shall deliver to the Trustee an Officers’ Certificate
stating that such Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.10 and Section
4.10.  On the Settlement Date, the
Company or the Paying Agent, as the case may be, shall mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Company for purchase, and the Company shall
issue a new Note, and the Trustee shall authenticate and mail or deliver such
new Note to such Holder, in a principal amount equal to any unpurchased portion
of the Note surrendered.  Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder thereof.  The Company shall publicly announce the
results of the Asset Sale Offer on or before the Settlement Date.

 

ARTICLE 4

COVENANTS

 

Section 4.01           Payment of Notes.

 

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

 

The
Issuers shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal at the rate equal to the
interest rate on the Notes to the extent lawful; and they shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Additional Interest, if any (without
regard to any applicable grace period), at the same rate to the extent lawful.

 

Section 4.02           Maintenance of Office or Agency.

 

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

 

The
Issuers may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from

 

37

 

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

 

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

 

Section 4.03           Reports.

 

(a)           Notwithstanding that the Company may
not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, so long as any Notes are outstanding, the Company will file with
the SEC (unless the SEC will not accept such a filing) for public availability
within the time periods specified in the SEC’s rules and regulations under the
Exchange Act and, within five (5) Business Days of filing, or attempting to
file, the same with the SEC, furnish to the Trustee and, upon its prior
request, to any of the Holders or Beneficial Owners of the Notes:

 

(1)           all quarterly and annual financial and
other information with respect to the Company and its Subsidiaries that would
be required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such forms, including a “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and,
with respect to the annual information only, a report on the annual financial
statements by the Company’s certified independent accountants; and

 

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

 

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

 

(b)           The Company and the Guarantors have
agreed that, for so long as any Notes remain outstanding, they will furnish to
the Holders and Beneficial Owners of the Notes and to securities analysts and
prospective investors in the Notes, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(c)           If the Company has designated any of
its Subsidiaries as Unrestricted Subsidiaries, and if the aggregate cash flow
of such Unrestricted Subsidiaries constitute more that 10% of the cash flow of
the Company on a consolidated basis, then the quarterly and annual financial
information required by paragraph (a) of this Section 4.03 will include a
reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto, and in Management’s Discussion and
Analysis of Financial Condition and Results of Operations, of the financial
condition and results of operations of the Company and Restricted Subsidiaries,
separate from the financial condition and results of operations of the
Unrestricted Subsidiaries of the Company.

 

38

 

Section 4.04           Compliance Certificate.

 

(a)           The Issuers shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers’
Certificate stating that a review of the activities of the Company and its
Restricted Subsidiaries during the preceding fiscal year has been made under
the supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event
of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is taking
or proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments of interest on the Notes are prohibited or if such event has occurred,
a description of the event and what action the Company is taking or proposes to
take with respect thereto.

 

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

 

Section 4.05           Taxes.

 

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

 

Section 4.06           Stay, Extension and Usury Laws.

 

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

 

Section 4.07           Limitation on Restricted Payments.

 

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

 

(1)           declare or pay any dividend or make
any other payment or distribution on account of the Company’s or any of its
Restricted Subsidiaries’ Equity Interests or to the direct or indirect holders
of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in
their

 

39

 

capacity
as such (other than dividends or distributions payable in Equity Interests
(other than Disqualified Stock) of the Company or payable to the Company or a
Restricted Subsidiary of the Company);

 

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

 

(3)           make any payment on or with respect
to, or purchase, redeem, defease or otherwise acquire or retire for value, any
Indebtedness that is subordinated to the Notes or the Subsidiary Guarantors,
except a payment of interest or principal within one month of the Stated
Maturity thereof; or

 

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

 

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

 

(1)           if the Fixed Charge Coverage Ratio
for the Company’s most recently ended four full fiscal quarters for which
internal financial statements are available at the time of such Restricted
Payment is not less than 1.75 to 1.0, such Restricted Payment, together with
the aggregate amount of all other Restricted Payments made by the Company and
its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses
(2), (3), (4) and (5) of the next succeeding paragraph) with respect to the
quarter for which such Restricted Payment is made, is less than the sum,
without duplication, of:

 

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

 

(b)           100% of the aggregate net cash
proceeds received by the Company (including the fair market value of any
Permitted Business or long-term assets that are used or useful in a Permitted
Business to the extent acquired in consideration of Equity Interests of the
Company (other than Disqualified Stock)) since June 16, 2004 as a contribution
to its common equity capital or from the issue or sale of Equity Interests of
the Company (other than Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or exchangeable
debt securities of the Company that have been converted into or exchanged for
such Equity Interests (other than Equity Interests (or Disqualified Stock or
debt securities) sold to a Restricted Subsidiary of the Company), plus

 

(c)           to the extent that any Restricted
Investment that was made after June 16, 2004 is sold for cash or Cash
Equivalent or otherwise liquidated or repaid for cash or Cash Equivalent, the
lesser of (i) the return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (ii) the initial amount of such
Restricted Investment, plus

 

40

 

(d)           the net reduction in Restricted
Investments resulting from dividends, repayments of loans or advances, or other
transfers of assets in each case to the Company or any of its Restricted
Subsidiaries from any Person (including, without limitation, Unrestricted
Subsidiaries) or from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries, to the extent such amounts have not been included in Available
Cash from Operating Surplus for any period commencing on or after June 16, 2004
(items (b), (c) and (d) being referred to as “Incremental
Funds”), minus

 

(e)           the aggregate amount of Incremental
Funds previously expended pursuant to this clause (1) and clause (2) below; or

 

(2)           if the Fixed Charge Coverage Ratio
for the Company’s most recently ended four full fiscal quarters for which
internal financial statements are available at the time of such Restricted
Payment is less than 1.75 to 1.00, such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries (excluding Restricted Payments permitted by clauses
(2), (3), (4) and (5) of the next succeeding paragraph) with respect to the
quarter for which such Restricted Payment is made (such Restricted Payments for
purposes of this clause (2) meaning only distributions on limited partnership
interests of the Company, plus the related distribution on the general partner
interest), is less than the sum, without duplication, of:

 

(a)           $100 million less the aggregate
amount of all Restricted Payments made by the Company and its Restricted
Subsidiaries pursuant to this clause (2)(a) during the period ending on the
last day of the fiscal quarter immediately preceding the date of such
Restricted Payment and beginning on June 16, 2004, plus

 

(b)           Incremental Funds to the extent not
previously expended pursuant to this clause (2) or clause (1) above.

 

So
long as no Default or Event of Default has occurred and is continuing or would
be caused thereby (except (i) with respect to clause (1) below under which the
payment of a distribution or dividend is permitted, and (ii) a dividend or
distribution by a non-Guarantor Subsidiary under clause (4)), the preceding
provisions will not prohibit:

 

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

 

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

 

41

 

excluded
or deducted from the calculation of Available Cash from Operating Surplus and
Incremental Funds;

 

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

 

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

 

(5)           the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company or
any Restricted Subsidiary of the Company held by any current or former director
or employee of the General Partner, the Company or any of the Company’s
Restricted Subsidiaries pursuant to any director or employee equity
subscription agreement or plan, stock or unit option agreement or similar
agreement or plan; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may not exceed $3.0
million in any twelve-month period.

 

The
amount of all Restricted Payments (other than cash) will be the fair market
value on the date of the Restricted Payment of the asset(s) or securities proposed
to be transferred or issued by the Company or such Restricted Subsidiary, as
the case may be, pursuant to the Restricted Payment.  The fair market value of any assets or
securities that are required to be valued by this covenant will be determined,
in the case of amounts under $15.0 million, by an officer of the General
Partner and, in the case of amounts over $15.0 million, by the Board of
Directors, whose determination shall be evidenced by a Board Resolution.  For purposes of determining compliance with
this Section 4.07, in the event that a Restricted Payment meets the
criteria of more than one of the categories of Restricted Payments described in
the preceding clauses (1) – (5), the Company will be permitted to classify (or
later classify or reclassify in whole or in part in its sole discretion) such
Restricted Payment in any manner that complies with this Section 4.07.

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

(1)           agreements as in effect since June
16, 2004, including the Credit Agreement, and the indenture governing the
Issuers’ $250 million 7 1/8 % senior notes due 2014, any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of those agreements or the
Indebtedness to which they relate, provided that the amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacement or refinancings
are no more restrictive, taken as a whole, with respect to such dividend,
distribution and other payment restrictions than those contained in those
agreements on the date of this Indenture;

 

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

 

(3)           Applicable Law;

 

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

 

(5)           customary non-assignment provisions
in transportation agreements or purchase and sale or exchange agreements or
similar operational agreements or in licenses or leases, in each case entered
into in the ordinary course of business;

 

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

 

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

 

(8)           Permitted Refinancing Indebtedness,
provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being refinanced;

 

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

 

43

 

(10)         provisions with respect to the
disposition or distribution of assets or property in joint venture agreements,
asset sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;

 

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

 

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

 

(13)         any agreement or instrument governing
Indebtedness permitted to be incurred under this Indenture, provided that the
terms and conditions of any such restrictions and encumbrances, taken as a
whole, are not materially more restrictive than those contained in this
Indenture, taken as a whole; and

 

(14)         provisions with respect to the
disposition or distribution of assets or property in joint venture agreements
and other similar agreements, including clawback, “make-well” or “keep-well”
agreements, to maintain financial performance or results of operations of a
joint venture entered into in the ordinary course of business.

 

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

 

The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to (collectively, “incur”)
any Indebtedness (including Acquired Debt), and the Company will not issue any
Disqualified Stock, the Company will not permit any Restricted Subsidiary to
issue any Disqualified Stock and the Company will not permit any of its other
Restricted Subsidiaries to issue any preferred securities; provided, however,
that the Issuers and any Restricted Subsidiaries may incur Indebtedness
(including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge
Coverage Ratio for the Company’s most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.0 to 1.0, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred or Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.

 

The first paragraph of this
Section 4.09 will not prohibit the incurrence of any of the following items of
Indebtedness (collectively, “Permitted Debt”):

 

(1)           the incurrence by the Company or any
of its Restricted Subsidiaries of additional Indebtedness (including letters of
credit) under one or more Credit Facilities in an aggregate principal amount at
any one time outstanding under this clause (1) (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability of
the Company and its Subsidiaries thereunder) not to exceed the greater of
$325.0 million and 15% of Consolidated Net Tangible Assets;

 

44

 

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

 

(3)           the existing aggregate principal
amount $250.0 million 71/8 % senior notes due 2014 issued
by the Issuers and any associated guarantees;

 

(4)           the incurrence by the Company or any
of its Restricted Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this clause
(4), not to exceed $30.0 million at any time outstanding;

 

(5)           the incurrence by the Company or any
of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to refund, refinance or
replace Indebtedness that was permitted by this Indenture to be incurred under
the first paragraph of this covenant or clause (2) or (3) of this Section 4.09
or this clause (5);

 

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

 

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

 

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

 

(7)           the incurrence by the Company or any
of its Restricted Subsidiaries of Hedging Obligations;

 

45

 

(8)           the incurrence by the Company or any
of its Restricted Subsidiaries of Acquired Debt in connection with a merger or
consolidation meeting any one of the financial tests set forth in clause (3) of
Section 5.01;

 

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

 

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

 

(11)         the incurrence by the Company or any of
its Restricted Subsidiaries of additional Indebtedness in an aggregate
principal amount at any time outstanding, not to exceed the greater of $45.0
million and 3% of Consolidated Net Tangible Assets.

 

For purposes of determining
compliance with this Section 4.09, (a) in the event that an item of
Indebtedness (including Acquired Debt) meets the criteria of more than one of
the categories of Permitted Debt described in clauses (1) through (11) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company will be permitted to classify (or later classify or
reclassify in whole or in part in its sole discretion) such item of
Indebtedness in any manner that complies with this Section 4.09; and (b)
Indebtedness outstanding in currencies other than US dollars shall be converted
on the date of incurrence.

 

The accrual of interest, the
accretion or amortization of original issue discount, the payment of interest
on any Indebtedness in the form of additional Indebtedness with the same terms,
and the payment of dividends on Disqualified Stock in the form of additional
shares of the same class of Disqualified Stock will not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of
this Section 4.09.

 

Section 4.10.          Limitation on Asset Sales.

 

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

 

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

 

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

 

46

 

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

 

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

 

(b)           any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are, within 365 days after the Asset
Sale, converted by the Company or such Subsidiary into cash, to the extent of
the cash received in that conversion.

 

Within 365 days after the
receipt of any Net Proceeds from an Asset Sale, the Company or any such
Restricted Subsidiary may apply (or enter into a definitive agreement for such
application within such 365-day period, provided that such Net Proceeds are in
fact applied within 45 days after the end of such 365-day period) those Net
Proceeds at its option to any combination of the following:

 

(I)            to repay Senior Debt;

 

(II)           to acquire all or
substantially all of the properties or assets of a Person primarily engaged in
a Permitted Business;

 

(III)         to acquire a majority of
the Voting Stock of a Person primarily engaged in a Permitted Business;

 

(IV)         to make capital
expenditures; or

 

(V)           to acquire other assets
that are used or useful in a Permitted Business or make any Permitted Business
Investment to the extent permitted by Section 4.07.

 

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

 

On the 366th day
after the Asset Sale (or, at the Company’s option, any earlier date), if the
aggregate amount of Excess Proceeds then exceeds $30.0 million, the Company
will make an offer to all Holders, and all holders of other Indebtedness that
is Pari Passu with the Notes containing provisions similar to those set forth
in this Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets, to purchase the maximum principal amount of Notes
and such other Pari Passu Indebtedness
that may be purchased out of the Excess Proceeds.

 

47

 

The offer price
in any Asset Sale Offer will be equal to 100% of principal amount plus accrued
and unpaid interest, if any, to the Settlement Date, subject to the right of
Holders of record on the relevant record date to receive interest due on an
interest payment date that is on or prior to the Settlement Date, and will be
payable in cash.  If any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use those
Excess Proceeds for any purpose not otherwise prohibited by this Indenture,
including, without limitation, the repurchase or redemption of Indebtedness
that is subordinated to the Notes or, in the case of any Subsidiary Guarantee,
the guarantee of such Guarantor.  If the
aggregate principal amount of Notes and other Pari Passu Indebtedness
tendered in such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee will select the Notes and such other Pari Passu Indebtedness
to be purchased on a pro rata basis. 
Upon completion of each Asset Sale Offer, the amount of Excess Proceeds
will be reset at zero.

 

The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent those laws and regulations are
applicable in connection with each repurchase of Notes pursuant to an Asset
Sale Offer.  To the extent that the
provisions of any securities laws or regulations conflict with the provisions
of this Section 4.10, the Company will comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
under such provisions by virtue of such conflict.

 

Section 4.11           Limitation on Transactions with Affiliates.

 

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

 

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

 

(2)           the Company delivers to the Trustee:

 

(a)           with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $20.0 million, a resolution of the Board of
Directors set forth in an Officers’ Certificate certifying that such Affiliate
Transaction complies with this Section 4.11 and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors; and

 

(b)           with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $75.0 million, a written opinion as to the fairness
to the Holders of such Affiliate Transaction from a financial

 

48

 

point
of view issued by an accounting, appraisal or investment banking firm of
national standing.

 

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

 

(1)           any employment, equity award, equity
option or equity appreciation agreement or plan entered into by the Company or
any of its Restricted Subsidiaries or the General Partner in the ordinary
course of business;

 

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

 

(3)           transactions with a Person that is an
Affiliate of the Company solely because the Company owns an Equity Interest in
such Person;

 

(4)           transactions effected in accordance
with the terms of agreements disclosed in the Company’s Annual Report on Form
10-K for the year ended December 31, 2004 (including the exhibits thereto) that
are also identified in Annex C to this Indenture, in each case as such
agreements are in effect on the date of this Indenture, and any amendment or
replacement of any of such agreements so long as such amendment or replacement
agreement is no less advantageous to the Company in any material respect than
the agreement so amended or replaced;

 

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

 

(6)           the provision by Persons who may be
deemed Affiliates of holders of Equity Interests of the Company, of commercial
banking, trust, lending or financing, investment, financial advisory or similar
services, to the Company or its Restricted Subsidiaries, on customary term;

 

(7)           sales of any securities to Affiliates
of the Company provided that the syndicate involved in such sale of securities
includes an unaffiliated investment bank of national standing;

 

(8)           in the case of gathering,
transportation, marketing, hedging, production handling, operating,
construction, storage, platform use, or other operational contracts, any such
contracts are entered into in the ordinary course of business on terms
substantially similar to those contained in similar contracts entered into by
the Company or any Restricted Subsidiary and third parties or, if neither the
Company nor any Restricted Subsidiary has entered into a similar contract with
a third party, that the terms are no less favorable than those available from
third parties on an arm’s-length basis, as determined by the Board of Directors
of the General Partner; and

 

(9)           Restricted Payments that are
permitted by Section 4.07 hereof.

 

49

 

Section 4.12           Limitation on Liens.

 

The Company will not and will
not permit any of its Restricted Subsidiaries to, create, incur, assume or
otherwise cause or suffer to exist or become effective any Lien of any kind
(other than Permitted Liens) securing Indebtedness or Attributable Debt upon
any of their property or assets, now owned or hereafter acquired, unless the
Notes or any Subsidiary Guarantee of such Restricted Subsidiary, as applicable,
is secured on an equal and ratable basis (or on a senior basis to, in the case
of obligations subordinated in right of payment to the Notes or such Subsidiary
Guarantee, as the case may be) with the obligations so secured until such time
as such obligations are no longer secured by a Lien (other than Permitted
Liens).

 

Section 4.13           Additional Subsidiary Guarantees.

 

If, after the date of this
Indenture, any Domestic Subsidiary of the Company that is not already a
Guarantor (including, without limitation, any Domestic Subsidiary acquired or
created after the date of the indenture) guarantees any other Indebtedness in
excess of a De Minimis Guaranteed Amount of either of the Issuers or any
Indebtedness of the Operating Company or a Subsidiary Guarantor, or the
Operating Company, if not then a Guarantor, guarantees any other Indebtedness
of either of the Issuers or a Subsidiary Guarantor in excess of a De Minimis
Guaranteed Amount or incurs any Indebtedness under any Credit Facility in
excess of a De Minimis Guaranteed Amount, then in either case that Subsidiary
will become a Guarantor by executing a supplemental indenture substantially in
the form of Annex A hereto and delivering it to the Trustee within 180 days of
the date on which it guaranteed or incurred such Indebtedness in excess of a De
Minimis Guaranteed Amount, as the case may be, together with any Officers’
Certificate or Opinion of Counsel required by Section 9.06; provided, however,
that the preceding shall not apply to Subsidiaries of the Company that have
properly been designated as Unrestricted Subsidiaries in accordance with this
Indenture for so long as they continue to constitute Unrestricted Subsidiaries.  Notwithstanding the preceding, any guarantee
of a Restricted Subsidiary that was incurred pursuant to this Section 4.13 as a
result of a guarantee of any other Indebtedness in excess of a De Minimis Guaranteed
Amount shall provide by its terms that it shall be automatically and
unconditionally released upon the release or discharge of the guarantee that
resulted in the creation of such Restricted Subsidiary’s guarantee, except a
discharge or release by, or as a result of payment under, such guarantee.

 

Section 4.14           Corporate Existence.

 

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

 

50

 

Section 4.15           Offer to Repurchase Upon Change of Control.

 

(1)           Within 30 days following the
occurrence of a Change of Control, the Company shall make an offer (a “Change of Control Offer”) to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of each Holder’s Notes at a
purchase price (the “Change of Control Payment”)
in cash equal to 101% of the aggregate principal amount of Notes outstanding,
plus accrued and unpaid interest and Additional Interest, if any, thereon 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 Purchase Date. 
Within 30 days following a Change of Control, the Company shall mail a
notice of the Change of Control Offer to each Holder and the Trustee describing
the transaction that constitutes the Change of Control and stating:

 

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

 

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

 

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

 

iv.            that any Note not tendered will
continue to accrue interest and Additional Interest, if any;

 

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

 

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

 

vii.           that Holders will be entitled to
withdraw their election if the Paying Agent receives, prior to the termination
of the Change of Control Offer, a telegram, telex, facsimile transmission or
letter setting forth the name of the

 

51

 

Holder,
the principal amount of Notes delivered for purchase, and a statement that such
Holder is withdrawing its election to have the Notes purchased; and

 

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

 

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

 

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

 

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

 

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

 

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

 

(3)           The Change of Control provisions
described above shall be applicable whether or nor any other provisions of this
Indenture are applicable.

 

(4)           The Company shall not be required to
make a Change of Control Offer following a Change of Control if a third party
makes the Change of Control Offer in the manner, at the time and otherwise in
compliance with the

 

52

 

requirements
set forth in this Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes properly tendered and not withdrawn under such
Change of Control Offer.

 

Section 4.16.          Permitted Business Activities.

 

The Company will not, and will
not permit any Restricted Subsidiary to, engage in any business other than a
Permitted Business, except to such extent as would not be material to the
Company and its Restricted Subsidiaries taken as a whole.

 

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

 

Section 4.17.          Sale and Leaseback Transactions.

 

The Company will not, and will not
permit any of its Restricted Subsidiaries to, enter into any Sale and Leaseback
Transaction; provided that the Company or any Guarantor may enter into a Sale
and Leaseback Transaction if:

 

(1)           the Company or that Guarantor, as
applicable, could have (a) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such Sale and Leaseback Transaction under the
Fixed Charge Coverage Ratio test in the first paragraph of Section 4.09 and (b)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12;

 

(2)           the gross cash proceeds of that Sale
and Leaseback Transaction are at least equal to the fair market value, as
determined in good faith by the Board of Directors and set forth in an Officers’
Certificate delivered to the Trustee, of the property that is the subject of
that Sale and Leaseback Transaction; and

 

(3)           the transfer of assets in that Sale
and Leaseback Transaction is permitted by, and the Company applies the proceeds
of such transaction in compliance with, Section 4.10.

 

Section 4.18.          Covenant Termination.

 

If
at any time (a) the rating assigned to the Notes by at least two of
S&P, Moody’s or Fitch is an Investment Grade Rating and (b) no Default
has occurred and is continuing under this Indenture, the Company and its Restricted
Subsidiaries will no longer be subject to the provisions of Sections 3.10,
4.07, 4.08, 4.09, 4.10, 4.11, 4.16, 4.17(1)(a), 4.17(2), 4.17(3), 4.19 and
clause (3) of Section 5.01 of this Indenture.  However, the Company and its Restricted
Subsidiaries will remain subject to all of the other provisions of this
Indenture.

 

53

 

Section 4.19.          Designation of Restricted and
Unrestricted Subsidiaries.

 

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

 

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

 

ARTICLE 5

SUCCESSORS

 

Section 5.01           Merger, Consolidation, or Sale of Assets.

 

Neither of the Issuers will consolidate or merge with or into any
Person, or sell, convey, lease or otherwise dispose of all or substantially all
of its assets to any Person, unless:

 

(1)           the Person formed by
or surviving such consolidation or merger (if other than such Issuer), or to
which such sale, lease, conveyance or other disposition shall be made
(collectively, the “Successor”),
is a corporation, limited liability company or limited partnership organized
and existing under the laws of the United States or any state thereof or the
District of Columbia, or Canada or any province thereof, and the Successor
assumes by supplemental indenture in a form satisfactory to the Trustee all of
the obligations of the Company under the Indenture and under the Notes; provided, that Finance Corp may not merge
or consolidate with or into a Person other than a corporation satisfying such
requirement so long as the Company is not a corporation;

 

(2)           immediately before
and after giving effect to such transaction, no Event of Default shall have
occurred and be continuing; and

 

(3)           either:

 

(A) immediately after giving effect to such transaction on a pro forma
basis and any related financing transactions as if the same had occurred at the
beginning of the applicable

 

54

 

four quarter
period, the Fixed Charge Coverage Ratio is equal to or greater than the Fixed
Charge Coverage Ratio immediately before such transaction;

 

(B) immediately after giving effect to such transaction on a pro forma
basis, the Company (or the Successor) would be able to incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to the
first paragraph of Section 4.09; or

 

(C) immediately after giving effect to such transaction on a pro forma
basis the Consolidated Net Worth of the Company (or the Successor) shall not be
less than the Consolidated Net Worth of the Company immediately prior to such
transaction.

 

Notwithstanding the
preceding paragraph of this Section 5.01, the Issuers are permitted to
reorganize as any other form of entity in accordance with the following
procedures provided that:

 

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

 

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

 

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

 

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

 

(5)           such reorganization is not materially
adverse to the Holders or Beneficial Owners of the Notes (for purposes of this
clause (5) a reorganization will not be considered materially adverse to the
Holders or Beneficial Owners of the Notes solely because the successor or
survivor of such reorganization (a) is subject to federal or state income
taxation as an entity or (b) is considered to be an “includable corporation” of
an affiliated group of corporations with the meaning of Section 1504(b)(i) of
the Code or any similar state or local law).

 

Section 5.02           Successor Substituted.

 

Upon
any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the properties
or assets of an Issuer in accordance with Section 5.01 hereof, the successor
formed by such consolidation or into or with which such Issuer is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition
is made shall succeed to, and may exercise every right and power of, such
Issuer under this Indenture with the same effect as if such successor had been
named as such Issuer herein and shall be substituted for such Issuer (so that
from and after the date of such

 

55

 

consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition, the
provisions of this Indenture referring to the “Company” or “Finance Corp.,” as
the case may be, shall refer instead to the successor and not to the Company or
Finance Corp., as the case may be); and thereafter, if an Issuer is dissolved
following a transfer of all or substantially all of its properties or assets in
accordance with this Indenture, it shall be discharged and released from all
obligations and covenants under this Indenture and the Notes.  The Trustee shall enter into a supplemental
indenture to evidence the succession and substitution of such successor and
such discharge and release of such Issuer.

 

ARTICLE 6

DEFAULTS AND REMEDIES

 

Section 6.01           Events of Default.

 

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

 

(a)                                  default for 30 days in the
payment when due of interest on the Notes;

 

(b)                                 default in payment when due of
the principal of, or premium, if any, on the Notes;

 

(c)                                  failure by the Company to comply
with the provisions of Section 3.10, 4.10, 4.15 or 5.01
hereof; or

 

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

 

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

 

(i)            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
(a “Payment Default”); or

 

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

 

56

 

and, in each case, the principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $30.0 million or more; provided that
if any such default is cured or waived or any such acceleration rescinded, or
such Indebtedness is repaid, within a period of 30 days from the continuation
of such default beyond the applicable grace period or the occurrence of such acceleration,
as the case may be, such Event of Default and any consequential acceleration of
the Notes shall be automatically rescinded, so long as such rescission does not
conflict with any judgment or decree;

 

(f)                                    failure by the Company or any of
its Restricted Subsidiaries to pay final judgments aggregating in excess of
$30.0 million, which judgments are not paid, discharged or stayed for a period
of 60 days;

 

(g)                                 except as permitted by this
Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its Subsidiary Guarantee;

 

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

 

(i)            commences a
voluntary case,

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)           appoints a
Custodian of the Company, Finance Corp., any of the Company’s Restricted
Subsidiaries that is a Significant Subsidiary of the

 

57

 

Company or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary of the Company or for all or substantially all of the
property of the Company, Finance Corp., any of the Company’s Restricted
Subsidiaries that is a Significant Subsidiary of the Company or any group of
Restricted Subsidiaries of the Company, that, taken together, would constitute
a Significant Subsidiary of the Company; or

 

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

 

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

 

Section 6.02.          Acceleration.

 

If any Event of Default occurs and is
continuing, the Trustee, by notice to the Issuers, or the Holders of at least
25% in principal amount of the then outstanding Notes, by notice to the Issuers
and the Trustee, may declare all the Notes to be due and payable
immediately.  Upon any such declaration,
the Notes shall become due and payable immediately, together with all accrued
and unpaid interest, Additional Interest, if any, and premium, if any,
thereon.  Notwithstanding the preceding,
if an Event of Default specified in clause (h) or (i) of Section 6.01
hereof occurs with respect to the Company, Finance Corp., any of the Company’s
Restricted Subsidiaries that is a Significant Subsidiary of the Company or any
group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary of the Company, all outstanding Notes shall
become due and payable without further action or notice, together with all
accrued and unpaid interest, Additional Interest, if any, and premium, if any,
thereon.  The Holders of a majority in
principal amount of the then outstanding Notes by notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except with respect to nonpayment of principal,
interest, premium or Additional Interest, if any, that have become due solely
because of the acceleration) have been cured or waived.

 

Section 6.03.          Other Remedies.

 

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

 

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

 

58

 

Section 6.04.          Waiver of Past Defaults.

 

Holders of a majority in principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of or premium, interest or Additional Interest, if
any, on the Notes (including in connection with an offer to purchase).  Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.

 

Section 6.05.          Control by Majority.

 

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

 

Section 6.06.          Limitation on Suits.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

Section 6.08.          Collection Suit by
Trustee.

 

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

 

Section 6.09.          Trustee May File
Proofs of Claim.

 

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

 

Section 6.10.          Priorities.

 

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

 

60

 

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

 

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

 

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

 

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

 

Section 6.11.          Undertaking for Costs.

 

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

 

ARTICLE 7

TRUSTEE

 

Section 7.01.          Duties of Trustee.

 

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

 

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

 

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

 

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

 

61

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.02.          Rights of Trustee.

 

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

 

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

 

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

 

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

 

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

 

(f)            The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders unless such Holder

 

62

 

shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.

 

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

 

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

 

Section 7.03.          Individual Rights of
Trustee.

 

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

 

Section 7.04.          Trustee’s Disclaimer.

 

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

 

Section 7.05.          Notice of Defaults.

 

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

 

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

 

Within 60 days after each May 15
beginning with the May 15 following the date of this Indenture, and for so
long as Notes remain outstanding, the Trustee shall mail to the Holders of the
Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but
if no event described in TIA § 313(a) has occurred within the twelve
months preceding the reporting

 

63

 

date, no report need be transmitted).  The Trustee also shall comply with TIA § 313(b)(2) and
§ 313(b)(1).  The Trustee shall also
transmit by mail all reports as required by TIA § 313(c).

 

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

 

Section 7.07.          Compensation and
Indemnity.

 

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

 

The Issuers and the Guarantors shall
indemnify the Trustee, jointly and severally, against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Issuers and the
Guarantors (including this Section 7.07) and defending itself against any
claim (whether asserted by an Issuer, any Guarantor or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence, bad faith or willful
misconduct.  The Trustee shall notify the
Issuers and the Guarantors promptly of any claim for which it may seek
indemnity.  Failure by the Trustee to so
notify the Issuers and the Guarantors shall not relieve the Issuers or the
Guarantors of their obligations hereunder. 
The Issuers and the Guarantors shall defend the claim and the Trustee
shall cooperate in the defense.  The
Trustee may have separate counsel and the Issuers and the Guarantors shall pay
the reasonable fees and expenses of such counsel; provided
that the Issuers and the Guarantors will not be required to pay such fees and
expenses if they assume the Trustee’s defense with counsel acceptable to and
approved by the Trustee (such approval not to be unreasonably withheld) and
there is no conflict of interest between the Issuers and the Trustee in
connection with such defense.  The
Issuers and the Guarantors need not pay for any settlement made without their
consent, which consent shall not be unreasonably withheld.  Neither the Issuers nor the Guarantors need
reimburse the Trustee for any expense or indemnity against any liability or
loss of the Trustee to the extent such expense, liability or loss is
attributable to the negligence, bad faith or willful misconduct of the Trustee.

 

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

 

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

 

64

 

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

 

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

 

Section 7.08.          Replacement of Trustee.

 

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

 

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

 

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

 

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

 

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

 

(d)           the Trustee becomes incapable of
acting.

 

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

 

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

 

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

 

A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the Issuers.  Thereupon, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the

 

65

 

Trustee under this Indenture.  The successor Trustee shall mail a notice of
its succession to Holders of the Notes. 
The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof.  Notwithstanding replacement of
the Trustee pursuant to this Section 7.08, the Issuers’ and the Guarantors’
obligations under Section 7.07 hereof shall continue for the benefit of
the retiring Trustee.

 

Section 7.09.          Successor Trustee by
Merger, etc.

 

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

 

Section 7.10.          Eligibility;
Disqualification.

 

There shall at all times be a Trustee
hereunder that is a corporation organized and doing business under the laws of
the United States of America or of any state thereof that is authorized under
such laws to exercise corporate trustee power, that is subject to supervision
or examination by federal or state authorities and that has a combined capital
and surplus of at least $100 million as set forth in its most recent published
annual report of condition.

 

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

 

Section 7.11.          Preferential Collection
of Claims Against Issuers.

 

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

 

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

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

 

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

 

Section 8.02.          Legal Defeasance and
Discharge.

 

Upon the Issuers’ exercise under Section 8.01
hereof of the option applicable to this Section 8.02, the Issuers shall,
subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have discharged their obligations with respect to the
Notes and this Indenture, and each Guarantor shall be deemed to have discharged
its obligations with respect to its Subsidiary Guarantee, on the date the
conditions set forth in Section 8.04 below are satisfied

 

66

 

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

 

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

 

Section 8.03.          Covenant Defeasance.

 

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

 

67

 

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

 

Section 8.04.          Conditions to Legal or
Covenant Defeasance.

 

In order to exercise either Legal Defeasance
or Covenant Defeasance:

 

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

 

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

 

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

 

(2)           since the Initial Issuance Date,
there has been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance and will
be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Legal Defeasance had not
occurred;

 

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

 

(d)           no Default or Event of Default shall
have occurred and be continuing on the date of such deposit (other than a
Default or Event of Default resulting from the borrowing of funds to be applied
to such deposit) or insofar as Events of Default described in clause (h) or
(i) of Section 6.01 are concerned, at any time in the period ending
on the 91st day after the day of deposit;

 

(e)           such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a default
under, any material agreement or instrument (other

 

68

 

than this Indenture) to which the Company or any of its Restricted
Subsidiaries is a party or by which the Company or any of its Restricted
Subsidiaries is bound;

 

(f)            the Issuers must have delivered to
the Trustee an Opinion of Counsel (which may be based on such solvency
certificates or solvency opinions as counsel deems necessary or appropriate) to
the effect that after the 91st day following the deposit, the trust funds will
not be subject to the effect of Section 547 of the United States
Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law or
any comparable provision of applicable law;

 

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

 

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

 

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

 

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

 

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

 

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

 

69

 

Section 8.06.          Repayment to Issuers.

 

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

 

Section 8.07.          Reinstatement.

 

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

 

Section 8.08.          Discharge.

 

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

 

(1)           either:

 

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

 

70

 

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

 

(2)           no
Default or Event of Default has occurred and is continuing on the date of the
deposit or will occur as a result of the deposit and the deposit will not
result in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;

 

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

 

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

 

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

 

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01.          Without Consent of
Holders of Notes.

 

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

 

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

 

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

 

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

 

(d)           to make any change that would provide
any additional rights or benefits to the Holders of the Notes or surrender any
right or power conferred upon the Issuers or the Subsidiary Guarantors by the
Indenture that does not adversely affect the legal rights

 

71

 

hereunder of any Holder, provided that any change to conform this
Indenture to the Offering Memorandum shall not be deemed to adversely affect
the legal rights hereunder of any Holder;

 

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

 

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

 

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

 

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

 

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

 

(j)            provide for the issuance of exchange
securities which shall have terms substantially identical in all respects to
the Notes (except that transfer restrictions contained in the Notes shall be
modified or eliminated as appropriate) and which shall be treated, together
with any outstanding notes, as a single class of securities.

 

Upon the request of the Company accompanied
by a resolution of the Board of Directors of the General Partner authorizing
the execution of any such amended or supplemental indenture, and upon receipt
by the Trustee of the documents described in Section 7.02 hereof, the
Trustee shall join with the Issuers and the Guarantors in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.

 

Section 9.02.          With Consent of Holders
of Notes.

 

Except as provided above in Section 9.01
and below in this Section 9.02, the Issuers, the Guarantors and the
Trustee may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default or compliance with any provision of this Indenture, the Notes or any
other agreement or documents delivered to the Trustee pursuant to the terms of
this Indenture, may be waived with the consent of the Holders of a majority in
principal amount of the Notes outstanding (including consents obtained in
connection with a purchase of, tender offer or exchange offer for Notes).

 

72

 

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

 

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

 

After an amendment, supplement or waiver
under this Section becomes effective, the Company shall mail to the
Holders of Notes affected thereby a notice briefly describing the amendment,
supplement or waiver.  Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental Indenture
or waiver.  Subject to Sections 6.04 and
6.07 hereof and to the last paragraph of this Section 9.02, the Holders of
a majority in principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Issuers with any provision of this
Indenture or the Notes.  However, without
the consent of each Holder affected, an amendment, supplement or waiver may not
(with respect to any Notes held by a non-consenting Holder):

 

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

 

(b)           reduce
the principal of or change the fixed maturity of any Note or alter any of the
provisions with respect to the redemption or repurchase of the Notes (except as
provided in Sections 3.10, 4.10 and 4.15 hereof);

 

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

 

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

 

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

 

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

 

(g)           waive
a redemption or repurchase payment with respect to any Note (other than a
payment required by Sections 3.10, 4.10 and 4.15 hereof);

 

73

 

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

 

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

 

Section 9.03.          Compliance with Trust
Indenture Act.

 

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

 

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

 

Section 9.04.          Revocation and Effect of
Consents.

 

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

 

The Company may, but shall not be obligated
to, fix a record date for the purpose of determining the Holders entitled to
consent to any amendment, supplement or waiver. 
If a record date is fixed, then notwithstanding the last sentence of 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 consent to such amendment or waiver or revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date.  No consent shall be valid
or effective for more than 90 days after such record date except to the extent
that the requisite number of consents to the amendment, supplement or waiver
have been obtained within such 90-day period or as set forth in the next
paragraph of this Section 9.04.

 

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

 

Section 9.05.          Notation on or Exchange
of Notes.

 

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

 

74

 

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

 

Section 9.06.          Trustee to Sign Amendments,
etc.

 

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

 

ARTICLE 10

GUARANTEES OF NOTES

 

Section 10.01.        Subsidiary Guarantees.

 

Subject to this Article 10, each of the
Guarantors hereby, jointly and severally, unconditionally guarantee, on a
senior unsecured basis, to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, irrespective of
the validity and enforceability of this Indenture, the Notes held thereby and
the Obligations of the Issuers hereunder and thereunder, that: (a) the
principal of and premium, interest and Additional Interest, if any, on the
Notes will be promptly paid in full when due, subject to any applicable grace
period, whether at Stated Maturity, by acceleration, upon repurchase or
redemption or otherwise, and interest on the overdue principal of and premium,
(to the extent permitted by law) interest and Additional Interest, if any, on
the Notes, and all other payment Obligations of the Issuers to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full and
performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or any of such
other Obligations, the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, subject to any
applicable grace period, whether at Stated Maturity, by acceleration, upon
repurchase or redemption or otherwise. 
Failing payment when so due of any amount so guaranteed for whatever
reason, the Guarantors will be jointly and severally obligated to pay the same
immediately.  An Event of Default under
this Indenture or the Notes shall constitute an event of default under the
Subsidiary Guarantees, and shall entitle the Holders to accelerate the
obligations of the Guarantors hereunder in the same manner and to the same
extent as the Obligations of the Issuers.

 

The Guarantors hereby agree that their
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder with respect to
any provisions hereof or thereof, the recovery of any judgment against an Issuer,
any action to enforce the same or any other circumstance (other than complete
performance) which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor.  Each Guarantor
further, to the extent permitted by law, hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of an Issuer, any right to require a proceeding first against an
Issuer, protest, notice and all demands whatsoever

 

75

 

and covenants that its Subsidiary Guarantee
will not be discharged except by complete performance of the Obligations
contained in the Notes and this Indenture.

 

If any Holder or the Trustee is required by
any court or otherwise to return to an Issuer, the Guarantors, or any
Custodian, Trustee or other similar official acting in relation to any of the
Issuers or the Guarantors, any amount paid by an Issuer or any Guarantor to the
Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore
discharged, shall be reinstated in full force and effect.  Each Guarantor agrees that it shall not be
entitled to, and hereby waives, any right of subrogation in relation to the
Holders in respect of any Obligations guaranteed hereby.

 

Each Guarantor further agrees that, as
between the Guarantors, on the one hand, and the Holders and the Trustee, on
the other hand, (a) the maturity of the Obligations guaranteed hereby may
be accelerated as provided in Article 6 hereof for the purposes of its
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed thereby,
and (b) in the event of any declaration of acceleration of such
Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantor
for the purpose of its Subsidiary Guarantee. 
The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Subsidiary Guarantees.

 

Section 10.02.        Guarantors May Consolidate,
etc., on Certain Terms.

 

(a)           No
Guarantor shall sell or otherwise dispose of all or substantially all of its
properties or assets to, or consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person), another Person (other than the
Company or another Guarantor), unless, (i) either (1) the Person
acquiring the properties or assets in any such sale or other disposition or the
Person formed by or surviving any such consolidation or merger (if other than
such Guarantor) unconditionally assumes all the obligations of such Guarantor,
pursuant to a supplemental indenture, substantially in the form of Annex A
hereto, under the Notes, this Indenture and its Subsidiary Guarantee on terms
set forth therein, or (2) the Net Proceeds of such sale or other
disposition are applied in accordance with the provisions of Section 4.10,
and (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists.

 

(b)           In
the case of any such consolidation or merger and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and substantially in the form of Annex A hereto, of the Subsidiary
Guarantee and the due and punctual performance of all of the covenants of this
Indenture to be performed by the Guarantor, such successor Person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor.

 

Section 10.03.        Releases of Subsidiary
Guarantees.

 

The Subsidiary Guarantee of a Guarantor shall
be released:  (1) in connection with
any sale or other disposition of all or substantially all of the properties or
assets of such Guarantor (including by way of merger or consolidation) to a
Person that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the sale or other

 

76

 

disposition complies with Section 4.10; (2) in
connection with any sale or other disposition of all of the Capital Stock of
such Guarantor to a Person that is not (either before or after giving effect to
such transaction) a Restricted Subsidiary of the Company, if the sale or other
disposition complies with Section 4.10; (3) if the Company designates
any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in
accordance with the applicable provisions of this Indenture; (4) upon
Legal Defeasance or Covenant Defeasance or Discharge in accordance with Article 8;
(5) in the case of any Guarantor other than the Operating Company, at such
time as such Guarantor ceases to be required to guarantee any other
Indebtedness of either of the Issuers and any Indebtedness of the Operating
Company; or (6) in the case of the Operating Company, at such time as the
Operating Company ceases to guarantee any other Indebtedness of either of the
Issuers, provided that it is then no longer an obligor with respect to any
Indebtedness under any Credit Facility in excess of the De Minimis Guaranteed
Amount.

 

Upon delivery by the Company to the Trustee
of an Officers’ Certificate to the effect that any of the conditions described
in the foregoing clauses (1) – (6) has occurred, the Trustee shall
execute any documents reasonably requested by the Company in order to evidence
the release of any Guarantor from its obligations under its Subsidiary
Guarantee.  Any Guarantor not released
from its obligations under its Subsidiary Guarantee shall remain liable for the
full amount of principal of and premium, interest and Additional Interest, if
any, on the Notes and for the other obligations of such Guarantor under this Indenture
as provided in this Article 10.

 

Section 10.04.        Limitation on Guarantor
Liability.

 

The obligations of each Guarantor under its
Subsidiary Guarantee will be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations
under this Indenture, result in the obligations of such Guarantor under its
Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law and not otherwise being void or voidable
under any similar laws affecting the rights of creditors generally.

 

Section 10.05.        “Trustee” to Include
Paying Agent.

 

In case at any time any Paying Agent other
than the Trustee shall have been appointed and be then acting hereunder, the
term “Trustee” as used in this Article 10
shall in each case (unless the context shall otherwise require) be construed as
extending to and including such Paying Agent within its meaning as fully and
for all intents and purposes as if such Paying Agent were named in this Article 10
in place of the Trustee.

 

ARTICLE 11

MISCELLANEOUS

 

Section 11.01.        Trust Indenture Act
Controls.

 

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

 

77

 

Section 11.02.        Notices.

 

Any notice or communication by an Issuer, any
Guarantor or the Trustee to the others is duly given if in writing (in the
English language) and delivered in person or mailed by first class mail (registered
or certified, return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the others’ address:

 

If to any of the Issuers or the Guarantors:

 

Pacific Energy Partners, L.P.

5900 Cherry Avenue

Long Beach, California 90805-4405

Attention: Chief Financial Officer

Fax No.:  (562)
728-2823

 

with a copy
to:

 

Vinson &
Elkins L.L.P.

666 Fifth
Avenue

26th
Floor

New York, New
York 10109

Attention:  Alan P. Baden

Fax No.: (212)
237-0100

 

If to the Trustee:

 

Wells Fargo Bank, National Association

707 Wilshire Blvd.

17th Floor

Los Angeles, CA 90017

Attention:  Corporate Trust Department

Fax No.:  (213)
614-3355

 

An Issuer, any of the Guarantors or the
Trustee, by notice to the others, may designate additional or different
addresses for subsequent notices or communications.

 

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

 

Any notice or communication to a Holder shall
be mailed by first class mail, certified or registered, return receipt
requested, or by overnight air courier guaranteeing next day delivery to its
address shown on the register kept by the Registrar.  Any notice or communication shall also be so
mailed to any Person described in TIA § 313(c), to the extent required by
the TIA.  Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.

 

78

 

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

 

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

 

Section 11.03.        Communication by Holders
of Notes with Other Holders of Notes.

 

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

 

Section 11.04.        Certificate and Opinion as
to Conditions Precedent.

 

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

 

(a)           an Officers’ Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and

 

(b)           an Opinion of Counsel in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the opinion
of such counsel, all such conditions precedent and covenants have been
satisfied.

 

Section 11.05.        Statements Required in
Certificate or Opinion.

 

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

 

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

 

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

 

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

 

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

 

79

 

Section 11.06.        Rules by Trustee and
Agents.

 

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

 

Section 11.07.        No Personal Liability of
Directors, Officers, Employees and Unitholders.

 

No past, present or future director, officer,
partner, member, employee, incorporator, manager or unitholder or other owner
of Equity Interest of the Issuers, the General Partner, or any Guarantor, as
such, will have any liability for any obligations of the Issuers or any
Guarantor under the Notes, this Indenture or the Subsidiary Guarantees, or for
any claim based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder by accepting a
Note waives and releases all such liability. 
The waiver and release are part of the consideration for issuance of the
Notes.  The waiver may not be effective
to waive liabilities under the federal securities laws.

 

Section 11.08.        Governing Law.

 

THIS INDENTURE,
THE NOTES AND THE SUBSIDIARY GUARANTEES WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

Section 11.09.        No Adverse Interpretation
of Other Agreements.

 

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

 

Section 11.10.        Successors.

 

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

 

Section 11.11.        Severability.

 

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

 

Section 11.12.        Table of Contents,
Headings, etc.

 

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

 

80

 

Section 11.13.        Counterparts.

 

This Indenture may be signed in counterparts
and by the different parties hereto in separate counterparts, each of which
shall constitute an original and all of which together shall constitute one and
the same instrument.

 

[Signatures on following page]

 

81

 

	
   

  	
  SIGNATURES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PACIFIC ENERGY PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Management LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice
  President,

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC ENERGY FINANCE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  	
   

  
	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice President,

  
	
   

  	
   

  	
  Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC ATLANTIC TERMINALS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Group LLC, its sole member

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Partners, L.P., its sole member

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy GP, LP, its general partner

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Management LLC, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  
	
   

  	
   

  	
  Gerald A. Tywoniuk

  
	
   

  	
   

  	
  Senior
  Vice President,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC ENERGY GROUP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Partners, L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Pacific Energy GP, LP,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Pacific Energy Management LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  	
   

  
	
   

  	
  Gerald A. Tywoniuk, Senior Vice President,

  
	
   

  	
   

  	
  Chief Financial Officer
  and Treasurer

  
										

 

82

 

	
   

  	
  PEG CANADA GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Partners, L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Management LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice
  President,

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  PEG CANADA, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PEG Canada GP LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice
  President,

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  ROCKY MOUNTAIN PIPELINE SYSTEM LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Group LLC,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   Pacific Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Management LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice

  
	
   

  	
   

  	
   

  	
   

  	
  President, Chief Financial Officer and

  Treasurer

  
										

 

83

 

	
   

  	
  RANCH PIPELINE LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Group LLC,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   Pacific Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   Pacific Energy GP, LP,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Management LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice

  
	
   

  	
   

  	
   

  	
  President, Chief Financial Officer and

  
	
   

  	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC MARKETING AND

  
	
   

  	
  TRANSPORTATION LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Group LLC,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   Pacific Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   Pacific Energy Management LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gerald A. Tywoniuk

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice

  
	
   

  	
   

  	
   

  	
  President, Chief Financial Officer and

  
	
   

  	
   

  	
   

  	
  Treasurer

  
													

 

84

 

	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Maddy Hall

  	
   

  
	
   

  	
  Name:

  	
  Maddy Hall

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
						

 

85

 

RULE 144A/REGULATION S APPENDIX

 

PROVISIONS RELATING TO INITIAL
NOTES,

PRIVATE EXCHANGE NOTES

AND EXCHANGE NOTES

 

1.                                       Definitions

 

1.1                                 Definitions.

 

For the purposes of this Appendix the
following terms shall have the meanings indicated below:

 

“Depository” means The Depository Trust
Company, its nominees and their respective successors.

 

“Exchange Notes” means (1) the 6 1⁄4%
Senior Notes due 2015 issued pursuant to the Indenture in connection with a
Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional
Notes, if any, issued pursuant to a registration statement filed with the SEC
under the Act.

 

“Initial Notes” means (1) $175 million
aggregate principal amount of 6 1⁄4% Senior Notes due 2015 issued on the
Initial Issuance Date and (2) Additional Notes, if any, issued in a
transaction exempt from the registration requirements of the Securities Act.

 

“Initial Purchasers” means (1) with
respect to the Initial Notes issued on the Initial Issuance Date, Lehman
Brothers Inc., Banc of America Securities, L.L.C., Citigroup, BNP Paribas
Securities Corp. and Scotia Capital (USA) Inc., and (2) with respect to
each issuance of Additional Notes, the Persons purchasing such Additional Notes
under the related Purchase Agreement.

 

“Notes” means the Initial Notes, the
Additional Notes, the Exchange Notes and the Private Exchange Notes, treated as
a single class.

 

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

 

“Private Exchange” means the offer by the
Company, pursuant to a Registration Rights Agreement, to the Initial Purchasers
to issue and deliver to each Initial Purchaser, in exchange for the Initial
Notes held by the Initial Purchaser as part of its initial distribution, a like
aggregate principal amount of Private Exchange Notes.

 

“Private Exchange Notes” means any 6 1⁄4%
Senior Notes due 2015 issued in connection with a Private Exchange.

 

“Purchase Agreement” means (1) with
respect to the Initial Notes issued on the Initial Issuance Date, the Purchase
Agreement dated September 15, 2005 among the Issuers, the Guarantors and
the Initial Purchasers, and (2) with respect to each issuance of
Additional Notes,

 

1

 

the purchase
agreement or underwriting agreement among the Issuers and the Persons
purchasing such Additional Notes.

 

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

 

“Registered Exchange Offer” means the offer
by the Issuers, pursuant to a Registration Rights Agreement, to certain Holders
of Initial Notes, to issue and deliver to such Holders, in exchange for the
Initial Notes, a like aggregate principal amount of Exchange Notes registered
under the Securities Act.

 

“Registration Rights Agreement” means (1) with
respect to the Initial Notes issued on the Initial Issuance Date, the
Registration Rights Agreement dated September 23, 2005 among the Issuers,
the Guarantors and the Initial Purchasers, a form of which is attached to this
Indenture as Annex B, and (2) with respect to each issuance of Additional
Notes issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Issuers
and the Persons purchasing such Additional Notes under the related Purchase
Agreement.

 

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

 

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

 

“Transfer Restricted Securities” means Notes
that bear or are required to bear the legend set forth in Section 2.3(b) hereof.

 

1.2                                 Other
Definitions.

 

	
  Term

  	
   

  	
  Defined in Section:

  	
   

  
	
  “Agent
  Members”

  	
   

  	
  2.1(b)

  	
   

  
	
  “Distribution
  Compliance Period”

  	
   

  	
  2.1(b)

  	
   

  
	
  “Global
  Note”

  	
   

  	
  2.1(a)

  	
   

  
	
  “Regulation
  S”

  	
   

  	
  2.1(a)

  	
   

  
	
  “Regulation
  S Notes”

  	
   

  	
  2.1(a)

  	
   

  
	
  “Restricted
  Global Note”

  	
   

  	
  2.1(a)

  	
   

  
	
  “Rule 144A”

  	
   

  	
  2.1(a)

  	
   

  
	
  “Rule 144A
  Notes”

  	
   

  	
  2.1(a)

  	
   

  

 

2.                                       The
Notes.

 

2.1                                 (a) 
Form and Dating.  Initial
Notes offered and sold to QIBs in reliance on Rule 144A (“Rule 144A
Notes”) under the Securities Act (“Rule 144A”) or in reliance on
Regulation S (“Regulation S Notes”) under the Securities Act (“Regulation S”),
in each case as provided in a Purchase Agreement, and Private Exchange Notes,
as provided in a Registration

 

2

 

Rights Agreement, shall be
issued initially in the form of one or more permanent global Notes in
definitive, fully registered form without interest coupons with the global
Notes legend and restricted Notes legend set forth in Exhibit 1 hereto
(each, a “Restricted Global Note”), which shall be deposited on behalf of the
purchasers of the Initial Notes represented thereby with the Trustee, as
custodian for the Depository (or with such other custodian as the Depository
may direct), and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Issuers and authenticated by the Trustee as
hereinafter provided.  Beneficial
interests in a Restricted Global Note representing Initial Notes sold in
reliance on either Rule 144A or Regulation S may be held through
Euroclear or Clearstream, as indirect participants in the Depository.  The aggregate principal amount of the Global
Notes may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depository or its nominee as hereinafter
provided.  Exchange Notes shall be issued
in global form (with the global Notes legend set forth in Exhibit 1
hereto) or in certificated form as provided in Section 2.4 of this
Appendix.  Exchange Notes issued in
global form and Restricted Global Notes are sometimes referred to in this
Appendix as “Global Notes”.

 

(b)                                 Book-Entry
Provisions.  This Section 2.1(b) shall
apply only to a Global Note deposited with or on behalf of the Depository.

 

The Issuers
shall execute and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Notes that (a) shall
be registered in the name of the Depository for such Global Note or Global
Notes or the nominee of such Depository and (b) shall be delivered by the
Trustee to such Depository or pursuant to such Depository’s instructions or
held by the Trustee as custodian for the Depository.  If such Global Notes are Restricted Global
Notes, then separate Global Notes shall be issued to represent Rule 144A
Notes and Regulation S Notes so long as required by law or the Depository.

 

Members of, or
participants in, the Depository (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Note held on their behalf by the
Depository or by the Trustee as the custodian of the Depository or under such
Global Note, and the Issuers, the Trustee and any agent of the Issuers or the
Trustee shall be entitled to treat the Depository as the absolute owner of such
Global Note for all purposes whatsoever. 
Notwithstanding the foregoing, nothing herein shall prevent the Issuers,
the Trustee or any agent of the Issuers or the Trustee from giving effect to
any written certification, proxy or other authorization furnished by the
Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Note.

 

Until the 40th
day after the later of the commencement of the offering of any Initial Notes
and the original issue date of such Initial Notes (such period, the “Distribution
Compliance Period”), a beneficial interest in a Restricted Global Note
representing Regulation S Notes may be transferred to a Person who takes
delivery in the form of an interest in a Restricted Global Note representing Rule 144A
Notes only if the transferor first delivers to the Trustee a written
certificate (in the form provided in Exhibit 1 hereto) to the effect that
such transfer is being made to a Person who the transferor reasonably believes
is purchasing for its own account or accounts as to which it exercises sole
investment discretion and that such person is a QIB, in each case in a
transaction meeting the requirements of Rule 144A and in accordance with
any applicable securities laws of any state of the United States or any other
jurisdiction.  After the expiration of

 

3

 

the Distribution Compliance
Period, such certification requirements shall not apply to such transfers of
beneficial interests in a Restricted Global Note representing Regulation S
Notes.

 

Beneficial
interests in a Restricted Global Note representing Rule 144A Notes may be
transferred to a Person who takes delivery in the form of an interest in a Restricted
Global Note representing Regulation S Notes, whether before or after the
expiration of the Distribution Compliance Period, only if the transferor first
delivers to the Trustee a written certificate (in the form provided in Exhibit 1
hereto) to the effect that such transfer is being made in accordance with Rule 904
of Regulation S or Rule 144 (if available).

 

(c)                                  Certificated
Notes.  Except as provided in Section 2.3
or 2.4, owners of beneficial interests in Restricted Global Notes shall not be
entitled to receive physical delivery of certificated Notes.

 

2.2                                 Authentication.  The Trustee shall authenticate and
deliver:  (1) on the Initial
Issuance Date, an aggregate principal amount of $175 million 6 1⁄4% Senior
Notes due 2015, (2) any Additional Notes for an original issue in an
aggregate principal amount specified in the written order of the Issuers
pursuant to Section 2.02 of the Indenture and (3) Exchange Notes or
Private Exchange Notes for issue only in a Registered Exchange Offer or a
Private Exchange, respectively, pursuant to a Registration Rights Agreement,
for a like principal amount of Initial Notes, in each case upon a written order
of the Issuers.  Such order shall specify
the amount of the Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated and, in the case of any issuance of
Additional Notes pursuant to Section 2.13 of the Indenture, shall certify
that such issuance is in compliance with Section 4.09 of the Indenture.

 

2.3                                 Transfer
and Exchange.

 

(a)                                  Transfer
and Exchange of Global Notes.  (i) 
The transfer and exchange of Global Notes or beneficial interests therein shall
be effected through the Depository, in accordance with this Indenture
(including applicable restrictions on transfer set forth herein, if any) and
the procedures of the Depository therefor. 
A transferor of a beneficial interest in a Global Note shall deliver to
the Registrar a written order given in accordance with the Depository’s
procedures containing information regarding the participant account of the
Depository to be credited with a beneficial interest in the Global Note.  The Registrar shall, in accordance with such
instructions instruct the Depository to credit to the account of the Person
specified in such instructions a beneficial interest in the Global Note and to
debit the account of the Person making the transfer the beneficial interest in
the Global Note being transferred.

 

(ii)                                  Notwithstanding
any other provisions of this Appendix, a Global Note may not be transferred as
a whole except by the Depository to a nominee of the Depository or by a nominee
of the Depository to the Depository or another nominee of the Depository or by
the Depository or any such nominee to a successor Depository or a nominee of
such successor Depository.

 

(iii)                               In
the event that a Restricted Global Note is exchanged for Notes in certificated
form pursuant to Section 2.4 of this Appendix, prior to the consummation
of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement
with respect to such Notes, such Notes may be exchanged only in accordance with
such procedures as are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of the
Initial Notes

 

4

 

intended to
ensure that such transfers comply with Rule 144A or Regulation S, as
the case may be) and such other procedures as may from time to time be adopted
by the Company.

 

(b)                                 Legend.

 

(i)                                     Except
as permitted by the following paragraphs (ii), (iii) and (iv), each Note
certificate evidencing the Restricted Global Notes (and all Notes issued in
exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:

 

THIS NOTE (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.

 

THE HOLDER OF THIS NOTE
AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) THIS NOTE MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO AN ISSUER, (II)
IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF
CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS NOTE FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

(ii)                                  Upon
any sale or transfer of a Transfer Restricted Security (including any Transfer
Restricted Security represented by a Restricted Global Note) pursuant to Rule 144
under the Securities Act, the Registrar shall permit the transferee thereof to
exchange such Transfer Restricted Security for a certificated Note that does
not bear the legend set forth above and rescind any restriction on the transfer
of such Transfer Restricted Security, if the transferor thereof certifies in
writing to the Registrar that such sale or transfer was made in reliance on Rule 144
(such certification to be in the form set forth on the reverse of the Note).

 

5

 

(iii)                               After
a transfer of any Initial Notes or Private Exchange Notes pursuant to and
during the period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Notes or Private Exchange Notes, as the case may be,
all requirements pertaining to legends on such Initial Note or such Private
Exchange Note will cease to apply, the requirements requiring any such Initial
Note or such Private Exchange Note issued to certain Holders be issued in
global form will cease to apply, and a certificated Initial Note or Private
Exchange Note or an Initial Note or Private Exchange Note in global form, in
each case without restrictive transfer legends, will be available to the
transferee of the Holder of such Initial Notes or Private Exchange Notes upon
exchange of such transferring Holder’s certificated Initial Note or Private
Exchange Note or directions to transfer such Holder’s interest in the Global
Note, as applicable.

 

(iv)                              Upon
the consummation of a Registered Exchange Offer with respect to the Initial
Notes, all requirements pertaining to such Initial Notes that Initial Notes
issued to certain Holders be issued in global form will still apply with
respect to Holders of such Initial Notes that do not exchange their Initial
Notes, and Exchange Notes in certificated or global form will be available to
Holders that exchange such Initial Notes in such Registered Exchange Offer.

 

(v)                                 Upon
the consummation of a Private Exchange with respect to the Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will still apply with respect to
Holders of such Initial Notes that do not exchange their Initial Notes, and
Private Exchange Notes in global form with the global Notes legend and the
Restricted Notes legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Notes in such Private Exchange.

 

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

 

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

 

(i)                                     To
permit registrations of transfers and exchanges, the Issuers shall execute and
the Trustee shall authenticate certificated Notes and Global Notes at the
Registrar’s request.

 

(ii)                                  No
service charge shall be made for any registration of transfer or exchange, but
the Issuers may require payment of a sum sufficient to cover any transfer tax,
assessments or similar governmental charge payable in connection therewith
(other than any such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.06, 4.10, 4.15 and
9.05 and of the Indenture).

 

(iii)                               The
Registrar shall not be required to register the transfer of or exchange of any
Note or portion of a Note selected for redemption, except for the unredeemed

 

6

 

portion of any
Note being redeemed in part.  Also, it
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed.

 

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

 

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

 

(e)                                  No
Obligation of the Trustee.

 

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

 

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

 

2.4                                 Certificated
Notes.

 

(a)                                  A
Global Note deposited with the Depository or with the Trustee as custodian for
the Depository pursuant to Section 2.1 shall be transferred to the
beneficial owners thereof in the form of certificated Notes in an aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note, only if such transfer complies with Section 2.3 and (i) the
Depository notifies the Issuers that it is unwilling or unable to continue as
Depository for such Global Note or if at any time such Depository ceases to be
a “clearing agency” registered under the Exchange Act and in either event a
successor depositary is not appointed by

 

7

 

the Issuers within 90 days of
such notice, or (ii) an Event of Default has occurred and is continuing
and DTC notifies the Trustee of its decision to exchange the Global Notes.

 

(b)                                 Any
Global Note that is transferable to the beneficial owners thereof pursuant to
this Section shall be surrendered by the Depository or the Notes Custodian
to the Trustee located at its Corporate Trust Office to be so transferred, in
whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Note, an equal aggregate principal amount of certificated Notes of authorized
denominations.  Any portion of a Global
Note transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall
direct.  Any certificated Note or Private
Exchange Note delivered in exchange for an interest in the Global Note shall,
except as otherwise provided by Section 2.3(b), bear the restricted Notes
legend set forth in Exhibit 1 hereto.

 

(c)                                  Subject
to the provisions of Section 2.4(b), the Holder of a Global Note shall be
entitled to grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or the Notes.

 

(d)                                 In
the event of the occurrence of any of the events specified in Section 2.4(a),
the Issuers shall promptly make available to the Trustee a reasonable supply of
certificated Notes in definitive, fully registered form without interest
coupons.

 

8

 

EXHIBIT 1
TO RULE 144A/REGULATION S APPENDIX

 

[FORM OF FACE OF INITIAL
NOTE]

 

[Global Notes Legend]

 

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

 

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

 

[Restricted Notes Legend]

 

THIS NOTE (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.

 

THE HOLDER OF
THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) THIS NOTE MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO AN ISSUER, (II)
IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF
CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES

 

1

 

LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

 

2

 

PACIFIC
ENERGY PARTNERS, L.P.

 

PACIFIC
ENERGY FINANCE CORPORATION

 

	
   

  	
   

  	
  CUSIP No.

  	
   

  
	
   

  	
   

  	
  ISIN No.

  	
   

  
	
   

  	
   

  	
   

  
	
  No.

  	
   

  	
  $

  

 

6 1⁄4% Senior Note due 2015

 

Pacific Energy
Partners, L.P., a Delaware limited partnership, and Pacific Energy Finance
Corporation, a Delaware corporation, jointly and severally promise to pay to                    ,
or registered assigns, the principal sum of              
Dollars on September 15, 2015 [or such greater or lesser amount as may be
indicated on Schedule A hereto].(1)

 

Interest
Payment Dates:  March 15 and September 15.

 

Record
Dates:  March 1 and September 1.

 

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

 

	
   

  	
  PACIFIC ENERGY
  PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific
  Energy GP, LP,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific
  Energy Management LLC,

  
	
   

  	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A.
  Tywoniuk, Senior

  
	
   

  	
   

  	
   

  	
  Vice
  President, Chief Financial Officer

  
	
   

  	
   

  	
   

  	
  and
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC
  ENERGY FINANCE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

(1) If this Note is a
Global Note, add this provision.

 

3

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

 

 

WELLS FARGO BANK, NATIONAL
ASSOCIATION

as Trustee,
certifies that

this is one of
the Notes

referred to in
the Indenture.

 

	
  By

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  
	
  Dated:

  

 

4

 

[FORM OF REVERSE SIDE OF
INITIAL NOTE]

 

6 1⁄4% Senior Note due 2015

 

Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.

 

1.                                       Interest.  Pacific Energy Partners, L.P., a Delaware
limited partnership (the “Company”), and Pacific Energy Finance Corporation, a
Delaware corporation (the “Finance Corp.” and, together with the Company, the “Issuers”),
jointly and severally promise to pay interest on the principal amount of this
Note at 6 1⁄4% per annum from September 23, 2005 until maturity and
shall pay the Additional Interest payable pursuant to Section 6 of the
Registration Rights Agreement referred to below.  The Issuers will pay interest and Additional
Interest, if any, semi-annually in arrears on March 15 and September 15
of each year, commencing March 15, 2006, or if any such day is not a
Business Day, on the next succeeding Business Day (each an “Interest Payment
Date”).  Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance; provided that if
there is no existing Default or Event of Default in the payment of interest,
and if this Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue
from such next succeeding Interest Payment Date, except in the case of the
original issuance of Notes, in which case interest shall accrue from the date
of authentication.  The Issuers shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Additional Interest (without regard to
any applicable grace periods) from time to time on demand at the same rate to
the extent lawful.  Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

 

2.                                       Method
of Payment.  The Issuers will pay
interest on the Notes (except defaulted interest) and Additional Interest to
the Persons who are registered Holders of Notes at the close of business on March 1
or September 1 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.11 of the Indenture with
respect to defaulted interest.  Holders
must surrender Notes to the Paying Agent to collect payments of principal and
premium, if any, together with accrued and unpaid interest and Additional
Interest, if any, due at maturity.  The
Notes will be payable as to principal, premium, if any, interest and Additional
Interest, if any, at the office or agency of the Issuers maintained for such
purpose within the City and State of New York, or, at the option of the
Issuers, payment of interest and Additional Interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to any amounts due on all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to
the Issuers or the Paying Agent.  Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

 

3.                                       Paying
Agent and Registrar.  Initially, Wells
Fargo Bank, National Association, the Trustee under the Indenture, will act as
Paying Agent and Registrar.  The

 

5

 

Company may change
any Paying Agent or Registrar without notice to any Holder.  The Company or any of its Subsidiaries may
act in any such capacity.

 

4.                                       Indenture.  The Issuers issued the Notes under an
Indenture dated as of September 23, 2005 (“Indenture”)
among the Issuers, the Guarantors and the Trustee.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms.  The Notes are unsecured senior
obligations of the Issuers limited to $175,000,000 aggregate principal amount
in the case of Notes issued on the Initial Issuance Date (as defined in the Indenture).

 

5.                                       Optional
Redemption.

 

(a)                                  Except as set forth in subparagraph (b) or
(c) of this Paragraph 5, the Issuers shall not have the option to redeem
the Notes prior to September 15, 2010. 
On or after September 15, 2010, the Issuers shall have the option
to redeem the Notes, in whole or in part, upon not less than 30 nor more than
60 days’ notice as set forth in Paragraph 8, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest and Additional Interest, 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 twelve-month period
beginning on September 15 of the years indicated below:

 

	
  YEAR

  	
   

  	
  PERCENTAGE

  	
   

  
	
  2010

  	
   

  	
  103.125

  	
  %

  
	
  2011

  	
   

  	
  102.083

  	
  %

  
	
  2012

  	
   

  	
  101.042

  	
  %

  
	
  2013 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 Notwithstanding the provisions of
subparagraph (a) of this Paragraph 5, at any time on or prior to September 15,
2008, the Company may on any one or more occasions redeem up to 35% of the
aggregate principal amount of Notes (including any Additional Notes) issued
under the Indenture at a redemption price of 106.25% of the principal amount
thereof, plus accrued and unpaid interest and Additional Interest, if any,
thereon to the redemption date (subject to the right of Holders of record on
the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the redemption date), with the net cash proceeds of one
or more Equity Offerings by the Company; provided that (i) at least 65% of
the aggregate principal amount of Notes (including any Additional Notes) issued
under the Indenture remains outstanding immediately after the occurrence of each
such redemption (excluding any Notes held by the Company and its Subsidiaries)
and (ii) each such redemption occurs within 120 days of the date of
the closing of each such Equity Offering.

 

(c)                                  At any time prior to September 15,
2010, the Issuers may, at their option, redeem all or any portion of the Notes
at the Make-Whole Price plus accrued and unpaid interest to the date of
redemption.

 

6

 

6.                                       Special
Mandatory Redemption

 

If the Issuers have not consummated the acquisition of
at least two of the three asset packages that comprise the Valero Assets on or
before the day that is 120 days after the closing of the Notes, then the
Issuers will, on a day not more than 30 business days after such date (“the “Deadline”),
or such earlier date determined by the Issuers and permitted by applicable law
(such date, the “Special Mandatory Redemption Date”), redeem all of the notes
at a redemption price equal to 99.545% of the principal amount of the notes,
plus accrued and unpaid interest.  Notice
of a special mandatory redemption prior to the Deadline will be mailed promptly
to each Holder of Notes at its registered address, and the Trustee.  On the Special Mandatory Redemption Date, the
Company shall pay to a paying agent for payment to each Holder of Notes the
redemption price for such Holder’s notes.

 

7.                                       Mandatory
Redemption.

 

Except as set forth in Paragraph 6 above and
Paragraph 8 below, neither of the Issuers shall be required to make mandatory
redemption or sinking fund payments with respect to the Notes or to repurchase
the Notes at the option of the Holders.

 

8.                                       Repurchase
at Option of Holder.

 

(a)               Within 30 days following the
occurrence of a Change of Control, the Company shall make an offer (a “Change
of Control Offer”) to repurchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of each Holder’s Notes at a purchase price equal
to 101% of the aggregate principal amount of Notes repurchased, plus accrued
and unpaid interest and Additional Interest, if any, to the date of purchase
(the “Change of Control Purchase Date”), subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest
Payment Date that is on or prior to the Change of Control Purchase Date.  Within 30 days following a Change of Control,
the Company shall mail a notice of the Change of Control Offer to each Holder
and the Trustee describing the transaction that constitutes the Change of
Control and setting forth the procedures governing the Change of Control Offer
as required by Section 4.15 of the Indenture.

 

(b)              On the 366th day after an
Asset Sale, if the aggregate amount of Excess Proceeds then exceeds $30.0
million, the Company shall commence an offer to all Holders of Notes (an “Asset
Sale Offer”) pursuant to Section 3.10 of the Indenture, and to all holders
of any Pari Passu Indebtedness then outstanding, to purchase the maximum
principal amount of Notes and such Pari Passu Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount of the Notes plus accrued and unpaid
interest and Additional Interest, if any, thereon to the date of settlement,
subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Change of Control Purchase Date, in accordance with the procedures set forth in
the Indenture.  If any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use such
remaining Excess Proceeds for any purpose not otherwise prohibited by the
Indenture including, without limitation, the repurchase or redemption of

 

7

 

Indebtedness
that is subordinated to the notes or, in the case of any Subsidiary Guarantee,
the guarantee of such Guarantor.  If the
aggregate principal amount of Notes surrendered by Holders thereof and Pari
Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and Pari Passu
Indebtedness to be purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Trustee so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased) on the basis of the
aggregate principal amount of tendered Notes and Pari Passu Indebtedness.  Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such Notes purchased by
completing the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Notes.

 

9.                                       Notice
of Redemption.  Notice of redemption
will be mailed at least 30 days but not more than 60 days (except as otherwise
provided in the Indenture if the notice is issued in connection with a Legal
Defeasance) before the redemption date to each Holder whose Notes are to be
redeemed at its registered address. 
Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed.  On and after the
redemption date interest and Additional Interest, if any, cease to accrue on
Notes or portions thereof called for redemption.

 

10.                                 Denominations,
Transfer, Exchange.  The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  The transfer of
Notes may be registered and Notes may be exchanged as provided in the
Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents, and the Company may require a Holder to pay any taxes
due on transfer or exchange.  The Issuers
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note being
redeemed in part.  Also, they need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed.

 

11.                                 Persons
Deemed Owners.  The registered Holder
of a Note may be treated as its owner for all purposes.

 

12.                                 Amendment,
Supplement and Waiver.  Subject to
certain exceptions, the Indenture, the Notes any Subsidiary Guarantee and any
other agreement or documents delivered to the trustee pursuant to the terms of
this Indenture may be amended or supplemented with the consent of the Holders
of at least a majority in principal amount of the then outstanding Notes, and any
existing default or compliance with any provision of the Indenture, the Notes
an any other agreement or documents delivered to the trustee purchase to the
terms of this Indenture may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes.  Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented (1) to cure any
ambiguity, defect or inconsistency, (2) to provide for uncertificated
Notes in addition to or in place of certificated Notes, (3) to provide for
the assumption of an Issuer’s or Guarantor’s obligations to the Holders of the
Notes pursuant to Article 5 hereof, (4) to make any change that would
provide any additional rights or benefits to the Holders of the Notes or
surrender any right or power conferred upon the Issuers or the Subsidiary
Guarantors by the Indenture that does not adversely affect the legal rights
under the

 

8

 

Indenture of any
such Holder, provided that any change to conform the Indenture to the Offering
Memorandum shall not be deemed to adversely affect the legal rights under the
Indenture of any Holder, (5) to secure the Notes or the Subsidiary
Guarantees pursuant to Section 4.12 of the Indenture or otherwise, (6) to
provide for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, (7) to add any additional Guarantor with
respect to the Notes or to evidence the release of any Guarantor from its
Subsidiary Guarantee, in each case as provided in the Indenture, (8) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, (9) to
evidence or provide for the acceptance of appointment under the Indenture of a
successor Trustee or (10) provide for the issuance of exchange securities
which shall have terms substantially identical in all respects to the Notes
(except that transfer restrictions contained in the Notes shall be modified or
eliminated as appropriate) and which shall be treated, together with any
outstanding notes, as a single class of securities.

 

13.                                 Defaults
and Remedies.  Events of Default
include: (i) default for 30 days in the payment when due of interest on
the Notes; (ii) default in payment when due of the principal of or
premium, if any, on the Notes; (iii) failure by the Company to comply with
the provisions of Section 3.10, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure
by the Company for 60 days after written notice to comply with any of its other
agreements in this Indenture; (v) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company
or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee
now exists or is created after the Initial Issuance Date, if such default (a) is
caused by a failure to pay principal of, interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness (a “Payment Default”) or (b) results in the acceleration of
such Indebtedness prior to its Stated Maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $30.0 million or more
provided that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 30 days from the
continuation of such default beyond the applicable grace period or the
occurrence of such acceleration, as the case may be, such Event of Default and
any consequential acceleration of the Notes shall be automatically rescinded,
so long as such rescission does not conflict with any judgment or decree; (vi) failure
by the Company or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $30.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; (vii) except as permitted by
the Indenture, any Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be
in full force and effect or any Guarantor, or any Person acting on behalf of
any Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; and (viii) certain events of bankruptcy, insolvency or
reorganization with respect to the Company, Finance Corp., any of the Company’s
Restricted Subsidiaries that is a Significant Subsidiary of the Company or any
group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary of the Company as specified in Section 6.01(h) or
6.01(i) of the Indenture.  If any
Event of Default occurs and is continuing, the Trustee, by notice to the
Issuers, or the Holders of at least 25% in principal amount of the then
outstanding Notes, by notice to the Issuers and the Trustee, may declare all
the Notes to be due and payable immediately. 
Notwithstanding the

 

9

 

preceding, in the
case of an Event of Default arising from such events of bankruptcy, insolvency
or reorganization described in Section 6.01(h) or 6.01(i) of the
Indenture, all outstanding Notes will become due and payable without further
action or notice.  Holders may not enforce
the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power conferred on it.  The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal, interest, premium or
Additional Interest) if it determines that withholding notice is in their
interest.  The Holders of a majority in
principal amount of the Notes then outstanding by written notice to the Trustee
may on behalf of the Holders of all of the Notes waive any existing Default or Event
of Default and its consequences under the Indenture except a continuing Default
or Event of Default in the payment of the principal of or premium, interest or
Additional Interest, if any, on the Notes. 
The Issuers are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and, so long as any Notes are
outstanding, the Issuers are required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.

 

14.                                 Defeasance
and Discharge.  The Notes are subject
to defeasance and discharge upon the terms and conditions specified in the
Indenture.

 

15.                                 No
Recourse Against Others.  No past,
present or future director, officer, partner, employee, incorporator, manager
or unitholder or other owner of Equity Interest of the Issuers, the General
Partner or any Guarantor, as such, shall have any liability for any obligations
of the Issuers or any Guarantor under the Notes, the Subsidiary Guarantees or
the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Notes.

 

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

 

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

 

18.                                 Additional
Rights of Holders of Transfer Restricted Securities.  In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Transfer Restricted Securities shall
have all the rights set forth in the Registration Rights Agreement dated as of September 23,
2005, among the Issuers, the Guarantors and the Initial Purchasers (the “Registration Rights Agreement”).

 

19.                                 CUSIP
Numbers.  Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Issuers have caused CUSIP numbers and corresponding ISIN
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any

 

10

 

notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.

 

20.                                 Governing
Law.  THE INDENTURE AND THIS NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

21.                                 Successors.  In the event a successor assumes all the
obligations of an Issuer under the Notes and the Indenture, pursuant to the
terms thereof, such Issuer will be released from all such obligations.

 

The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture or the Registration
Rights Agreement.  Requests may be made
to:

 

Pacific Energy Partners, L.P.

5900 Cherry Avenue

Long Beach, California 90805-4405

Attention: Chief 
Financial Officer

 

11

 

ASSIGNMENT
FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to 

 

	
   

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

  
	
   

  
	
   

  
	
  (Insert assignee’s
  soc. sec. or tax I.D. No.)

  

 

and irrevocably appoint
                         
agent to transfer this Note on the books of the Issuers.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
  Sign exactly
  as your name appears on the other side of this Note.

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature
  must be guaranteed)

  	
   

  	
   

  

 

Signatures must be guaranteed
by an “eligible guarantor institution” meeting the requirements of the
Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

 

In connection with any transfer
of any of the Notes evidenced by this certificate occurring prior to the
expiration of the period referred to in Rule 144(k) under the Securities
Act after the later of the date of original issuance of such Notes and the last
date, if any, on which such Notes were owned by the Company or any Affiliate of
the Company, the undersigned confirms that such Notes are being transferred in
accordance with its terms:

 

CHECK ONE BOX BELOW

 

	
  (1)

  	
   

  	
  o

  	
   

  	
  to an
  Issuer; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  o

  	
   

  	
  pursuant to
  an effective registration statement under the Securities Act of 1933; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  o

  	
   

  	
  inside the
  United States to a person who the undersigned reasonably believes is a “qualified
  institutional buyer” (as defined in Rule 144A under the Securities Act
  of 1933) that is purchasing for its own account or for the account of a
  qualified institutional buyer to whom notice is given that such transfer is
  being made in reliance on Rule 144A, in each case pursuant to and in
  compliance with Rule 144A under the Securities Act of 1933; or

  

 

12

 

	
  (4)

  	
   

  	
  o

  	
   

  	
  outside the
  United States in an offshore transaction within the meaning of Regulation S
  under the Securities Act in compliance with Rule 904 under the
  Securities Act of 1933; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  o

  	
   

  	
  pursuant to
  the exemption from registration provided by Rule 144 under the
  Securities Act of 1933.

  

 

Unless one of the boxes is
checked, the Trustee will refuse to register any of the Notes evidenced by this
certificate in the name of any person other than the registered holder thereof;
provided, however, that if box (4) or (5) is checked, the Trustee
shall be entitled to require, prior to registering any such transfer of the
Notes, such legal opinions, certifications and other information as the Company
has reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by Rule 144
under such Act.

 

 

	
   

  	
   

  
	
   

  	
  Signature

  

 

13

 

TO BE COMPLETED BY PURCHASER IF
(3) ABOVE IS CHECKED.

 

The undersigned represents and
warrants that it is purchasing this Note for its own account or an account with
respect to which it exercises sole investment discretion and that it and any
such account is a “qualified institutional buyer” within the meaning of Rule 144A
under the Securities Act of 1933, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Issuers and any Guarantors as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned’s foregoing representations in order to claim the exemption from
registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Notice:  To be executed by an executive officer

  

 

14

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note
purchased by the Company pursuant to Section 4.10 or 4.15 of the
Indenture, check the box below:

 

	
  o Section 4.10

  	
   

  	
  o Section 4.15

  

 

If you want to elect to have only part of
this Note purchased by the Company pursuant to Section 4.10 or Section 4.15
of the Indenture, state the amount (in minimum denomination of $1,000 or
integral multiples thereof) you elect to have purchased:  $                   

 

	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign
  exactly as your name appears on the other side of this Note)

  

 

	
  Soc. Sec. or Tax Identification No.:

  	
   

  	
   

  

 

	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
  (signature must be guaranteed)

  	
   

  	
   

  

 

 

Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

 

15

 

[TO BE ATTACHED TO GLOBAL NOTE]

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

 

The following increases or decreases in this Global Note have been
made:

 

	
  Date

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Principal

  Amount of this

  Global Note

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized

  officer

  of Trustee or

  Notes Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

16

 

EXHIBIT A TO RULE 144A/REGULATION S APPENDIX

 

[FORM OF FACE OF EXCHANGE
NOTE

OR PRIVATE EXCHANGE NOTE]     */**/

 

*/ If the Note is to be issued
in global form add the Global Notes Legend from Exhibit 1 to Rule 144A/Regulation
S Appendix and the attachment from such Exhibit 1 captioned “[TO BE
ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
NOTE”.

 

**/ If the Note is a Private
Exchange Note issued in a Private Exchange to an Initial Purchaser holding an
unsold portion of its initial allotment, add the Restricted Notes Legend from Exhibit 1
to Rule 144A/Regulation S Appendix and replace the Assignment Form included
in this Exhibit A with the Assignment Form included in such Exhibit 1.

 

All references to “Additional
Interest” in the Note shall be deleted unless if at the date of issuance of the
Exchange Note or Private Exchange Note (as the case may be) any Registration
Default (as defined in the Registration Rights Agreement) has occurred with respect
to the related Initial Notes during the interest period in which such date of
issuance occurs.

 

1

 

[FORM OF FACE OF EXCHANGE
NOTE OR

PRIVATE EXCHANGE NOTE]

 

PACIFIC
ENERGY PARTNERS, L.P.

 

PACIFIC
ENERGY FINANCE CORPORATION

 

CUSIP No.  

ISIN No.

 

	
  No.

  	
   

  	
  $                

  

 

6 1⁄4% Senior Note due 2015

 

Pacific Energy
Partners, L.P., a Delaware limited partnership, and Pacific Energy Corporation,
a Delaware corporation, jointly and severally promise to pay to                     ,
or registered assigns, the principal sum of                     
Dollars on September 15, 2015 [or such greater or lesser amount as may be
indicated on Schedule A hereto].(2)

 

Interest
Payment Dates:  March 15 and September 15.

 

Record
Dates:  March 1 and September 1.

 

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

 

	
   

  	
  PACIFIC
  ENERGY PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific
  Energy GP, LP,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Pacific
  Energy Management LLC,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A.
  Tywoniuk, Senior Vice

  
	
   

  	
   

  	
   

  	
  President,
  Chief Financial Officer and

   Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC
  ENERGY FINANCE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

(2) If this Note is a
Global Note, add this provision.

 

2

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

 

WELLS FARGO BANK, NATIONAL
ASSOCIATION,

 

as Trustee,
certifies that

this is one of
the Notes

referred to in
the Indenture.

 

	
  By

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

Dated:

 

3

 

[FORM OF REVERSE SIDE OF
EXCHANGE NOTE OR

PRIVATE EXCHANGE NOTE]

 

6 1⁄4% Senior Note due 2015

 

Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.

 

1.                                       Interest.  Pacific Energy Partners, L.P., a Delaware
limited partnership (the “Company”), and Pacific Energy Finance Corporation, a
Delaware corporation (the “Finance Corp.” and, together with the Company, the “Issuers”),
jointly and severally promise to pay interest on the principal amount of this
Note at 6 1⁄4% per annum from September 23, 2005 until maturity and shall
pay the Additional Interest payable pursuant to Section 6 of the
Registration Rights Agreement referred to below.  The Issuers will pay interest and Additional
Interest, if any, semi-annually in arrears on March 15 and September 15
of each year, commencing March 15, 2006, or if any such day is not a
Business Day, on the next succeeding Business Day (each an “Interest Payment
Date”).  Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance; provided that if
there is no existing Default or Event of Default in the payment of interest,
and if this Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue
from such next succeeding Interest Payment Date, except in the case of the
original issuance of Notes, in which case interest shall accrue from the date
of authentication.  The Issuers shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Additional Interest (without regard to
any applicable grace periods) from time to time on demand at the same rate to
the extent lawful.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

 

2.                                       Method
of Payment.  The Issuers will pay
interest on the Notes (except defaulted interest) and Additional Interest to
the Persons who are registered Holders of Notes at the close of business on the
March 1 or September 1 next preceding the Interest Payment Date, even
if such Notes are cancelled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.11 of the Indenture
with respect to defaulted interest. 
Holders must surrender Notes to the Paying Agent to collect payments of
principal and premium, if any, together with accrued and unpaid interest and
Additional Interest, if any, due at maturity. 
The Notes will be payable as to principal, premium, if any, interest and
Additional Interest, if any, at the office or agency of the Issuers maintained for
such purpose within the City and State of New York, or, at the option of the
Issuers, payment of interest and Additional Interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to any amounts due on all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to
the Issuers or the Paying Agent.  Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.

 

4

 

3.                                       Paying
Agent and Registrar.  Initially,
Wells Fargo Bank, National Association, the Trustee under the Indenture, will
act as Paying Agent and Registrar.  The
Company may change any Paying Agent or Registrar without notice to any
Holder.  The Company or any of its Subsidiaries
may act in any such capacity.

 

4.                                       Indenture.  The Issuers issued the Notes under an
Indenture dated as of September 23, 2005 (“Indenture”)
among the Issuers, the Guarantors and the Trustee.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms.  The Notes are unsecured senior
obligations of the Issuers limited to $150,000,000 aggregate principal amount
in the case of Notes issued on the Initial Issuance Date (as defined in the
Indenture).

 

5.                                       Optional
Redemption.

 

(a)                                  Except as set forth in subparagraph (b) or
(c) of this Paragraph 5, the Issuers shall not have the option to redeem
the Notes prior to September 15, 2010. 
On or after September 15, 2010, the Issuers shall have the option
to redeem the Notes, in whole or in part, upon not less than 30 nor more than
60 days’ notice as set forth in Paragraph 8, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest and Additional Interest, 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 twelve-month period
beginning on September 15 of the years indicated below:

 

	
  YEAR

  	
   

  	
  PERCENTAGE

  	
   

  
	
  2010

  	
   

  	
  103.125

  	
  %

  
	
  2011

  	
   

  	
  102.083

  	
  %

  
	
  2012

  	
   

  	
  101.042

  	
  %

  
	
  2013 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 Notwithstanding the provisions of
subparagraph (a) of this Paragraph 5, at any time on or prior to September 15,
2008, the Company may on any one or more occasions redeem up to 35% of the
aggregate principal amount of Notes (including any Additional Notes) issued
under the Indenture at a redemption price of 106.25% of the principal amount
thereof, plus accrued and unpaid interest and Additional Interest, if any,
thereon to the redemption date (subject to the right of Holders of record on
the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the redemption date), with the net cash proceeds of one
or more Equity Offerings by the Company; provided that (i) at least 65% of
the aggregate principal amount of Notes (including any Additional Notes) issued
under the Indenture remains outstanding immediately after the occurrence of
each such redemption (excluding any Notes held by the Company and its
Subsidiaries) and (ii) each such redemption occurs within 120 days of
the date of the closing of each such Equity Offering.

 

5

 

(c)                                  At any time prior to September 15,
2010, the Issuers may, at their option, redeem all or any portion of the Notes
at the Make-Whole Price plus accrued and unpaid interest to the date of
redemption.

 

6.                                       Special
Mandatory Redemption

 

If the Issuers have not consummated the acquisition of
at least two of the three asset packages that comprise the Valero Assets on or
before the day that is 120 days after the closing of the Notes, then the
Issuers will, on a day not more than 30 business days after such date (“the “Deadline”),
or such earlier date determined by the Issuers and permitted by applicable law
(such date, the “Special Mandatory Redemption Date”), redeem all of the notes
at a redemption price equal to 99.545% of the principal amount of the notes,
plus accrued and unpaid interest.  Notice
of a special mandatory redemption prior to the Deadline will be mailed promptly
to each Holder of Notes at its registered address, and the Trustee.  On the Special Mandatory Redemption Date, the
Issuer shall pay to a paying agent for payment to each Holder of Notes the
redemption price for such Holder’s Notes.

 

7.                                       Mandatory
Redemption.

 

Except as set forth in Paragraph 6 above and
Paragraph 8 below, neither of the Issuers shall be required to make mandatory
redemption or sinking fund payments with respect to the Notes or to repurchase
the Notes at the option of the Holders.

 

8.                                       Repurchase
at Option of Holder.

 

(a)                                  Within 30 days following the
occurrence of a Change of Control, the Company shall make an offer (a “Change
of Control Offer”) to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of each Holder’s Notes at a purchase price equal to
101% of the aggregate principal amount of Notes repurchased, plus accrued and
unpaid interest and Additional Interest, if any, to the date of settlement (the
“Change of Control Purchase Date”), subject to the right of Holders of record
on the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the Change of Control Purchase Date.  Within 30 days following a Change of Control,
the Company shall mail a notice of the Change of Control Offer to each Holder
and the Trustee describing the transaction that constitutes the Change of
Control and setting forth the procedures governing the Change of Control Offer
as required by Section 4.15 of the Indenture.

 

(b)                                 On the 366th day after an
Asset Sale, if the aggregate amount of Excess Proceeds then exceeds $30.0
million, the Company shall commence an offer to all Holders of Notes (an “Asset
Sale Offer”) pursuant to Section 3.10 of the Indenture, and to all holders
of any Pari Passu Indebtedness then outstanding, to purchase the maximum
principal amount of Notes and such Pari Passu Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount of the Notes plus accrued and unpaid
interest and Additional Interest, if any, thereon to the date of settlement,
subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Change of Control Purchase Date, in accordance with the procedures set forth in
the Indenture.  If any Excess Proceeds
remain after consummation of an Asset Sale

 

6

 

Offer, the Company
may use such remaining Excess Proceeds for any purpose not otherwise prohibited
by the Indenture, including, without limitation, the repurchase or redemption
of Indebtedness that is subordinated to the notes or, in the case of any
Subsidiary Guarantee, the guarantee of such Guarantor.  If the aggregate principal amount of Notes
surrendered by Holders thereof and Pari Passu Indebtedness surrendered by
holders or lenders, collectively, exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and Pari Passu Indebtedness to be purchased on a
pro rata basis (with such adjustments as may be deemed appropriate by the
Trustee so that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased) on the basis of the aggregate principal amount of
tendered Notes and Pari Passu Indebtedness. 
Holders of Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form entitled “Option
of Holder to Elect Purchase” on the reverse of the Notes.

 

9.                                       Notice
of Redemption.  Notice of redemption
will be mailed at least 30 days but not more than 60 days (except as otherwise
provided in the Indenture if the notice is issued in connection with a Legal
Defeasance) before the redemption date to each Holder whose Notes are to be
redeemed at its registered address. 
Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed.  On and after the
redemption date interest and Additional Interest, if any, cease to accrue on
Notes or portions thereof called for redemption.

 

10.                                 Denominations,
Transfer, Exchange.  The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  The transfer of
Notes may be registered and Notes may be exchanged as provided in the
Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents, and the Company may require a Holder to pay any taxes
due on transfer or exchange.  The Issuers
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note being
redeemed in part.  Also, they need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed.

 

11.                                 Persons
Deemed Owners.  The registered Holder
of a Note may be treated as its owner for all purposes.

 

12.                                 Amendment,
Supplement and Waiver.  Subject to
certain exceptions, the Indenture, the Notes any Subsidiary Guarantee and any
other agreement or documents delivered to the trustee pursuant to the terms of
this Indenture may be amended or supplemented with the consent of the Holders
of at least a majority in principal amount of the then outstanding Notes, and
any existing default or compliance with any provision of the Indenture, the
Notes an any other agreement or documents delivered to the trustee purchase to
the terms of this Indenture may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes.  Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented (1) to cure any
ambiguity, defect or inconsistency, (2) to provide for uncertificated
Notes in addition to or in place of certificated Notes, (3) to provide for
the assumption of an Issuer’s or Guarantor’s obligations to the Holders of the
Notes pursuant to Article 5 hereof, (4) to make any change that would
provide any additional rights or benefits to

 

7

 

the Holders of the
Notes or surrender any right or power conferred upon the Issuers or the
Subsidiary Guarantors by the Indenture that does not adversely affect the legal
rights under the Indenture of any such Holder, provided that any change to
conform the Indenture to the Offering Memorandum shall not be deemed to adversely
affect the legal rights under the Indenture of any Holder, (5) to secure
the Notes or the Subsidiary Guarantees pursuant to Section 4.12 of the
Indenture or otherwise, (6) to provide for the issuance of Additional
Notes in accordance with the limitations set forth in the Indenture, (7) to
add any additional Guarantor with respect to the Notes or to evidence the
release of any Guarantor from its Subsidiary Guarantee, in each case as
provided in the Indenture, (8) to comply with the requirements of the SEC
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act, (9) to evidence or provide for the acceptance of
appointment under the Indenture of a successor Trustee or (10) provide for
the issuance of exchange securities which shall have terms substantially
identical in all respects to the Notes (except that transfer restrictions
contained in the Notes shall be modified or eliminated as appropriate) and
which shall be treated, together with any outstanding notes, as a single class
of securities.

 

13.                                 Defaults
and Remedies.  Events of Default
include: (i) default for 30 days in the payment when due of interest on
the Notes; (ii) default in payment when due of the principal of or
premium, if any, on the Notes when due at Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise; (iii) failure
by the Company to comply with Section 3.10, 4.15 or 5.01 of the Indenture;
(iv) failure by the Company for 60 days after written notice to comply
with any of its other agreements in the Indenture or the Notes; (v) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which
is guaranteed by the Company or any of its Restricted Subsidiaries), whether
such Indebtedness or guarantee now exists or is created after the Initial
Issuance Date, if such default (a) is caused by a failure to pay principal
of, or interest or premium, if any, on such Indebtedness prior to the
expiration of any grace period provided in such Indebtedness (a “Payment
Default”) or (b) results in the acceleration of such Indebtedness prior to
its Stated Maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $30.0 million or more provided that if any such
default is cured or waived or any such acceleration rescinded, or such
Indebtedness is repaid, within a period of 30 days from the continuation of
such default beyond the applicable grace period or the occurrence of such
acceleration, as the case may be, such Event of Default and any consequential
acceleration of the Notes shall be automatically rescinded, so long as such
rescission does not conflict with any judgment or decree; (vi) failure by
the Company or any of its Subsidiaries to pay final judgments aggregating in
excess of $30.0 million, which judgments are not paid, discharged or stayed for
a period of 60 days; (vii) except as permitted by the Indenture, any
Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee; and (viii) certain
events of bankruptcy, insolvency or reorganization with respect to the Company,
Finance Corp., any of the Company’s Restricted Subsidiaries that is a
Significant Subsidiary of the Company or any group of Restricted Subsidiaries
of the Company that, taken together, would constitute a Significant Subsidiary
of the Company as specified in

 

8

 

Section 6.01(h) or
6.01(i) of the Indenture.  If any
Event of Default occurs and is continuing, the Trustee, by notice to the
Issuers, or the Holders of at least 25% in principal amount of the then
outstanding Notes, by notice to the Issuers and the Trustee, may declare all
the Notes to be due and payable immediately. 
Notwithstanding the preceding, in the case of an Event of Default
arising from such events of bankruptcy, insolvency or reorganization described
in Section 6.01(h) or 6.01(i) of the Indenture, all outstanding
Notes will become due and payable without further action or notice.  Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. 
Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power conferred on it.  The
Trustee may withhold from Holders of the Notes notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal, interest, premium or Additional Interest) if it
determines that withholding notice is in their interest.  The Holders of a majority in principal amount
of the Notes then outstanding by written notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or Event
of Default in the payment of the principal of or premium, interest or
Additional Interest, if any, on the Notes. 
The Issuers are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and, so long as any Notes are
outstanding, the Issuers are required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.

 

14.                                 Defeasance
and Discharge.  The Notes are subject
to defeasance and discharge upon the terms and conditions specified in the
Indenture.

 

15.                                 No
Recourse Against Others.  No past,
present or future director, officer, partner, employee, incorporator, manager
or unitholder or other owner of Equity Interest of the Issuers, the General
Partner, the Managing Partner or any Guarantor, as such, shall have any
liability for any obligations of the Issuers or any Guarantor under the Notes,
the Subsidiary Guarantees or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation.  Each Holder by accepting a Note waives and
releases all such liability.  The waiver
and release are part of the consideration for the issuance of the Notes.

 

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

 

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

 

18.                                 [Additional
Rights of Holders of Transfer Restricted Securities.  In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Transfer Restricted Securities shall
have all the rights set forth in the Registration Rights Agreement dated as of

 

9

 

September 23,
2005, among the Issuers, the Guarantors and the Initial Purchasers (the “Registration Rights Agreement”).](3)

 

19.                                 CUSIP
Numbers.  Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes
and the Trustee may use CUSIP numbers and corresponding ISIN numbers in notices
of redemption as a convenience to Holders. 
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.

 

20.                                 Governing
Law.  THE INDENTURE AND THIS NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

21.                                 Successors.  In the event a successor assumes all the
obligations of an Issuer under the Notes and the Indenture, pursuant to the
terms thereof, such Issuer will be released from all such obligations.

 

The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture [and/or the
Registration Rights Agreement](4). 
Requests may be made to:

 

Pacific Energy Partners, L.P.

5900 Cherry Avenue

Long Beach, California 90805-4405

Attention: Chief Financial Officer

 

(3)  Delete if this Note
is not being issued in exchange for an Initial Note.

 

(4)  Delete if this Note
is not being issued in exchange for an Initial Note.

 

10

 

ASSIGNMENT
FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to 

 

	
   

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

  
	
   

  
	
   

  
	
  (Insert
  assignee’s soc. sec. or tax I.D. No.)

  

 

and irrevocably appoint                            
agent to transfer this Note on the books of the Issuers.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
  Sign exactly
  as your name appears on the other side of this Note.

  

 

Signatures
must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

 

11

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note
purchased by the Company pursuant to Section 4.10 or 4.15 of the
Indenture, check the box below:

 

o

 

If you want to elect to have only part of
this Note purchased by the Company pursuant to Section 4.10 or Section 4.15
of the Indenture, state the amount (in minimum denomination of $1,000 or
integral multiples thereof) you elected to have purchased:  $            

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign
  exactly as your name appears on the other side of this Note)

  

 

 

	
  Soc. Sec. or Tax Identification No.:

  	
   

  	
   

  

 

	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must be guaranteed)

  	
   

  	
   

  

 

Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which
requirements include membership or participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

 

12

 

ANNEX
A

 

 

PACIFIC
ENERGY PARTNERS, L.P.

 

PACIFIC
ENERGY FINANCE CORPORATION

 

and

 

the
Guarantors named herein

 

 

6
1⁄4% SENIOR NOTES DUE 2015

 

 

FORM OF
SUPPLEMENTAL INDENTURE

AND AMENDMENT – SUBSIDIARY GUARANTEE

 

DATED
AS OF                ,      

 

 

WELLS
FARGO BANK, NATIONAL ASSOCIATION,

 

Trustee

 

 

A-1

 

This SUPPLEMENTAL INDENTURE, dated as of                   ,       
is among Pacific Energy Partners, L.P., a Delaware limited partnership (the “Company”),
Pacific Energy Finance Corporation, a Delaware corporation ( “Finance Corp.”
and, together with the Company, the “Issuers”), each of the parties identified
under the caption “Guarantors” on the signature page hereto (the “Guarantors”)
and Wells Fargo Bank, National Association, a New York banking corporation, as
Trustee.

 

RECITALS

 

WHEREAS, the Issuers, the initial Guarantors
and the Trustee entered into an Indenture, dated as of September 23, 2005
(the “Indenture”), pursuant to which the
Company has issued $175 million in aggregate principal amount of 6 1⁄4% Senior
Notes due 2015 (the “Notes”);

 

WHEREAS, Section 9.01(g) of the
Indenture provides that the Issuers, the Guarantors and the Trustee may amend
or supplement the Indenture in order to comply with Section 4.13 or 10.03
thereof, without the consent of the Holders of the Notes; and

 

WHEREAS, all acts and things prescribed by
the Indenture, by law and by the Certificate of Incorporation and the Bylaws
(or comparable constituent documents) of the Issuers, of the Guarantors and of
the Trustee necessary to make this Supplemental Indenture a valid instrument
legally binding on the Issuers, the Guarantors and the Trustee, in accordance
with its terms, have been duly done and performed;

 

NOW, THEREFORE, to comply with the provisions
of the Indenture and in consideration of the above premises, the Issuers, the
Guarantors and the Trustee covenant and agree for the equal and proportionate
benefit of the respective Holders of the Notes as follows:

 

ARTICLE 1

 

Section 1.01.                             This
Supplemental Indenture is supplemental to the Indenture and does and shall be
deemed to form a part of, and shall be construed in connection with and as part
of, the Indenture for any and all purposes.

 

Section 1.02.                             This
Supplemental Indenture shall become effective immediately upon its execution
and delivery by each of the Issuers, the Guarantors and the Trustee.

 

ARTICLE 2

 

From this date, in accordance with Section 4.13
or 10.03 and by executing this Supplemental Indenture, the Guarantors whose
signatures appear below are subject to the provisions of the Indenture to the
extent provided for in Article 10 thereunder.

 

ARTICLE 3

 

Section 3.01.                             Except
as specifically modified herein, the Indenture and the Notes are in all
respects ratified and confirmed (mutatis mutandis)
and shall remain in full force and effect in accordance with their terms with
all capitalized terms used herein without definition having the same respective
meanings ascribed to them as in the Indenture.

 

A-2

 

Section 3.02.                             Except
as otherwise expressly provided herein, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Supplemental Indenture. 
This Supplemental Indenture is executed and accepted by the Trustee
subject to all the terms and conditions set forth in the Indenture with the
same force and effect as if those terms and conditions were repeated at length
herein and made applicable to the Trustee with respect hereto.

 

Section 3.03.                             THIS
SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

 

Section 3.04.                             The
parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but
all of such executed copies together shall represent the same agreement.

 

[NEXT
PAGE IS SIGNATURE PAGE]

 

A-3

 

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

 

 

	
   

  	
  PACIFIC ENERGY PARTNERS,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific
  Energy GP, LP,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Pacific
  Energy Management LLC,

  
	
   

  	
   

  	
        its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice President,

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC ENERGY FINANCE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior
  Vice President,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
  PACIFIC ATLANTIC TERMINALS
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Group LLC, its sole member

  
	
   

  	
   

  	
  By:  Pacific
  Energy Partners, L.P., its sole member

  
	
   

  	
   

  	
  By:  Pacific Energy GP, LP, its general
  partner

  
	
   

  	
   

  	
  By:     Pacific Energy Management
  LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Gerald A.
  Tywoniuk

  
	
   

  	
   

  	
   

  	
   

  	
  Senior Vice
  President,

  
	
   

  	
   

  	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
									

 

A-4

 

	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  PACIFIC ENERGY GROUP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Partners,
  L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Management
  LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice President,

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEG CANADA GP LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy Partners,
  L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific
  Energy Management LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice President,

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PEG CANADA, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PEG Canada GP LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice President,

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
										

 

A-5

 

	
   

  	
  ROCKY MOUNTAIN PIPELINE
  SYSTEM LLC,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Pacific Energy Group LLC,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Partners,
  L.P.,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Pacific Energy Management
  LLC,

  
	
  ‘

  	
   

  	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  President,
  Chief Financial Officer and

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RANCH PIPELINE LLC,

  
	
   

  	
  By:

  	
  Pacific Energy Group LLC,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Partners,
  L.P.,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
   

  	
   

  	
    its general
  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy Management
  LLC,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice President,

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC
  MARKETING AND TRANSPORTATION

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific
  Energy Group LLC,

  
	
   

  	
   

  	
  its sole
  member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific
  Energy Partners, L.P.,

  
	
   

  	
   

  	
   

  	
  its sole
  member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Pacific Energy GP, LP,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Pacific Energy Management
  LLC,

  
	
   

  	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Gerald A. Tywoniuk, Senior Vice

  
	
   

  	
   

  	
   

  	
   

  	
  President,
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
  and
  Treasurer

  
										

 

A-6

 

	
   

  	
  WELLS FARGO
  BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Maddy
  Hall

  
	
   

  	
   

  	
  Title:
  Assistant Vice President

  

 

A-7

 

ANNEX
B

 

REGISTRATION
RIGHTS AGREEMENT

 

[See attached]

 

B-1

 

ANNEX C

 

CERTAIN AGREEMENTS

 

[Pacific to list agreements for clause (4) of
Section 4.11]

 

C-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]