Document:

exv10w1

Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 1 TO

THE SUB-BAREBOAT CHARTER PARTY RESPECTING 3 VESSELS

     THIS AMENDMENT NO. 1 (“Amendment No. 1”), dated as of April 28, 2011, to the
Sub-Bareboat Charter Party Respecting 3 Vessels, dated as of February 27, 2003 (the
“Subcharter”) between Horizon Lines, LLC, a Delaware limited liability company (the
“Subcharterer”) and CSX Alaska Vessel Company, LLC, a Delaware limited liability company
(the “Charterer” and, together with the Subcharterer, the “Charterparties”) is by
and between the Charterparties.

     WHEREAS, the Charterparties have entered into the Subcharter for the Vessels on the terms and
conditions set forth therein;

     WHEREAS, the Charterparties entered into a letter of intent dated March 25, 2011 setting forth
an agreement in principle to amend the Subcharter (the “Letter”);

     WHEREAS, the Charterparties wish to clarify and replace any agreement or understanding
contained in the Letter with the provisions set forth herein; and

     WHEREAS, each Charterparty has agreed, subject to the limitations and conditions set forth
herein, to amend the Subcharter to reduce the aggregate amount of Basic Hire payable during the
remainder of the Basic Period and to make certain other amendments thereto as specified herein;

     NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Charterparties agree as follows:

     1. Definitions. Except as expressly provided herein, capitalized terms used herein
but not defined herein shall have the meanings set forth in the Subcharter.

     2. Replacement of the Letter. The Charterparties agree that the Letter is hereby
superseded by and replaced in its entirety with this Amendment No. 1.

     3. Amendments to the Subcharter.

     (a) Payment Date. Article 1(gg) of the Subcharter is hereby amended by adding
a second paragraph that reads as follows:

““Payment Date” has the meaning specified in the Charters except that, for
purposes of this Subcharter only, such definition is modified by inserting the
following words in the proviso after the word “that” and before the word “if” in
the sixth line thereof: “effective as of January 1, 2011 and for the remainder of
the Basic Period, Payment Date shall mean, solely for purposes of the payment of
Basic Hire for the remainder of the Basic

Page 1

 

Period (but not for purposes of the calculation or the payment of Stipulated Loss
Value or Termination Value or any other purpose), the 2nd day of each
calendar month through and including December 2, 2014; provided,
further, that”.

     (b) Basic Hire. Article 9(a) of the Subcharter shall be amended by
re-designating Article 9(a) as Article 9(a)(1) and adding the following new Article 9(a)(2)
that reads as follows:

“(2) Notwithstanding Article 9(a)(1), (i) effective as of January 1, 2011 and for
the remainder of the Basic Period, Basic Hire payable by the Subcharterer in
respect of each Vessel on each Payment Date shall be in an amount equal to the
product of Capitalized Cost for such Vessel multiplied by the percentage listed on
Schedule 2A attached hereto opposite the relevant Payment Date; and (ii) in the
event any adjustment to Basic Hire for any Vessel is required by Article 9(e) or
(f) hereof subsequent to January 1, 2011, such Basic Hire adjustment shall be
calculated as follows: (x) Basic Hire that would have been payable for such Vessel
for the remainder of the Basic Period without regard to clause (i) of this Article
9(a)(2) and without regard to the proviso beginning in the sixth line of the
definition of Payment Date (such Basic Hire referred to herein as “Original
Basic Hire”), shall be adjusted as provided in Article 9(e) or 9(f), as
applicable, (such adjusted Basic Hire being referred to herein as “Adjusted
Original Basic Hire”), (y) the excess of (A) such aggregate Adjusted Original
Basic Hire for such Vessel over (B) the aggregate Original Basic Hire for such
Vessel shall be divided by the number of monthly Basic Hire Payment Dates following
the effective date of such adjustment through and including July 2, 2014, to derive
an equal monthly amount (each, a “Monthly Installment”), and (z) Basic Hire
for such Vessel for each Payment Date from the effective date of such adjustment
through and including July 2, 2014 shall be equal to the sum of the Basic Hire for
such Vessel provided for in clause (i) of this Article 9(a)(2) and the Monthly
Installment therefor calculated pursuant to clause (y) of this sentence.

For the avoidance of doubt, Basic Hire payable in respect of a Vessel during any
extension of the Charter Period for such Vessel pursuant to paragraph (b) of
Article 2 or during any Fixed Rate Renewal Period for such Vessel pursuant to
paragraph (c)(iii) of Article 2 shall be calculated without regard to this Article
9(a)(2).”

     (c) Concerning Payments of Stipulated Loss Value and Termination Value.
Article 9 of the Subcharter is amended by adding a new Article 9(i) that reads as follows:

“(i) Whenever the Subcharterer is obligated under this Subcharter to pay Stipulated
Loss Value or Termination Value with respect to any

Page 2

 

Vessel, the Stipulated Loss Value or Termination Value payable shall be either
(x) decreased by an amount equal to the excess of the total Basic Hire actually
paid in respect of such Vessel by the Subcharterer for the period from and after
January 1, 2011 through the date on which such Stipulated Loss Value or Termination
Value is paid (the “SLV/TV Payment Date”) over the total Basic Hire that
would have been payable by the Subcharterer in respect of such Vessel without
regard to clause (i) of Article 9(a)(2) and without regard to the proviso beginning
in the sixth line of the definition of Payment Date for such period (the
“Original Basic Hire Amount”) or (y) increased by the shortfall between the
total Basic Hire actually paid in respect of such Vessel for the period from and
after January 1, 2011 through the SLV/TV Payment Date and the Original Basic Hire
Amount.”

     (d) Payments of Basic Hire from and after January 3, 2011. Article 9(c) of
the Subcharter is amended by adding a new paragraph at the end thereof that reads as
follows:

“Notwithstanding the provisions of the preceding paragraph, all payments
contemplated by Articles 9(a)(2) and 9(i)(y) and payable from and after January 3,
2011 shall be made directly to the Charterer at such account as the Charterer shall
specify in a notice to the Subcharterer in immediately available funds on or before
10:00 am at the place of payment on the date due thereof.”

     (e) The parties hereby confirm their understanding that, notwithstanding anything to
the contrary in the Subcharter or any other writing to the contrary, it was their intention
at the time of the execution of the Subcharter, and remains so since such execution, that
the Subcharter constitutes a lease for United States tax purposes. Further, to confirm
such understanding, a new Article 22(j) of the Subcharter is hereby added, and shall be
deemed to have been incorporated at the time of the execution of the Subcharter, that reads
as follows:

“(j) The parties agree that the Subcharter provided for herein is intended to
constitute a lease for United States tax purposes.”

     (f) A new Article 22(k) of the Subcharter is hereby added, and shall be deemed to have
been incorporated at the time of the execution of the Subcharter, that reads as follows:

“(k) The Subcharterer acknowledges and agrees that, in the event that the
Subcharterer files a voluntary petition for relief under chapter 11 of title 11
of the United States Code (the “Bankruptcy Code”) or otherwise becomes
subject to such a proceeding, the Charterer shall, to the fullest extent
permitted by applicable law, be entitled to all rights and remedies available
to a lessor under the

Page 3

 

Bankruptcy Code, including, without limitation, those set forth in section 1110
of the Bankruptcy Code.”

     4. Other Terms of the Subcharter. All other terms and conditions of the Subcharter
shall remain in full force and effect and this Amendment No. 1 shall not prejudice any rights or
remedies of the Subcharterer or the Charterer, or otherwise constitute or be deemed to imply a
waiver of any such rights or remedies except, in each case, as expressly set forth herein.

     5. Representations and Warranties.

     (a) Each of the Charterparties represents and warrants that on the date hereof and on
all dates on or after the execution thereof, the Subcharter as amended by this Amendment
No. 1, is a legal, valid and binding obligation of the Charterer or the Subcharterer, as
applicable, enforceable against the Charterer or the Subcharterer, as applicable, in
accordance with its terms and applicable law.

     (b) The Subcharterer shall pay all reasonable costs and out-of-pocket expenses
incurred by or on behalf of the Charterer, including, without limitation, reasonable fees,
costs and expenses of counsel for the Charterer, arising from or relating to the
negotiation, preparation, execution, delivery, implementation and assumption of this
Amendment No. 1. Any such amounts due and unpaid at any time shall be deemed to be owed
under the Subcharter.

     6. Further Assurances. The parties hereto hereby agree to execute and deliver such
further documents and assurances and take such further action, in each case at their own expense,
as the Charterer or the Subcharterer may reasonably request from time to time to more effectively
carry out the intent and purpose of this Amendment No. 1.

     7. Miscellaneous.

     (a) The terms of this Amendment No. 1 may not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever except by written instrument signed by
the party or the parties to be charged.

     (b) This Amendment No. 1 shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

     (c) Any provision of this Amendment No. 1 that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted by
applicable law, the Charterer and the Subcharterer each hereby waive any provision of law
which renders any provision hereof prohibited or unenforceable in any respect.

Page 4

 

     (d) This Amendment No. 1 may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together constitute but
one and the same instrument. Delivery of an executed counterpart hereof by facsimile or
“PDF” by electronic mail shall constitute sufficient delivery of an original counterpart
hereto.

     (e) The interpretation of this Amendment No. 1 and of the rights and obligations of
the parties hereunder shall be governed by the laws applicable to maritime contracts
entered into in the City of New York, and otherwise the law in effect in the State of New
York.

     EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION, OR IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS
AMENDMENT NO. 1 OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY).

     Each party hereto represents and warrants to the other Parties that: (i) it has all requisite
power and authority to execute and deliver this Amendment No. 1 and to consummate the transactions
contemplated hereby and (ii) the execution, delivery and performance of this Amendment No. 1 and
the transactions contemplated hereby have been duly authorized by all necessary action on the part
of such party.

     Each party hereto has had the opportunity to negotiate the terms, consult with counsel, and
modify the provisions of this Amendment No. 1. Therefore, the terms of this Amendment No. 1 shall
be considered and interpreted without any presumption, inference or rule requiring construction or
interpretation of any provision of this Amendment No. 1 against the interests of the drafter.

[The remainder of this page intentionally left blank.]

Page 5

 

     IN WITNESS WHEREOF, the Charterer, the Subcharterer and the Beneficiary
Representative have caused this Amendment No. 1, in several counterparts, to be executed and
delivered by their respective signatories thereunto duly authorized as of the date first set
forth above.

	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	Consented to and Agreed by	 	 
	CSX ALASKA VESSEL COMPANY, LLC	 	 	 	CSX CORPORATION	 	 
	as Charterer	 	 	 	as Beneficiary Representative	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David A. Boor
	 	 	 	By:
	 	/s/ David A. Boor	 	 
	Name:

	 	 

David A. Boor
	 	 
	 	Name:
	 	 

David A. Boor
	 	 
	Its:

	 	Vice President & Treasurer
	 	 	 	Its:
	 	Vice President & Treasurer	 	 

	 	 	 	 	 

	HORIZON LINES, LLC	 	 
	As Subcharterer	 	 
	 
	 	 	 	 
	By:

	 	/s/ Michael T. Avara	 	 
	Name:

	 	 

MICHAEL T. AVARA
	 	 
	Its:

	 	EXECUTIVE VP & CEO	 	 

[Signature Page to Amendment No. 1 to 
The
Sub-Bareboat Charter Party Respecting 3 Vessels]exv4w3

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

Exhibit 4.3

PRECISION DRILLING CORPORATION

 

6.50% SENIOR NOTES DUE 2019

 

INDENTURE

DATED AS OF MARCH 15, 2011

 

VALIANT TRUST COMPANY

Trustee

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	SECTION 1.1 Definitions
	 	 	1	 
	SECTION 1.2 Other Definitions
	 	 	26	 
	SECTION 1.3 Rules of Construction
	 	 	26	 
	SECTION 1.4 Interest Limitation
	 	 	27	 
	SECTION 1.5 Interest Act (Canada)
	 	 	28	 
	 
	 	 	 	 
	ARTICLE II THE NOTES
	 	 	28	 
	SECTION 2.1 Form and Dating
	 	 	28	 
	SECTION 2.2 Execution and Authentication
	 	 	28	 
	SECTION 2.3 Registrar; Transfer Agent; Depository
	 	 	28	 
	SECTION 2.4 [Intentionally Omitted]
	 	 	29	 
	SECTION 2.5 Holder Lists
	 	 	29	 
	SECTION 2.6 Book-Entry Provisions for Global Notes
	 	 	29	 
	SECTION 2.7 Replacement Notes
	 	 	31	 
	SECTION 2.8 Outstanding Notes
	 	 	31	 
	SECTION 2.9 Treasury Notes
	 	 	32	 
	SECTION 2.10 Temporary Notes
	 	 	32	 
	SECTION 2.11 Cancellation
	 	 	32	 
	SECTION 2.12 Defaulted Interest
	 	 	32	 
	SECTION 2.13 Computation of Interest
	 	 	32	 
	SECTION 2.14 CUSIP Number
	 	 	32	 
	SECTION 2.15 [Intentionally Omitted]
	 	 	33	 
	SECTION 2.16 Issuance of Additional Notes
	 	 	33	 
	SECTION 2.17 Notes to Rank Pari Passu
	 	 	33	 
	 
	 	 	 	 
	ARTICLE III REDEMPTION AND PREPAYMENT
	 	 	33	 
	SECTION 3.1 Notices to Trustee
	 	 	33	 
	SECTION 3.2 Selection of Notes to Be Redeemed
	 	 	34	 
	SECTION 3.3 Notice of Redemption
	 	 	34	 
	SECTION 3.4 Effect of Notice of Redemption
	 	 	35	 
	SECTION 3.5 Deposit of Redemption Price
	 	 	35	 
	SECTION 3.6 Notes Redeemed in Part
	 	 	35	 
	SECTION 3.7 Optional Redemption
	 	 	35	 
	 
	 	 	 	 
	-i-

 

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	ARTICLE IV COVENANTS
	 	 	36	 
	SECTION 4.1 Payment of Notes
	 	 	36	 
	SECTION 4.2 [Intentionally Omitted]
	 	 	37	 
	SECTION 4.3 Provision of Financial Information
	 	 	37	 
	SECTION 4.4 Compliance Certificate
	 	 	37	 
	SECTION 4.5 Taxes
	 	 	37	 
	SECTION 4.6 Stay, Extension and Usury Laws
	 	 	37	 
	SECTION 4.7 Limitation on Restricted Payments
	 	 	37	 
	SECTION 4.8 Limitations on Dividend and Other Restrictions Affecting Restricted Subsidiaries
	 	 	40	 
	SECTION 4.9 Limitations on Additional Indebtedness
	 	 	42	 
	SECTION 4.10 Limitations on Asset Sales
	 	 	46	 
	SECTION 4.11 Limitation on Transactions with Affiliates
	 	 	49	 
	SECTION 4.12 Limitations on Liens
	 	 	50	 
	SECTION 4.13 Payments for Consent
	 	 	50	 
	SECTION 4.14 Offer to Purchase upon Change of Control
	 	 	51	 
	SECTION 4.15 Corporate Existence
	 	 	52	 
	SECTION 4.16 Business Activities
	 	 	52	 
	SECTION 4.17 Additional Guarantees
	 	 	52	 
	SECTION 4.18 Limitations on Designation of Unrestricted Subsidiaries
	 	 	53	 
	SECTION 4.19 Further Instruments and Acts
	 	 	54	 
	SECTION 4.20 Covenant Termination
	 	 	54	 
	 
	 	 	 	 
	ARTICLE V SUCCESSORS
	 	 	54	 
	SECTION 5.1 Consolidation, Merger, Conveyance, Transfer or Lease
	 	 	54	 
	 
	 	 	 	 
	ARTICLE VI DEFAULTS AND REMEDIES
	 	 	56	 
	SECTION 6.1 Events of Default
	 	 	56	 
	SECTION 6.2 Acceleration
	 	 	58	 
	SECTION 6.3 Remedies Cumulative; Other Remedies
	 	 	59	 
	SECTION 6.4 Waiver of Past Defaults
	 	 	59	 
	SECTION 6.5 Control by Majority
	 	 	59	 
	SECTION 6.6 Limitation on Suits
	 	 	60	 
	SECTION 6.7 Rights of Holders of Notes to Receive Payment
	 	 	60	 
	SECTION 6.8 Collection Suit by Trustee
	 	 	60	 
	SECTION 6.9 Trustee May File Proofs of Claim
	 	 	60	 
	 
	 	 	 	 
	-ii-

 

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	SECTION 6.10 Priorities
	 	 	61	 
	SECTION 6.11 Undertaking for Costs
	 	 	61	 
	 
	 	 	 	 
	ARTICLE VII TRUSTEE
	 	 	61	 
	SECTION 7.1 Corporate Trustee Required; Eligibility
	 	 	61	 
	SECTION 7.2 Replacement of Trustee
	 	 	62	 
	SECTION 7.3 Duties of Trustee
	 	 	62	 
	SECTION 7.4
Reliance Upon Declarations, Opinions, etc.
	 	 	62	 
	SECTION 7.5
Evidence and Authority to Trustee, Opinions, etc.
	 	 	63	 
	SECTION 7.6 Officers’ Certificates Evidence
	 	 	64	 
	SECTION 7.7 Experts, Advisers and Agents
	 	 	64	 
	SECTION 7.8 Trustee May Deal in Notes
	 	 	64	 
	SECTION 7.9 Investment of Monies Held By Trustee
	 	 	64	 
	SECTION 7.10 Trustee Not Ordinarily Bound
	 	 	64	 
	SECTION 7.11 Trustee Not Required to Give Security
	 	 	65	 
	SECTION 7.12 Trustee Not Bound to Act on the Issuer’s Request
	 	 	65	 
	SECTION 7.13 Conditions Precedent to Trustee’s Obligations to Act Hereunder
	 	 	65	 
	SECTION 7.14 Compensation and Indemnity
	 	 	65	 
	SECTION 7.15 Acceptance of Trust
	 	 	66	 
	SECTION 7.16 Third Party Interests
	 	 	66	 
	SECTION 7.17 Anti-Money Laundering
	 	 	66	 
	SECTION 7.18 Privacy Laws
	 	 	66	 
	 
	 	 	 	 
	ARTICLE VIII DEFEASANCE; DISCHARGE OF THIS INDENTURE
	 	 	67	 
	SECTION 8.1 Option to Effect Defeasance
	 	 	67	 
	SECTION 8.2 Defeasance
	 	 	67	 
	SECTION 8.3 [Intentionally Omitted]
	 	 	67	 
	SECTION 8.4 Conditions to Defeasance
	 	 	67	 
	SECTION 8.5 Deposited Money to Be Held in Trust; Other Miscellaneous Provisions
	 	 	68	 
	SECTION 8.6 Repayment to Issuer
	 	 	68	 
	SECTION 8.7 Reinstatement
	 	 	69	 
	SECTION 8.8 Discharge
	 	 	69	 
	 
	 	 	 	 
	ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER
	 	 	70	 
	SECTION 9.1 Without Consent of Holders of the Notes
	 	 	70	 
	SECTION 9.2 With Consent of Holders of Notes
	 	 	70	 
	 
	 	 	 	 
	-iii-

 

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	SECTION 9.3 [Intentionally Omitted]
	 	 	71	 
	SECTION 9.4 Revocation and Effect of Consents
	 	 	71	 
	SECTION 9.5 Notation on or Exchange of Notes
	 	 	72	 
	SECTION 9.6
Trustee to Sign Amendments, Etc.
	 	 	72	 
	 
	 	 	 	 
	ARTICLE X GUARANTEES
	 	 	72	 
	SECTION 10.1 Guarantees
	 	 	72	 
	SECTION 10.2 Execution and Delivery of Guarantee
	 	 	73	 
	SECTION 10.3 Severability
	 	 	74	 
	SECTION 10.4 Limitation of Guarantors’ Liability
	 	 	74	 
	SECTION 10.5 Releases
	 	 	74	 
	SECTION 10.6 Benefits Acknowledged
	 	 	75	 
	SECTION 10.7 Expenses
	 	 	75	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS
	 	 	75	 
	SECTION 11.1 Trust Indenture Legislation
	 	 	75	 
	SECTION 11.2 Notices
	 	 	75	 
	SECTION 11.3 [Intentionally Omitted]
	 	 	77	 
	SECTION 11.4 [Intentionally Omitted]
	 	 	77	 
	SECTION 11.5 [Intentionally Omitted]
	 	 	77	 
	SECTION 11.6 Rules by Trustee and Agents
	 	 	77	 
	SECTION 11.7 No Personal Liability of Directors, Officers, Employees and Shareholders
	 	 	77	 
	SECTION 11.8 Applicable Law and Attornment
	 	 	77	 
	SECTION 11.9 [Intentionally Omitted]
	 	 	77	 
	SECTION 11.10 Successors
	 	 	77	 
	SECTION 11.11 Severability
	 	 	78	 
	SECTION 11.12 Counterpart Originals
	 	 	78	 
	SECTION
11.13 Table of Contents, Headings, Etc.
	 	 	78	 
	SECTION 11.14 Acts of Holders
	 	 	78	 
	SECTION 11.15 [Intentionally Omitted]
	 	 	79	 
	SECTION 11.16 [Intentionally Omitted]
	 	 	79	 
	SECTION 11.17 Documents in English
	 	 	79	 
	SECTION 11.18 Conversion of Currency
	 	 	79	 
	SECTION 11.19 Service of Process
	 	 	79	 
	SECTION 11.20 Legal Holidays
	 	 	79	 
	 
	 	 	 	 
	-iv-

 

 

Table of Contents

(continued)

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	SECTION 11.21 Time of Essence
	 	 	80	 

EXHIBITS

			
	Exhibit A	 	FORM OF NOTE

			
	Exhibit B	 	FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS

-v-

 

 

     This Indenture, dated as of March 15, 2011 is by and among Precision Drilling Corporation, a
corporation amalgamated under the laws of the Province of Alberta, the guarantors listed on the
signature pages hereto, and Valiant Trust Company, as trustee, transfer agent and registrar (the
“Trustee”).

     The Issuer, the Guarantors and the Trustee agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders (as defined herein) of (i) the Issuer’s 6.50%
Senior Notes due 2019 issued on the date hereof (the “Initial Notes”) and (ii) the Additional Notes
(as defined herein):

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

	 	 	SECTION 1.1 Definitions

     “Acquired Indebtedness” means:

     (1) with respect to any Person that becomes a Restricted Subsidiary after the Issue
Date, Indebtedness of such Person and its Subsidiaries (including, for the avoidance of
doubt, Indebtedness incurred in the ordinary course of such Person’s business to acquire
assets used or useful in its business) existing at the time such Person becomes a Restricted
Subsidiary; and

     (2) with respect to the Issuer or any Restricted Subsidiary, any Indebtedness of a
Person (including, for the avoidance of doubt, Indebtedness incurred in the ordinary course
of such Person’s business to acquire assets used or useful in its business), other than the
Issuer or a Restricted Subsidiary, existing at the time such Person is merged with or into
the Issuer or a Restricted Subsidiary, or Indebtedness expressly assumed by the Issuer or
any Restricted Subsidiary in connection with the acquisition of an asset or assets from
another Person.

     “Additional Notes” means Notes (other than the Initial Notes) issued pursuant to Article II
and otherwise in compliance with the provisions of this Indenture.

     “Affiliate” of any Person means any other Person which directly or indirectly controls or is
controlled by, or is under direct or indirect common control with, the referent Person. For
purposes of this definition, “control” of a Person shall mean the power to direct the management
and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

     “Agent” means any Registrar, transfer agent, co-registrar or other agent appointed pursuant to
this Indenture.

     “AIMCo” means Her Majesty the Queen in Right of the Province of Alberta, as represented by
Alberta Investment Management Corporation.

     “AIMCo Indenture” means the Note Indenture dated as of April 22, 2009 relating to the Issuer’s
10% Senior Unsecured Notes due April 22, 2017 and repaid on February 23, 2011.

     “AIMCo Warrants” means the 15,000,000 common share purchase warrants of the Issuer issued to
AIMCo, pursuant to an amended and restated warrant certificate dated June 1, 2010.

     “amend” means to amend, supplement, restate, amend and restate or otherwise modify, including
successively, and “amendment” shall have a correlative meaning.

 

 

     “Applicable Premium” means, with respect to any Note on any applicable redemption date, the
greater of:

     (1) 1.0% of the principal amount of such Note; and

     (2) the excess, if any, of:

     (a) the present value at such redemption date of (i) the redemption price of
such Note at March 15, 2015 (such redemption price being set forth in the table
appearing in Section 3.7(b)) plus (ii) all required interest payments (excluding
accrued and unpaid interest to such redemption date) due on such Note through March
15, 2015, computed using a discount rate equal to the Government of Canada Rate as
of such redemption date plus 100 basis points; over

     (b) the principal amount of such Note.

     “asset” means any asset or property, including, without limitation, Equity Interests.

     “Asset Acquisition” means:

     (1) an Investment by the Issuer or any Restricted Subsidiary of the Issuer in any other
Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary
of the Issuer, or shall be merged with or into the Issuer or any Restricted Subsidiary of
the Issuer; or

     (2) the acquisition by the Issuer or any Restricted Subsidiary of the Issuer of all or
substantially all of the assets of any other Person (other than a Restricted Subsidiary of
the Issuer) or any division or line of business of any such other Person (other than in the
ordinary course of business).

     “Asset Sale” means:

     (1) any sale, conveyance, transfer, lease, assignment or other disposition by the
Issuer or any Restricted Subsidiary to any Person other than the Issuer or any Restricted
Subsidiary (including by means of a sale and leaseback transaction or a merger or
consolidation), in one transaction or a series of related transactions, of any assets of the
Issuer or any of its Restricted Subsidiaries other than in the ordinary course of business;
or

     (2) any issuance of Equity Interests of a Restricted Subsidiary (other than Preferred
Shares of Restricted Subsidiaries issued in compliance with Section 4.9) to any Person other
than the Issuer or any Restricted Subsidiary in one transaction or a series of related
transactions (the actions described in these clauses (1) and (2), collectively, for purposes
of this definition, a “transfer”).

     For purposes of this definition, the term “Asset Sale” shall not include:

     (a) transfers of cash or Cash Equivalents;

     (b) transfers of assets (including Equity Interests) that are governed by, and made in
accordance with, Section 4.14 or Section 5.1;

     (c) Permitted Investments and Restricted Payments permitted under Section 4.7;

2

 

     (d) the creation of or realization on any Permitted Lien and any disposition of assets
resulting from the enforcement or foreclosure of any such Permitted Lien;

     (e) transfers of damaged, worn-out or obsolete equipment or assets that, in the
Issuer’s reasonable judgment, are no longer used or useful in the business of the Issuer or
its Restricted Subsidiaries;

     (f) sales or grants of licenses or sublicenses to use the patents, trade secrets,
know-how and other Intellectual Property, and licenses, leases or subleases of other assets,
of the Issuer or any Restricted Subsidiary to the extent not materially interfering with the
business of the Issuer and the Restricted Subsidiaries;

     (g) any sale, lease, conveyance or other disposition of any assets or any sale or
issuance of Equity Interests in each case, made pursuant to a Permitted Joint Venture
Investment;

     (h) a disposition of inventory in the ordinary course of business;

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

     (j) the trade or exchange by the Issuer or any Restricted Subsidiary of any asset for
any other asset or assets that are used in a Permitted Business; provided, that the Fair
Market Value of the asset or assets received by the Issuer or any Restricted Subsidiary in
such trade or exchange (including any cash or Cash Equivalents) is at least equal to the
Fair Market Value (as determined in good faith by the Board of Directors or an executive
officer of the Issuer or of such Restricted Subsidiary with responsibility for such
transaction, which determination shall be conclusive evidence of compliance with this
provision) of the asset or assets disposed of by the Issuer or any Restricted Subsidiary
pursuant to such trade or exchange; and, provided, further, that if any cash or Cash
Equivalents are used in such trade or exchange to achieve an exchange of equivalent value,
that the amount of such cash and/or Cash Equivalents received shall be deemed proceeds of an
“Asset Sale”, subject to the following clause (k); and

     (k) any transfer or series of related transfers that, but for this clause, would be
Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of
the assets transferred in such transaction or any such series of related transactions does
not exceed U.S.$10.0 million per occurrence or U.S.$20.0 million in any fiscal year.

     “Bankruptcy Law” means the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors
Arrangement Act (Canada) and the Winding Up and Restructuring Act (Canada), and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, winding-up, restructuring, examinership or
similar debtor relief laws of Canada or the United States of America (including Title 11, United
States Code) or other insolvency law in applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.

     “Beneficial Holder” means any Person who holds a beneficial interest in a Global Note as shown
on the books of the Depository or a Participant.

     “Board of Directors” means, with respect to any Person, (i) in the case of any corporation,
the board of directors of such Person and (ii) in any other case, the functional equivalent of the
foregoing or,

3

 

in each case, other than for purposes of the definition of “Change of Control”, any duly
authorized committee of such body.

     “Business Day” means a day other than a Saturday, Sunday or other day on which banking
institutions in Calgary, Alberta are authorized or required by law to close.

     “Canadian Securities Laws” means the securities acts or similar statutes of each of the
provinces of Canada and all regulations, rules, policy statements, notices and blanket orders or
rulings thereunder.

     “Capitalized Lease” means a lease required to be capitalized for financial reporting purposes
in accordance with GAAP. Notwithstanding the foregoing, any lease that was classified as an
operating lease by the Issuer on November 17, 2010 shall be deemed not to be a Capitalized Lease.

     “Capitalized Lease Obligations” of any Person means the obligations of such Person to pay rent
or other amounts under a Capitalized Lease, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.

     “Cash Equivalents” means:

     (1) marketable obligations issued or directly and fully guaranteed or insured by the
United States of America, the Canadian government or any agency or instrumentality thereof
(provided, that the full faith and credit of such government is pledged in support thereof),
maturing within one year of the date of acquisition thereof;

     (2) demand and time deposits and certificates of deposit of any lender under any Credit
Facility or any Eligible Bank organized under the laws of the United States, any state
thereof or the District of Columbia or under the laws of Canada or any province or territory
thereof or a U.S. or Canadian branch of any other Eligible Bank maturing within one year of
the date of acquisition thereof;

     (3) commercial paper issued by any Person incorporated in the United States or Canada
rated at least A1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof
by Moody’s or an equivalent rating by a nationally recognized rating agency if both S&P and
Moody’s cease publishing ratings of commercial paper issuers generally, and in each case
maturing not more than one year after the date of acquisition thereof;

     (4) repurchase obligations with a term of not more than one year for underlying
securities of the types described in clause (1) above entered into with any Eligible Bank
and maturing not more than one year after such time;

     (5) securities issued and fully guaranteed by any state, commonwealth or territory of
the United States of America, any province or territory of Canada or by any political
subdivision or taxing authority thereof, rated at least “A” by Moody’s or S&P and having
maturities of not more than one year from the date of acquisition;

     (6) investments in money market or other mutual funds substantially all of whose assets
comprise securities of the types described in clauses (1) through (5) above;

     (7) demand deposit accounts maintained in the ordinary course of business; and

4

 

     (8) in the case of any Subsidiary of the Issuer organized or having its principal place
of business outside the United States or Canada, investments denominated in the currency of
the jurisdiction in which such Subsidiary is organized or has its principal place of
business which are similar to the items specified in clauses (1) through (7) above.

     “CDS” means CDS Clearing and Depository Services Inc.

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

     (1) the direct or indirect sale, 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 of the Issuer and its Restricted Subsidiaries,
taken as a whole, to any Person;

     (2) any Person or group of Persons is or becomes the beneficial owner (with beneficial
ownership being defined and calculated as set forth in Section 1.8 of Multilateral
Instrument 62-104 Take-Over Bids and Issuer Bids) of, or controls, directly or indirectly,
Voting Shares representing 50.0% or more of the voting power of the total outstanding Voting
Shares of the Issuer;

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

     (4) the adoption by the shareholders of the Issuer of a Plan of Liquidation.

     For purposes of this definition, a Person shall not be deemed to have beneficial ownership of
securities subject to a stock or share purchase agreement, merger or amalgamation agreement or
similar agreement until the consummation of the transactions contemplated by such agreement.

     “Change of Control Offer” has the meaning set forth in Section 4.14.

     “Common Shares” means with respect to any Person, any and all shares, interest or other
participations in, and other equivalents (however designated and whether voting or nonvoting) in
the capital of such Person whether or not outstanding on the Issue Date, and includes, without
limitation, all series and classes of such common shares in the capital of such Person.

     “Consolidated Amortization Expense” for any period means the amortization expense of the
Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.

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

     (1) Consolidated Net Income, plus

5

 

     (2) in each case only to the extent (and in the same proportion) deducted in
determining Consolidated Net Income and with respect to the portion of Consolidated Net
Income attributable to any Restricted Subsidiary only if a corresponding amount would be
permitted at the date of determination to be distributed to such specified Person by such
Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to such Restricted Subsidiary or its
shareholders,

     (a) Consolidated Income Tax Expense,

     (b) Consolidated Amortization Expense (but only to the extent not included in
Consolidated Interest Expense),

     (c) Consolidated Depreciation Expense,

     (d) Consolidated Interest Expense,

     (e) all other non-cash items reducing the Consolidated Net Income (excluding
any non-cash charge that results in an accrual of a reserve for cash charges in any
future period) for such period,

     (f) the amount of any documented extraordinary, non-recurring or unusual
charges; provided, that the aggregate amount of such charges that may be added to
Consolidated Cash Flow pursuant to this clause (f) shall not exceed U.S.$25.0
million in any Four-Quarter Period, and

     (g) any expenses or charges (other than depreciation or amortization expense)
related to any Qualified Equity Offering, Permitted Investment, acquisition,
disposition, recapitalization, or the incurrence of Indebtedness permitted to be
incurred by this Indenture (including a refinancing thereof) (whether or not
successful), including: (i) such fees, expenses or charges related to the offering
of the Notes, the Unsecured Notes and the Credit Facilities and (ii) any amendment
or other modification of the Notes or the Unsecured Notes, and, in each case,
deducted in computing Consolidated Net Income provided, that the amount of such
expenses or charges that may be added to Consolidated Cash Flow pursuant to this
clause (g) shall not exceed U.S.$15.0 million per occurrence,

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

     (3) the aggregate amount of all non-cash items, determined on a consolidated basis, to
the extent such items increased Consolidated Net Income for such period (excluding any
non-cash items to the extent they represent the reversal of an accrual of a reserve for a
potential cash item that reduced Consolidated Cash Flow in any prior period);

     (4) any nonrecurring or unusual gain or income (or nonrecurring or unusual loss or
expense), together with any related provision for taxes on any such nonrecurring or unusual
gain or income (or the tax effect of any such nonrecurring or unusual loss or expense),
realized by the Issuer or any Restricted Subsidiary during such period; and

     (5) increased or decreased by (without duplication) any unrealized gain or loss
resulting in such period from Hedging Obligations.

6

 

     “Consolidated Depreciation Expense” for any period means the depreciation and depletion
expense of the Issuer and its Restricted Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.

     “Consolidated Income Tax Expense” for any period means the provision for taxes of the Issuer
and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP.

     “Consolidated Interest Coverage Ratio” means, on any date of determination, with respect to
any Person, the ratio of (x) Consolidated Cash Flow during the most recent four consecutive full
fiscal quarters for which financial statements prepared on a consolidated basis in accordance with
GAAP are available (the “Four-Quarter Period”) ending on or prior to the date of the transaction
giving rise to the need to calculate the Consolidated Interest Coverage Ratio (the “Transaction
Date”) to (y) Consolidated Interest Expense for the Four-Quarter Period. For purposes of this
definition, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated after
giving effect on a pro forma basis for the period of such calculation to:

     (1) the incurrence of any Indebtedness or the issuance of any Disqualified Equity
Interests of the Issuer or Disqualified Equity Interests or Preferred Shares of any
Restricted Subsidiary (and the application of the proceeds thereof) and any repayment,
repurchase or redemption of other Indebtedness or other Disqualified Equity Interests or
Preferred Shares (and the application of the proceeds therefrom) (other than the incurrence
or repayment of Indebtedness in the ordinary course of business for working capital purposes
pursuant to any revolving credit arrangement) occurring during the Four-Quarter Period or at
any time subsequent to the last day of the Four-Quarter Period and on or prior to the
Transaction Date, as if such incurrence, repayment, repurchase, issuance or redemption, as
the case may be (and the application of the proceeds thereof), occurred on the first day of
the Four-Quarter Period; and

     (2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of the Issuer or
any Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a
result of such Asset Acquisition) incurring Acquired Indebtedness and also including any
Consolidated Cash Flow (including any pro forma expense and cost reductions) occurring
during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter
Period and on or prior to the Transaction Date), as if such Asset Sale or Asset Acquisition
(including the incurrence of, or assumption or liability for, any such Indebtedness or
Acquired Indebtedness) occurred on the first day of the Four-Quarter Period; provided, that
such pro forma calculations shall be determined in good faith by a Responsible Financial or
Accounting Officer of the Issuer and shall be set forth in an Officers’ Certificate signed
by such Officer which states (a) the amount of such adjustment or adjustments, (b) that such
adjustment or adjustments are based on the reasonable good faith belief of the Issuer at the
time of such execution and (c) that the steps necessary for the realization of such
adjustments have been or are reasonably expected to be taken within 12 months following such
transaction.

     In calculating Consolidated Interest Expense for purposes of determining the denominator (but
not the numerator) of this Consolidated Interest Coverage Ratio:

     (1) interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be deemed to
have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date;

7

 

     (2) if interest on any Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor of a prime or similar rate,
a Eurocurrency interbank offered rate, or other rates, then the interest rate in effect on
the Transaction Date will be deemed to have been in effect during the Four-Quarter Period;
and

     (3) notwithstanding clause (1) or (2) above, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements relating to Hedging
Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect
to the operation of such agreements.

     “Consolidated Interest Expense” for any period means the sum, without duplication, of the
total interest expense of the Issuer and the Restricted Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP, including, without duplication:

     (1) imputed interest on Capitalized Lease Obligations;

     (2) commissions, discounts and other fees and charges owed with respect to letters of
credit securing financial obligations, bankers’ acceptance financing and receivables
financings;

     (3) the net costs associated with Hedging Obligations related to interest rates;

     (4) amortization of debt issuance costs, debt discount or premium and other financing
fees and expenses (other than the amortization or write off of any such costs, discounts,
premium, fees or expenses incurred under or in connection with Indebtedness outstanding or
available under the Credit Agreement as of the Issue Date or which was outstanding or
available under the Prior Credit Agreement or the AIMCo Indenture);

     (5) the interest portion of any deferred payment obligations;

     (6) all other non-cash interest expense;

     (7) capitalized interest;

     (8) all dividend payments on any series of Disqualified Equity Interests of the Issuer
or any of its Restricted Subsidiaries or any Preferred Shares of any Restricted Subsidiary
(other than dividends on Equity Interests payable solely in Qualified Equity Interests of
the Issuer or to the Issuer or a Restricted Subsidiary of the Issuer);

     (9) all interest payable with respect to discontinued operations; and

     (10) all interest on any Indebtedness described in clause (7) or (8) of the definition
of Indebtedness, and

excluding, without duplication,

     (1) the cumulative effect of any change in accounting principles or policies and

     (2) any penalties and interest related to the Contingent Tax Liabilities.

     “Consolidated Net Income” for any period means the net income (or loss) of such Person and its
Restricted Subsidiaries, in each case for such period determined on a consolidated basis in
accordance

8

 

with GAAP; provided that there shall be excluded from such net income (to the extent otherwise
included therein), without duplication:

     (1) the net income (or loss) of any Person (other than a Restricted Subsidiary) in
which any Person other than the Issuer and the Restricted Subsidiaries has an ownership
interest, except to the extent that cash in an amount equal to any such income has actually
been received by the Issuer or any of its Restricted Subsidiaries during such period;

     (2) except to the extent includible in the net income (or loss) of the Issuer pursuant
to the foregoing clause (1), the net income (or loss) of any Person that accrued prior to
the date that (a) such Person becomes a Restricted Subsidiary or is merged into or
consolidated with the Issuer or any Restricted Subsidiary or (b) the assets of such Person
are acquired by the Issuer or any Restricted Subsidiary;

     (3) the net income of any Restricted Subsidiary during such period to the extent that
the declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of that income is not permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary during such period, unless such restriction with respect to
the payment of dividends has been legally waived;

     (4) for the purposes of calculating the Restricted Payments Basket only, in the case of
a successor to the Issuer by merger, amalgamation, consolidation or transfer of its assets,
any income (or loss) of the successor prior to such merger, amalgamation, consolidation or
transfer of assets;

     (5) other than for purposes of calculating the Restricted Payments Basket, any gain (or
loss), together with any related provisions for taxes on any such gain (or the tax effect of
any such loss), realized during such period by the Issuer or any Restricted Subsidiary upon
(a) the acquisition of any securities, or the extinguishment of any Indebtedness, of the
Issuer or any Restricted Subsidiary or (b) any Asset Sale by the Issuer or any Restricted
Subsidiary;

     (6) gains and losses due solely to fluctuations in currency values and the related tax
effects according to GAAP;

     (7) unrealized gains and losses with respect to Hedging Obligations;

     (8) the cumulative effect of any change in accounting principles or policies;

     (9) extraordinary gains and losses and the related tax effect; and

     (10) any income tax expenses, penalties and interest related to the Contingent Tax
Liabilities.

     In addition, any return of capital with respect to an Investment that increased the Restricted
Payments Basket pursuant to Section 4.7(a)(3)(d) or decreased the amount of Investments outstanding
pursuant to clauses (11) or (17) of the definition of “Permitted Investments” shall be excluded
from Consolidated Net Income for purposes of calculating the Restricted Payments Basket.

     “Consolidated Tangible Assets” means, with respect to any Person as of any date, the amount
which, in accordance with GAAP, would be set forth under the caption “Total Assets” (or any like

9

 

caption) on a consolidated balance sheet of such Person and its Restricted Subsidiaries,
without giving effect to any writedowns or charges, up to an aggregate amount of U.S.$300.0
million, caused by the Issuer’s adoption of IFRS as of January 1, 2011, less, to the extent
included in a determination of “Total Assets”, and without duplication, all goodwill, patents,
tradenames, trademarks, copyrights, franchises, experimental expenses, organization expenses and
any other amounts classified as intangible assets in accordance with GAAP.

     “Contingent Tax Liabilities” means the contingent tax liabilities disclosed in Note 10 to the
financial statements of the Issuer as of and for the nine months ended September 30, 2010.

     “Corporate Trust Office” means the office of the Trustee at which at any time its corporate
trust business shall be principally administered, which office as of the date hereof is located at
Valiant Trust Company, 310, 606-4th Street SW, Calgary, AB T2P 1T1, Attention: Corporate Trust
Department, or such other address as the Trustee may designate from time to time by notice to the
Holders and the Issuer, or the corporate trust office of any successor trustee (or such other
address as such successor trustee may designate from time to time by notice to the Holders and the
Issuer).

     “Coverage Ratio Exception” has the meaning set forth in the proviso in Section 4.9(a).

     “Credit Agreement” means the Credit Agreement entered into on November 17, 2010 by and among
the Issuer, as borrower, Royal Bank of Canada, as administration agent, and the several lenders and
other agents party thereto, including any notes, guarantees, collateral and security documents,
instruments and agreements executed in connection therewith (including Hedging Obligations related
to the Indebtedness incurred thereunder), and in each case as such agreement or facility may be
amended (including any amendment or restatement thereof), supplemented or otherwise modified from
time to time, including any agreement or indenture exchanging, extending the maturity of,
refinancing, renewing, replacing, substituting or otherwise restructuring, whether in the bank or
debt capital markets (or combination thereof) (including increasing the amount of available
borrowings thereunder or adding or removing Subsidiaries as borrowers or guarantors thereunder) all
or any portion of the Indebtedness under such agreement or facility or any successor or replacement
agreement or facility.

     “Credit Facilities” means one or more debt facilities or indentures (which may be outstanding
at the same time and including, without limitation, the Credit Agreement) providing for revolving
credit loans, debt securities, term loans, receivables financing or letters of credit and, in each
case, as such agreements may be amended, refinanced, restated, refunded or otherwise restructured,
in whole or in part from time to time (including increasing the amount of available borrowings
thereunder or adding Subsidiaries of the Issuer as additional borrowers or guarantors thereunder)
with respect to all or any portion of the Indebtedness under such agreement or agreements or any
successor or replacement agreement or agreements and whether by the same or any other agent,
lender, group of lenders or institutional lenders or investors.

     “Default” means (1) any Event of Default or (2) any event, act or condition that, after notice
or the passage of time or both, would be an Event of Default.

     “Depository” means, with respect to the Notes issuable or issued in the form of one or more
Global Notes, the Person designated as Depository by the Issuer pursuant to this Indenture until a
successor Depository shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Depository” shall mean each Person who is then a Depository under this
Indenture.

     “Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration
received by the Issuer or a Restricted Subsidiary in connection with an Asset Sale that is so
designated as

10

 

Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the
basis of such valuation, executed by the Chief Financial Officer of the Issuer, less the amount of
cash or Cash Equivalents received in connection with a subsequent sale of or collection on such
Designated Non-cash Consideration.

     “Designation” has the meaning set forth in Section 4.18.

     “Designation Amount” has the meaning set forth in Section 4.18.

     “Disqualified Equity Interests” of any Person means any class of Equity Interests of such
Person that, by its terms, or by the terms of any related agreement or of any security into which
it is convertible, puttable or exchangeable (in each case, at the option of the holder thereof),
is, or upon the happening of any event or the passage of time would be, required to be redeemed by
such Person, at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91
days after the Stated Maturity of the Notes; provided, however, that any class of Equity Interests
of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with
respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or
otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not
Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for
Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity
Interests so long as such Person satisfies its obligations with respect thereto solely by the
delivery of Equity Interests that are not Disqualified Equity Interests; provided, further,
however, that any Equity Interests that would not constitute Disqualified Equity Interests but for
provisions thereof giving holders thereof (or the holders of any security into or for which such
Equity Interests are convertible, exchangeable or exercisable) the right to require the Issuer to
repurchase or redeem such Equity Interests upon the occurrence of a change in control or an Asset
Sale occurring prior to the 91st day after the Stated Maturity of the Notes shall not constitute
Disqualified Equity Interests if the change of control or asset sale provisions applicable to such
Equity Interests are no more favourable to such holders than Section 4.14 and Section 4.10,
respectively, and such Equity Interests specifically provide that the Issuer will not repurchase or
redeem any such Equity Interests pursuant to such provisions prior to the Issuer’s purchase of the
Notes as required pursuant to Section 4.14 and Section 4.10, respectively.

     “Dollars”, “Canadian dollars” and “$” means dollars in the lawful currency of Canada.

     “Eligible Bank” shall mean any commercial bank having, or which is the principal banking
subsidiary of a bank holding company having, capital and surplus aggregating in excess of
U.S.$5,000.0 million (or in the equivalent thereof in a currency other than U.S. Dollars as of the
date of determination) and a rating of “A” (or such other similar equivalent rating) or higher by
at least one nationally recognized statistical rating organization.

     “Equity Interests” of any Person means (1) any and all shares or other equity interests
(including Common Shares, Preferred Shares, limited liability company interests, trust units and
partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether
or not currently exercisable), participations or other equivalents of or interests in (however
designated) such shares or other interests in such Person, but excluding from all of the foregoing
any debt securities convertible into Equity Interests, regardless of whether such debt securities
include any right of participation with Equity Interests.

     “Fair Market Value” means, with respect to any asset, the price (after taking into account any
liabilities relating to such asset) that would be negotiated in an arm’s-length transaction for
cash between a willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the

11

 

transaction as such price is determined in good faith by (a) in the case of an asset whose
price would be greater than U.S.$50.0 million, the Board of Directors of the Issuer or a duly
authorized committee thereof, as evidenced by a resolution of such Board of Directors or committee
and (b) in all other cases, management of the Issuer.

     “Foreign Restricted Subsidiary” means any Restricted Subsidiary not organized or existing
under the laws of the United States, any state thereof, the District of Columbia or Canada or any
province or territory thereof.

     “GAAP” means generally accepted accounting principles in Canada set forth in the opinions and
pronouncements of the Accounting Principles Board of the Canadian Institute of Chartered
Accountants, which were in effect on November 17, 2010 (“Canadian GAAP”). At any time after the
adoption of IFRS by the Issuer for its financial statements and reports for all financial reporting
purposes, the Issuer may elect to apply for all purposes of this Indenture, in lieu of Canadian
GAAP, IFRS, and, upon any such election, references herein to GAAP shall be construed to mean IFRS
as in effect when such election is made; provided that (1) any such election once made shall be
irrevocable (and shall only be made once), (2) all financial statements and reports required to be
provided after such election pursuant to this Indenture shall be prepared on the basis of IFRS and
(3) from and after such election, all ratios, computations and other determinations (A) based on
GAAP contained in this Indenture shall be computed in conformity with IFRS (other than as set forth
in the applicable definitions herein) and (B) in this Indenture that require the application of
GAAP for periods that include fiscal quarters ended prior to the Issuer’s election to apply IFRS
shall remain as previously calculated or determined in accordance with GAAP. The Issuer shall give
written notice of any election to the Trustee and the Holders within 15 days of such election. For
the avoidance of doubt, solely making an election (without any other action) referred to in this
definition will not be treated as an incurrence of Indebtedness.

     “Global Note Legend” means the legend identified as such in Exhibit A.

     “Global Notes” means the Notes that are in the form of Exhibit A issued in global form
and registered in the name of the Depository or its nominee.

     “Government of Canada Rate” means, in respect of any redemption date, the rate per annum equal
to the arithmetic average of the interest rates quoted to the Issuer by two major Canadian
investment dealers designated by the Issuer as being the annual yield to maturity, compounded
semi-annually and calculated in accordance with generally accepted financial practice, on the
second Business Day prior to such redemption date, which a non-callable actively traded Government
of Canada bond would carry if issued, in Canadian dollars in Canada, at 100% of its principal
amount having a maturity most nearly equal to the period from the redemption date to March 15, 2015
that would be utilized at the time of selection and in accordance with generally accepted financial
practice, in pricing new issues of corporate debt securities of comparable maturity to the period
from the redemption date to March 15, 2015.

     “guarantee” means a direct or indirect guarantee by any Person of any Indebtedness of any
other Person and includes any obligation, direct or indirect, contingent or otherwise, of such
Person (1) to purchase or pay (or advance or supply funds for the purchase or payment of)
Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase
arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to
take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part); “guarantee”, when
used as a verb, and “guaranteed” have correlative meanings.

12

 

     “Guarantee” means, individually, any guarantee of payment of the Notes by a Guarantor pursuant
to the terms of this Indenture and any supplemental indenture hereto, and, collectively, all such
guarantees.

     “Guarantors” means each Restricted Subsidiary of the Issuer on the Issue Date that is a
guarantor of the Issuer’s obligations under the Credit Agreement or the Unsecured Note Indenture,
and each other Person that is required to, or at the election of the Issuer, does become a
Guarantor by the terms of this Indenture after the Issue Date, in each case, until such Person is
released from its Guarantee in accordance with the terms of this Indenture.

     “Hedging Obligations” of any Person means the obligations of such Person under swap, cap,
collar, forward purchase or similar agreements or arrangements dealing with interest rates or
currency exchange rates or commodity prices (including, without limitation, for purposes of this
definition, rates for electrical power used in the ordinary course of business), either generally
or under specific contingencies.

     “Holder” means any registered holder, from time to time, of the Notes.

     “IFRS” means International Financial Reporting Standards, as issued by the International
Accounting Standards Board.

     “incur” means, with respect to any Indebtedness or Obligation, incur, create, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with
respect to such Indebtedness or Obligation; provided that (1) the Indebtedness of a Person existing
at the time such Person became a Restricted Subsidiary of the Issuer shall be deemed to have been
incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the Issuer
and (2) neither the accrual of interest nor the accretion of original issue discount or the
accretion or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence
of Indebtedness.

     “Indebtedness” of any Person at any date means, without duplication:

     (1) all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof);

     (2) all obligations of such Person evidenced by bonds, debentures, banker’s
acceptances, notes or other similar instruments;

     (3) all reimbursement obligations of such Person in respect of letters of credit,
letters of guaranty and similar credit transactions;

     (4) all obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except deferred compensation, trade payables and accrued expenses
incurred by such Person in the ordinary course of business in connection with obtaining
goods, materials or services and not overdue by more than 180 days unless subject to a bona
fide dispute;

     (5) the maximum fixed redemption or repurchase price of all Disqualified Equity
Interests of such Person or, with respect to any Subsidiary that is not a Guarantor, any
Preferred Shares;

     (6) all Capitalized Lease Obligations of such Person;

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     (7) all Indebtedness of others secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person;

     (8) all Indebtedness of others guaranteed by such Person to the extent of such
guarantee; provided that Indebtedness of the Issuer or its Subsidiaries that is guaranteed
by the Issuer or the Issuer’s Subsidiaries shall only be counted once in the calculation of
the amount of Indebtedness of the Issuer and its Subsidiaries on a consolidated basis;

     (9) to the extent not otherwise included in this definition, Hedging Obligations of
such Person; and

     (10) all obligations of such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person.

The amount of any Indebtedness which is incurred at a discount to the principal amount at maturity
thereof as of any date shall be deemed to have been incurred at the accreted value thereof as of
such date. The amount of Indebtedness of any Person at any date shall be the outstanding balance
at such date of all unconditional obligations as described above, the maximum liability of such
Person for any such contingent obligations at such date and, in the case of clause (7), the lesser
of (a) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of others on
the date that the Lien attaches and (b) the amount of the Indebtedness secured. For purposes of
clause (5), the “maximum fixed redemption or repurchase price” of any Disqualified Equity Interests
that do not have a fixed redemption or repurchase price shall be calculated in accordance with the
terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were redeemed
or repurchased on any date on which an amount of Indebtedness outstanding shall be required to be
determined pursuant to this Indenture.

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

     “Independent Director” means a director of the Issuer who:

     (1) is independent with respect to the transaction at issue;

     (2) does not have any material financial interest in the Issuer or any of its
Affiliates (other than as a result of holding securities of the Issuer); and

     (3) has not, and whose Affiliates or affiliated firm have not, at any time during the
twelve months prior to the taking of any action hereunder, directly or indirectly, received,
or entered into any understanding or agreement to receive, any compensation, payment or
other benefit, of any type or form, from the Issuer or any of their respective Affiliates,
other than customary directors’ fees for serving on the Board of Directors of the Issuer or
any Affiliate and reimbursement of out-of-pocket expenses for attendance at the Issuer’s or
any of their respective Affiliates’ board and board committee meetings.

     “Initial Notes” has the meaning set forth in the preamble hereto.

     “Intellectual Property” means all patents, patent applications, trademarks, trade names,
service marks, copyrights, technology, trade secrets, proprietary information, domain names,
know-how and processes necessary for the conduct of the Issuer’s or any Restricted Subsidiary’s
business.

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     “Investments” of any Person means:

     (1) all direct or indirect investments by such Person in any other Person (including
Affiliates) in the form of loans, advances or capital contributions or other credit
extensions constituting Indebtedness of such other Person, and any guarantee of Indebtedness
of any other Person;

     (2) all purchases (or other acquisitions for consideration) by such Person of
Indebtedness, Equity Interests or other securities of any other Person (other than any such
purchase that constitutes a Restricted Payment of the type described in clause (2) of the
definition thereof);

     (3) all other items that would be classified as investments on a balance sheet of such
Person prepared in accordance with GAAP (including, if required by GAAP, purchases of assets
outside the ordinary course of business); and

     (4) the Designation of any Subsidiary as an Unrestricted Subsidiary.

     Except as otherwise expressly specified in this definition, the amount of any Investment
(other than an Investment made in cash) shall be the Fair Market Value thereof on the date such
Investment is made. The amount of an Investment pursuant to clause (4) shall be the Designation
Amount determined in accordance with Section 4.18. If the Issuer or any Restricted Subsidiary
sells or otherwise disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted
Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary, the Issuer shall be deemed to have made
an Investment on the date of any such sale or other disposition equal to the Fair Market Value of
the Equity Interests of and all other Investments in such Restricted Subsidiary retained.
Notwithstanding the foregoing, purchases or redemptions of Equity Interests of the Issuer shall be
deemed not to be Investments.

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

     “Issuer” means Precision Drilling Corporation, a corporation amalgamated under the laws of the
Province of Alberta, and any successor Person resulting from any transaction permitted by Section
5.1.

     “Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or
other), pledge, lease, easement, restriction, covenant, charge, security interest or other
encumbrance of any kind or nature 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, but excluding, for certainty, deemed security interests arising under Section
1(1)(tt)(ii) of the Personal Property Security Act (Alberta) or similar legislation with respect to
transfers of accounts, consignments of goods and leases with a term of more than one year that are
not capital leases and do not secure performance of a payment or other obligation.

     “Moody’s” means Moody’s Investors Service, Inc. and its successors.

     “Net Available Proceeds” means, with respect to any Asset Sale, the proceeds thereof in the
form of cash or Cash Equivalents received by the Issuer or any of its Restricted Subsidiaries from
such Asset Sale, net of:

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     (1) brokerage commissions and other fees and expenses (including fees, discounts and
expenses of legal counsel, accountants and investment banks, consultants and placement
agents) of such Asset Sale;

     (2) provisions for taxes payable (including any withholding or other taxes paid or
reasonably estimated to be payable in connection with the transfer to the Issuer of such
proceeds from any Restricted Subsidiary that received such proceeds) as a result of such
Asset Sale (after taking into account any available tax credits or deductions and any tax
sharing arrangements);

     (3) amounts required to be paid to any Person (other than the Issuer or any Restricted
Subsidiary and other than under a Credit Facility) owning a beneficial interest in the
assets subject to the Asset Sale or having a Lien thereon;

     (4) payments of unassumed liabilities (not constituting Indebtedness) relating to the
assets sold at the time of, or within 30 days after the date of, such Asset Sale; and

     (5) appropriate amounts to be provided by the Issuer or any Restricted Subsidiary, as
the case may be, as a reserve required in accordance with GAAP against any adjustment in the
sale price of such asset or assets or liabilities associated with such Asset Sale and
retained by the Issuer or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including pensions and other post-employment benefit liabilities, liabilities related
to environmental matters and liabilities under any indemnification obligations associated
with such Asset Sale, all as reflected in an Officers’ Certificate delivered to the Trustee;
provided, however, that any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Available Proceeds.

     “Net Proceeds Offer” has the meaning set forth in Section 4.10(c).

     “Non-Recourse Debt” means Indebtedness of an Unrestricted Subsidiary:

     (1) as to which neither the Issuer nor any Restricted Subsidiary (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) constitutes the lender; and

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

     “Notes” means the Initial Notes and any Additional Notes. The Initial Notes and the
Additional Notes, if any, shall be treated as a single class for all purposes under this Indenture.

     “Obligation” means any principal, interest, penalties, fees, indemnification, reimbursements,
costs, expenses, damages and other liabilities payable under the documentation governing any
Indebtedness.

     “Offering Memorandum” means the Issuer’s offering memorandum, dated March 10, 2011, relating
to the offer and sale of the Initial Notes.

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     “Officer” means any of the following of the Issuer or any Guarantor: the Chairman of the
Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any
Vice President, any trustee, the Treasurer or the Secretary.

     “Officers’ Certificate” means a certificate signed by two Officers that meets the requirements
of Section 7.5 of this Indenture.

     “Opinion of Counsel” means a written opinion from legal counsel reasonably acceptable to the
Trustee. The counsel may be an employee of or counsel to the Issuer or the Trustee.

     “Pari Passu Indebtedness” means any Indebtedness of the Issuer or any Guarantor that ranks
pari passu in right of payment with the Notes or the Guarantees, as applicable.

     “Participant” means, with respect to the Depository, a Person who has an account with the
Depository.

     “Permitted Business” means the businesses engaged in by the Issuer and its Subsidiaries on the
Issue Date as described in the Offering Memorandum and businesses that are reasonably related,
incidental or ancillary thereto or reasonable extensions thereof (other than, in each case,
material exploration or production businesses).

     “Permitted Investment” means:

     (1) Investments by the Issuer or any Restricted Subsidiary in (a) any Restricted
Subsidiary or (b) any Person that will become immediately after such Investment a Restricted
Subsidiary or that will merge or consolidate into the Issuer or any Restricted Subsidiary;
provided the surviving or continuing Person of such merger or consolidation is either the
Issuer or a Restricted Subsidiary;

     (2) Investments in the Issuer by any Restricted Subsidiary;

     (3) loans and advances to directors, employees and officers of the Issuer and its
Restricted Subsidiaries (i) in the ordinary course of business (including payroll, travel
and entertainment related advances) (other than any loans or advances to any director or
executive officer (or equivalent thereof) that would be in violation of applicable
securities law and (ii) to purchase Equity Interests of the Issuer not in excess of U.S.$2.5
million individually and U.S.$5.0 million in the aggregate outstanding at any one time;

     (4) Hedging Obligations entered into in the ordinary course of business for bona fide
hedging purposes of the Issuer or any Restricted Subsidiary not for the purpose of
speculation;

     (5) Investments in cash and Cash Equivalents;

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

     (7) Investments in securities of trade creditors or customers received pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade

17

 

creditors or customers or received in compromise or resolution of litigation,
arbitration or other disputes with such parties;

     (8) Investments made by the Issuer or any Restricted Subsidiary as a result of
consideration received in connection with an Asset Sale made in compliance with Section
4.10;

     (9) lease, utility and other similar deposits in the ordinary course of business;

     (10) stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Issuer or any Restricted Subsidiary or in
satisfaction of judgments;

     (11) Permitted Joint Venture Investments made by the Issuer or any of its Restricted
Subsidiaries, in an aggregate amount (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 (11), that does not exceed U.S.$50.0 million;

     (12) guarantees of Indebtedness of the Issuer or any of its Restricted Subsidiaries
permitted in accordance with Section 4.9;

     (13) repurchases of, or other Investments in, the Notes;

     (14) advances or extensions of credit in the nature of accounts receivable arising from
the sale or lease of goods or services, the leasing of equipment or the licensing of
property in the ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided that such trade terms may include such concessionary trade
terms as the Issuer or the applicable Restricted Subsidiary deems reasonable under the
circumstances;

     (15) Investments existing on the Issue Date;

     (16) Investments the payment for which consists of Equity Interests (exclusive of
Disqualified Equity Interests) of the Issuer; provided, however, that such Equity Interests
will not increase the amount available for Restricted Payments under the Restricted Payments
Basket;

     (17) other Investments in any Person having an aggregate Fair Market Value (measured on
the date each such Investment was made and without giving effect to subsequent changes in
value) that, when taken together with all other Investments made pursuant to this clause
(17) since the Issue Date, do not exceed the greater of (a) U.S.$150.0 million or (b) 5.0%
of the Issuer’s Consolidated Tangible Assets; and

     (18) performance guarantees of any trade or non-financial operating contract (other
than such contract that itself constitutes Indebtedness) in the ordinary course of business.

     In determining whether any Investment is a Permitted Investment, the Issuer may allocate or
reallocate all or any portion of an Investment among the clauses of this definition and any of the
provisions of Section 4.7.

     “Permitted Joint Venture Investment” means, with respect to an Investment by any specified
Person, an Investment by such specified Person in any other Person engaged in a Permitted Business
(a) over which the specified Person is responsible (either directly or through a services
agreement) for day-to-day operations or otherwise has operational and managerial control of such
other Person, or veto power

18

 

over significant management decisions affecting such other Person and (b) of which at least
20.0% of the outstanding Equity Interests of such other Person is at the time owned directly or
indirectly by the specified Person.

     “Permitted Liens” means the following types of Liens:

     (1) Liens for taxes, assessments or governmental charges or levies not yet due and
payable or delinquent or that are being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are maintained on the books of the
Issuer or its Restricted Subsidiaries, as the case may be, in conformity with GAAP;

     (2) Liens in respect of property of the Issuer or any Restricted Subsidiary imposed by
law or contract, which were not incurred or created to secure Indebtedness for borrowed
money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’,
repairmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of
business, and which do not in the aggregate materially detract from the value of the
property of the Issuer or its Restricted Subsidiaries, taken as a whole, and do not
materially impair the use thereof in the operation of the business of the Issuer and its
Restricted Subsidiaries, taken as a whole;

     (3) pledges or deposits made in connection therewith in the ordinary course of business
in connection with workers’ compensation, unemployment insurance, road transportation and
other types of social security, regulations;

     (4) Liens (i) incurred in the ordinary course of business to secure the performance of
tenders, bids, trade contracts, stay and customs bonds, leases, statutory obligations,
surety and appeal bonds, statutory bonds, government contracts, performance and return money
bonds and other similar obligations (exclusive of obligations for the payment of borrowed
money) or (ii) incurred in the ordinary course of business to secure liability for premiums
to insurance carriers;

     (5) Liens upon specific items of inventory or other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or created for
the account of such Person to facilitate the purchase, shipment or storage of such inventory
or other goods;

     (6) Liens arising out of judgments or awards not resulting in a Default or an Event of
Default so long as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment have not been finally
terminated or the period within which such proceedings may be initiated has not expired;

     (7) easements, rights of way, restrictions (including zoning restrictions), covenants,
encroachments, protrusions and other similar charges or encumbrances, and minor title
deficiencies on or with respect to any Real Property, in each case whether now or hereafter
in existence, not (i) securing Indebtedness and (ii) in the aggregate materially interfering
with the conduct of the business of the Issuer and its Restricted Subsidiaries and not
materially impairing the use of such Real Property in such business;

     (8) Liens securing reimbursement obligations with respect to commercial letters of
credit which encumber documents and other assets relating to such letters of credit and
products and proceeds thereof;

19

 

     (9) Liens encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements of the Issuer or any Restricted Subsidiary,
including rights of offset and setoff;

     (10) bankers’ Liens, rights of setoff and other similar Liens existing solely with
respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the
Issuer or any Restricted Subsidiary, in each case granted in the ordinary course of business
in favour of the bank or banks with which such accounts are maintained, securing amounts
owing to such bank with respect to cash management and operating account arrangements,
including those involving pooled accounts and netting arrangements;

     (11) any interest or title of a lessor under any lease entered into by the Issuer or
any Restricted Subsidiary, in the ordinary course so long as such leases do not,
individually or in the aggregate, (i) interfere in any material respect with the ordinary
conduct of the business of the Issuer or any Restricted Subsidiary or (ii) materially impair
the use (for its intended purposes) or the value of the property subject thereto;

     (12) the filing of UCC financing statements solely as a precautionary measure in
connection with operating leases, consignments of goods or transfers of accounts or the
filing of Personal Property Security Act financing statements in connection with operating
leases, consignments of goods or transfers of accounts, in each case to the extent not
securing performance of a payment or other obligation;

     (13) Liens securing all of the Notes and Liens securing any Guarantee (which Liens may
also secure the Unsecured Notes and guarantees thereof provided such Liens also secure the
Notes and any Guarantee on at least an equal and rateable basis);

     (14) Liens securing Hedging Obligations entered into for bona fide hedging purposes of
the Issuer or any Restricted Subsidiary not for the purpose of speculation;

     (15) Liens existing on the Issue Date securing Indebtedness outstanding on the Issue
Date; provided that (i) the aggregate principal amount of the Indebtedness, if any, secured
by such Liens does not increase; and (ii) such Liens do not encumber any property other than
the property subject thereto on the Issue Date (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof);

     (16) Liens in favour of the Issuer or a Guarantor;

     (17) Liens securing Indebtedness under the Credit Facilities incurred and then
outstanding pursuant to Section 4.9(b)(1) and related Hedging Obligations;

     (18) Liens arising pursuant to Purchase Money Indebtedness incurred pursuant to Section
4.9(b)(8); provided that (i) the Indebtedness secured by any such Lien (including
refinancings thereof) does not exceed 100.0% of the cost of the property being acquired or
leased at the time of the incurrence of such Indebtedness and (ii) any such Liens attach
only to the property being financed pursuant to such Purchase Money Indebtedness (plus
improvements, accessions, proceeds or dividends or distributions in respect thereof) and do
not encumber any other property of the Issuer or any Restricted Subsidiary.

     (19) Liens securing Acquired Indebtedness permitted to be incurred under this
Indenture; provided that such Indebtedness was not incurred in connection with, or in

20

 

contemplation of, such Person becoming a Restricted Subsidiary or being acquired or
merged into the Issuer or a Restricted Subsidiary of the Issuer and the Liens do not extend
to assets not subject to such Lien at the time of acquisition (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof) and are no more
favourable in any material respect to the lienholders than those securing such Acquired
Indebtedness prior to the incurrence of such Acquired Indebtedness by the Issuer or a
Restricted Subsidiary;

     (20) Liens on property of a Person existing at the time such Person is acquired or
amalgamated or merged with or into or consolidated with the Issuer or any Restricted
Subsidiary (and not created in anticipation or contemplation thereof); provided that such
Liens do not extend to property not subject to such Liens at the time of acquisition (plus
improvements, accessions, proceeds or dividends or distributions in respect thereof) and are
no more favourable in any material respect to the lienholders than the existing Lien;

     (21) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred
to in the foregoing clauses (15), (18), (19), (20) and this clause (21); provided that such
Liens do not extend to any additional assets (other than improvements thereon and
replacements thereof);

     (22) licenses of Intellectual Property granted by the Issuer or any Restricted
Subsidiary in the ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of the Issuer or such Restricted Subsidiary;

     (23) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by Issuer or any Restricted Subsidiary in
the ordinary course of business;

     (24) Liens in favour of the Trustee as provided for in this Indenture on money or
property held or collected by the Trustee in its capacity as Trustee;

     (25) Liens securing Specified Cash Management Agreements entered into in the ordinary
course of business;

     (26) Liens on assets of any Foreign Restricted Subsidiary to secure Indebtedness of
such Foreign Restricted Subsidiary which Indebtedness is permitted by this Indenture;

     (27) Liens securing Indebtedness incurred under Section 4.9(b)(16); and

     (28) other Liens with respect to obligations which do not in the aggregate exceed the
greater of (a) U.S.$150.0 million or (b) 5.0% of the Issuer’s Consolidated Tangible Assets
at any time outstanding.

     “Person” means any individual, corporation, partnership, limited liability company, joint
venture, incorporated or unincorporated association, joint-stock company, trust, mutual fund trust,
unincorporated organization or government or other agency or political subdivision thereof or other
legal entity of any kind.

     “Plan of Liquidation” with respect to any Person, means a plan that provides for, contemplates
or the effectuation of which is preceded or accompanied by (whether or not substantially
contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other disposition
of all or substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety;

21

 

and (2) the distribution of all or substantially all of the proceeds of such sale, lease,
conveyance or other disposition of all or substantially all of the remaining assets of such Person
to holders of Equity Interests of such Person.

     “Preferred Shares” means, with respect to any Person, any and all preferred or preference
shares or other Equity Interests (however designated) of such Person whether now outstanding or
issued after the Issue Date that is preferred as to the payment of dividends upon liquidation,
dissolution or winding up.

     “principal” means, with respect to the Notes, the principal of, and premium, if any, on the
Notes.

     “Prior Credit Agreement” means the Credit Agreement dated as of December 23, 2008 among the
Issuer, the lenders party thereto, the co-documentation agents and syndication agent named therein,
and Royal Bank of Canada, as administrative agent, as amended and supplemented from time to time.

     “Privacy Laws” has the meaning set forth in Section 7.18.

     “Purchase Money Indebtedness” means Indebtedness, including Capitalized Lease Obligations, of
the Issuer or any Restricted Subsidiary incurred for the purpose of financing all or any part of
the purchase price of property, plant or equipment used in the business of the Issuer or any
Restricted Subsidiary or the cost of installation, construction or improvement thereof; provided,
however, that (except in the case of Capitalized Lease Obligations) the amount of such Indebtedness
shall not exceed such purchase price or cost.

     “Qualified Equity Interests” of any Person means Equity Interests of such Person other than
Disqualified Equity Interests; provided that such Equity Interests shall not be deemed Qualified
Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed, directly or
indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person until and to
the extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by such
Person or any Subsidiary of such Person (including, without limitation, in respect of any employee
stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to
Qualified Equity Interests of the Issuer.

     “Qualified Equity Offering” means the issuance and sale of Qualified Equity Interests of the
Issuer (or any direct or indirect parent of the Issuer to the extent the net proceeds therefrom are
contributed to the common equity capital of the Issuer or used to purchase Qualified Equity
Interests of the Issuer), other than (a) any issuance pursuant to employee benefit plans or
otherwise in compensation to officers, directors, trustees or employees, (b) public offerings with
respect to the Issuer’s Qualified Equity Interests, or the issuance by the Issuer of options,
warrants or rights to acquire Common Shares, or (c) any offering of Qualified Equity Interests
issued in connection with a transaction that constitutes a Change of Control.

     “Real Property” means, collectively, all right, title and interest (including any leasehold
estate) in and to any and all parcels of or interests in real property owned, leased or operated by
any Person, whether by lease, license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and
equipment, all general intangibles and contract rights and other property and rights incidental to
the ownership, lease or operation thereof.

     “Redesignation” has the meaning set forth in Section 4.18.

     “refinance” means to refinance, repay, prepay, replace, renew or refund.

22

 

     “Refinancing Indebtedness” means Indebtedness or Disqualified Equity Interests of the Issuer
or a Restricted Subsidiary incurred in exchange for, or the proceeds of which are used to redeem,
refinance, replace, defease, discharge, refund or otherwise retire for value, in whole or in part,
any Indebtedness of the Issuer or any Restricted Subsidiary (the “Refinanced Indebtedness”);
provided that:

     (1) the principal amount (and accreted value, in the case of Indebtedness issued at a
discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted
value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and
unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders
of the Refinanced Indebtedness and reasonable expenses incurred in connection with the
incurrence of the Refinancing Indebtedness;

     (2) the obligor of the Refinancing Indebtedness does not include any Person (other than
the Issuer or any Guarantor) that is not an obligor of the Refinanced Indebtedness;

     (3) if the Refinanced Indebtedness was subordinated in right of payment to the Notes or
the Guarantees, as the case may be, then such Refinancing Indebtedness, by its terms, is
subordinate in right of payment to the Notes or the Guarantees, as the case may be, at least
to the same extent as the Refinanced Indebtedness;

     (4) the Refinancing Indebtedness has a Stated Maturity either (a) no earlier than the
Refinanced Indebtedness being repaid or amended or (b) no earlier than 91 days after the
maturity date of the Notes;

     (5) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on
or prior to the maturity date of the Notes has a Weighted Average Life to Maturity at the
time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted
Average Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is
scheduled to mature on or prior to the maturity date of the Notes; and

     (6) the proceeds of the Refinancing Indebtedness shall be used substantially
concurrently with the incurrence thereof to redeem, refinance, replace, defease, discharge,
refund or otherwise retire for value the Refinanced Indebtedness, unless the Refinanced
Indebtedness is not then due and is not redeemable or prepayable at the option of the
obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds
shall be held in a segregated account of the obligor of the Refinanced Indebtedness until
the Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period
lapses and then shall be used to refinance the Refinanced Indebtedness; provided that in any
event the Refinanced Indebtedness shall be redeemed, refinanced, replaced, defeased,
discharged, refunded or otherwise retired for value within one year of the incurrence of the
Refinancing Indebtedness.

     “Responsible Financial or Accounting Officer of the Issuer” means any one of the Chief
Financial Officer, Vice President of Finance, Treasurer or Chief Accounting Officer of the Issuer.

     “Responsible Officer” means any officer assigned to the Corporate Trust Office of the Trustee,
including any vice president, assistant vice president, assistant treasurer, assistant secretary,
trust officer or any other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct responsibility for the
administration of this Indenture, and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer’s knowledge of and familiarity with the
particular subject.

23

 

     “Restricted Payment” means any of the following:

     (1) the declaration or payment of any dividend or any other distribution (whether made
in cash, securities or other property) on or in respect of Equity Interests of the Issuer or
any Restricted Subsidiary or any payment made to the direct or indirect holders (in their
capacities as such) of Equity Interests of the Issuer or any Restricted Subsidiary,
including, without limitation, any payment in connection with any merger or consolidation
involving the Issuer or any of its Restricted Subsidiaries but excluding (a) dividends or
distributions payable solely in Qualified Equity Interests or through accretion or
accumulation of such dividends on such Equity Interests and (b) in the case of Restricted
Subsidiaries, dividends or distributions payable to the Issuer or to a Restricted Subsidiary
(and if such Restricted Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of
its Common Shares on a pro rata basis);

     (2) the purchase, redemption, defeasance or other acquisition or retirement for value
of any Equity Interests of the Issuer or any direct or indirect parent of the Issuer held by
Persons other than the Issuer or a Restricted Subsidiary (including, without limitation, any
payment in connection with any merger or consolidation involving the Issuer);

     (3) any Investment other than a Permitted Investment; or

     (4) any principal payment on, purchase, redemption, defeasance, prepayment, decrease or
other acquisition or retirement for value prior to any scheduled maturity or prior to any
scheduled repayment of principal or sinking fund payment, as the case may be, in respect of
Subordinated Indebtedness (other than any Subordinated Indebtedness owed to and held by the
Issuer or any Restricted Subsidiary permitted under clause (6) of the definition of
“Permitted Indebtedness”).

     “Restricted Payments Basket” has the meaning set forth in Section 4.7(a).

     “Restricted Subsidiary” means any Subsidiary other than an Unrestricted Subsidiary.

     “Sale and Repurchase Agreement” means the Sale and Repurchase Agreement, dated as of December
23, 2008, by and between the Issuer and Precision Drilling Oilfield Services Corporation, as in
effect on the Issue Date, and any other sale and repurchase agreements or similar agreements among
the Issuer or any of the Guarantors entered into after the Issue Date; provided that any
restrictions on dividends or distributions, loans or advances or transfers of property contained in
such other agreements are no more restrictive to the Issuer or any Guarantor in all material
respects as the analogous restrictions in the Sale and Repurchase Agreement, dated as of December
23, 2008, and the applicable covenants therein are qualified so as to permit exceptions thereto (i)
for the purpose of permitting payment of principal, interest and any other obligations under the
Notes and this Indenture to the same extent in all material respects as the qualifications
contained in the Sale and Repurchase Agreement, dated as of December 23, 2008, (ii) to permit the
granting of Liens under the Notes and this Indenture and (iii) to subordinate any Liens (including
backup Liens) thereunder to any Liens under the Notes and this Indenture.

     “S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc.,
and its successors.

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

     “Secretary’s Certificate” means a certificate signed by the Secretary of the Issuer.

24

 

     “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

     “Significant Subsidiary” means (1) any Restricted Subsidiary that would be a “significant
subsidiary” as defined in Rule 1-02 of Regulation S-X promulgated pursuant to the Securities Act as
such Regulation was in effect on the Issue Date and (2) any Restricted Subsidiary that, when
aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries
and as to which any event described in Section 6.1(7) has occurred and is continuing, would
constitute a Significant Subsidiary under clause (1) of this definition.

     “Specified Cash Management Agreements” means any agreement providing for treasury, depository,
purchasing card or cash management services, including in connection with any automated clearing
house transfers of funds or any similar transactions between the Issuer or any Guarantor and any
lender, including, without limitation, the centralized banking agreement among the Issuer,
Precision Limited Partnership, Precision Drilling Canada Limited Partnership and Royal Bank of
Canada providing for the administration of and netting of balances between Canadian bank accounts
maintained by the Issuer and certain Subsidiaries with Royal Bank of Canada, as amended, restated
or otherwise modified from time to time including, but not limited to, through the addition of new
Subsidiaries as parties thereto and withdrawals of Subsidiaries therefrom from time to time, and
including any replacement thereof entered into by the Issuer and any Subsidiaries with Royal Bank
of Canada or any other lender from time to time.

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

     “Subordinated Indebtedness” means Indebtedness of the Issuer or any Guarantor that is
expressly subordinated in right of payment to the Notes or the Guarantees, respectively.

     “Subsidiary” means, with respect to any Person:

     (1) any corporation, limited liability company, association, trust or other business
entity of which more than 50.0% of the total voting power of the Equity Interests entitled
(without regard to the occurrence of any contingency) to vote in the election of the Board
of Directors thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person (or a combination thereof);
and

     (2) any partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general partners of
which are such Person or of one or more Subsidiaries of such Person (or any combination
thereof).

     Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Issuer.

     “Unrestricted Subsidiary” means (a) any Subsidiary that at the time of determination shall be
designated an Unrestricted Subsidiary by the Board of Directors of the Issuer in accordance with
Section 4.18 and (b) any Subsidiary of an Unrestricted Subsidiary.

     “Unsecured Notes” means the U.S. $650,000,000 6.625% Senior Notes due 2020 issued by the
Issuer pursuant to the Unsecured Note Indenture.

25

 

     “Unsecured Note Indenture” means the Indenture dated as of November 17, 2010 among the Issuer,
the guarantors listed on the signature pages thereto, The Bank of New York Mellon as U.S. trustee
and Valiant Trust Company as Canadian trustee, as amended, supplemented or restated from time to
time.

     “U.S. Dollars” and “U.S.$” means dollars in the lawful currency of the United States of
America.

     “Voting Shares” with respect to any Person, means securities of any class of Equity Interests
of such Person entitling the holders thereof (whether at all times or only so long as no senior
class of stock or other relevant equity interest has voting power by reason of any contingency) to
vote in the election of members of the Board of Directors of such Person.

     “Weighted Average Life to Maturity” when applied to any Indebtedness at any date, means 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 payment
of principal, including payment at Stated Maturity, in respect thereof 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.

     “Wholly-Owned Subsidiary” means a Restricted Subsidiary, all of the Equity Interests of which
(other than directors’ qualifying shares) are owned by the Issuer or another Wholly-Owned
Subsidiary.

	 	 	SECTION 1.2 Other Definitions

	 	 	 	 	 
	 	 	Defined in
	Term	 	Section
	“acceleration declaration”
	 	 	6.2	 
	“Act”
	 	 	11.14	 
	“Affiliate Transaction”
	 	 	4.11	(a)
	“Canadian GAAP”
	 	 	1.1	 
	“Change of Control Payment Date”
	 	 	4.14	 
	“Change of Control Purchase Price”
	 	 	4.14	 
	“deemed year”
	 	 	1.5	 
	“Defeasance”
	 	 	8.2	 
	“Deposit Trustee”
	 	 	8.5	 
	“Event of Default”
	 	 	6.1	 
	“Excess Proceeds”
	 	 	4.10	(b)
	“Four-Quarter Period”
	 	 	1.1	 
	“Investment Grade Rating”
	 	 	4.20	(a)
	“Judgment Currency”
	 	 	11.18	 
	“Net Proceeds Offer Amount”
	 	 	4.10	(d)
	“Net Proceeds Offer Period”
	 	 	4.10	(d)
	“Net Proceeds Purchase Date”
	 	 	4.10	(d)
	“Permitted Indebtedness”
	 	 	4.9	(b)
	“Registrar”
	 	 	2.3	 
	“Successor”
	 	 	5.1	(a)(1)(b)
	“Transaction Date”
	 	 	1.1	 
	“Trust Indenture Legislation”
	 	 	11.1	 

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

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

26

 

     (2) an accounting term not otherwise defined herein 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) unless otherwise specified, any reference to Section, Article or Exhibit refers to
such Section, Article or Exhibit, as the case may be, of this Indenture;

     (6) provisions apply to successive events and transactions;

     (7) references to mergers include amalgamations;

     (8) unless otherwise indicated, reference to a statute shall be deemed to be a
reference to such statute as amended, re-enacted or replaced from time to time; and

     (9) unless otherwise indicated, time periods within which a payment is to be made or
any other action is to be taken hereunder shall be calculated by including the day on which
the period commences and excluding the day on which the period ends.

     SECTION 1.4 Interest Limitation. It is the intention of the Issuer to conform
strictly to all applicable usury laws and any subsequent revisions, repeals or judicial
interpretations thereof. Accordingly, if the transactions contemplated hereby would be usurious
under any applicable law then, in that event, notwithstanding anything to the contrary in the Notes
or this Indenture, it is agreed as follows: (i) the aggregate of all consideration which
constitutes interest under applicable law with respect to a Note shall under no circumstances
exceed the maximum amount allowed by applicable law, and any excess shall be credited to the
principal amount of such Note (or, if the principal amount of such Note shall have been paid in
full, refunded to the Issuer), to the extent permitted by applicable law; and (ii) in the event
that the maturity of any Note is accelerated or in the event of any redemption of such Note, then
such consideration that constitutes interest under applicable law may never include more than the
maximum amount allowed by applicable law, and any excess shall be credited to the principal amount
of such Note (or, if the principal amount of such Note shall be paid in full, refunded to the
Issuer), to the extent permitted by applicable law. All calculations made to compute the rate of
interest with respect to a Note for the purpose of determining whether such rate exceeds the
maximum amount allowed by applicable law shall be made, to the extent permitted by such applicable
law, by allocating and spreading during the period of the full stated term of such Note all
interest any time contracted for, taken, reserved, charged or received by such Holder or by the
Trustee on behalf of any such Holder in connection therewith so that the amount or rate of interest
charged for any and all periods of time during the term of the Note does not exceed the maximum
amount or rate of interest allowed to be charged by law during the relevant period of time.
Notwithstanding any of the foregoing, if at any time applicable laws shall be changed so as to
permit a higher rate or amount of interest to be charged than that permitted prior to such change,
then unless prohibited by law, references in this Indenture or any Note to “applicable law” when
used in the context of determining the maximum interest or rate of interest that can be charged
shall be deemed to refer to such applicable law as so amended to allow the greater amount or rate
of interest. The right to accelerate maturity of any Note does not include the right to accelerate
any interest which has not otherwise accrued to the date of such acceleration, provided, however,
that the foregoing shall not prohibit the continuing accrual after acceleration of interest in
accordance with the terms of this Indenture and such Note. The agreements set forth in this Section
1.4 are part of the consideration for the issuance of the Notes.

27

 

     SECTION 1.5 Interest Act (Canada). For the purposes of disclosure under the
Interest Act (Canada) only, and without affecting the amount of interest payable under the Notes or
the calculation of interest on the Notes, wherever a rate of interest under the Notes is calculated
on the basis of a year (the “deemed year”) which contains fewer days than the actual number of days
in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for
the purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number
of days in the calendar year of calculation and dividing it by the number of days in the deemed
year.

ARTICLE II

THE NOTES

     SECTION 2.1 Form and Dating. The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A attached hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes will be issued in registered form,
without coupons, and in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The registered Holder will be treated as the owner of such Note for all purposes.

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

     SECTION 2.2 Execution and Authentication. An Officer shall sign the Notes for the
Issuer by manual or facsimile signature.

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

     A Note shall not be valid until authenticated by the manual signature of a Responsible
Officer. The signature of a Responsible Officer shall be conclusive evidence that the Note has
been authenticated under this Indenture.

     The Trustee shall, upon receipt of a written order of the Issuer signed by one Officer
directing the Trustee to authenticate the Notes and certifying that all conditions precedent to the
issuance of the Notes contained herein have been complied with and receipt of an Opinion of
Counsel, authenticate Notes for original issue in the aggregate principal amount stated in such
written order.

     The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to
authenticate 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 or agents. An authenticating
agent has the same rights as an Agent to deal with Holders or the Issuer or an Affiliate of the
Issuer.

     SECTION 2.3 Registrar; Transfer Agent; Depository. The Issuer shall maintain an
office or agency where Notes may be presented for registration of transfer or for exchange
(“Registrar”). The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Issuer may appoint one or more co-registrars. The term “Registrar” includes any
co-registrar. The Issuer may change any Registrar without notice to any Holder. The Issuer and/or
any Restricted Subsidiary may act as the

28

 

Registrar. The Issuer initially appoints the Trustee to act as the Registrar and transfer
agent. The Issuer initially appoints CDS to act as Depository with respect to the Global Notes.

	 	 	SECTION 2.4 [Intentionally Omitted].

     SECTION 2.5 Holder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses of all
Holders.

	 	 	SECTION 2.6 Book-Entry Provisions for Global Notes

     (a) The Notes shall be issued initially in the form of one or more Global Notes, which
shall be deposited by the Trustee on behalf of the purchasers of the Notes represented
thereby with the Depository, and registered in the name of the Depository or a nominee of
the Depository, duly executed by the Issuer and authenticated by the Trustee as provided
herein.

     (b) Each Global Note shall represent such of the outstanding Notes as shall be
specified therein, and each shall provide that it shall represent the aggregate amount of
outstanding Notes from time to time endorsed thereon and that the aggregate amount of
outstanding Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and transfers of interests. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee, in accordance with
instructions given by the Holder thereof as required by this Section 2.6.

     (c) Members of, or Participants in, the Depository shall have no rights under this
Indenture with respect to any Global Note held on their behalf by the Depository or under
such Global Note, and the Depository may be treated by the Issuer, and the Trustee or any
Agent and any of their respective agents, as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Issuer, the Trustee or any Agent or their respective agents from giving effect to any
written certification, proxy or other authorization furnished by the Depository or impair,
as between the Depository and its Participants, the operation of customary practices
governing the exercise of the rights of an owner of a beneficial interest in any Global
Note.

     (d) Neither the Trustee nor any Agent shall have any responsibility or obligation to
any Holder that is a member of (or a Participant in) the Depository or any other Person with
respect to the accuracy of the records of the Depository (or its nominee) or of any member
or Participant thereof, with respect to any ownership interest in the Notes or with respect
to the delivery of any notice (including any notice of redemption) or the payment of any
amount or delivery of any Notes (or other security or property) under or with respect to the
Notes. The Trustee and the Agents 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 in the Notes.

     (e) Transfers of a Global Note shall be limited to transfers of such Global Note in
whole, but not in part, to the Depository, its successors or their respective nominees.
Interests of Beneficial Holders in a Global Note may be transferred in accordance with the
rules and procedures of the Depository. In addition, certificated Notes shall be
transferred to Beneficial Holders in exchange for their beneficial interests only if (i) the
Depository notifies the Issuer that it is unwilling or unable to continue as Depository for
the Global Notes and a successor Depository is not appointed by the Issuer within ninety
(90) days of such notice, (ii) the Issuer

29

 

gives notice to the Depository that it is unwilling or unable to continue to have the
Depository hold the notes as book-entry only or that it desires or has processed an
entitlement requiring a withdrawal of Notes, or (iii) after the occurrence of an Event of
Default, the Depository advises the Trustee that it has received written notification from
Beneficial Holders representing, in the aggregate, more than 25% of the aggregate principal
amount of outstanding Notes that the continuance of the book-entry system is no longer in
their best interest.

     (f) In connection with the transfer of the entire Global Note to Beneficial Holders
pursuant to clause (e) of this Section 2.6(f), such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee
shall authenticate and deliver to each Beneficial Holder identified by the Depository in
exchange for its beneficial interest in such Global Note an equal aggregate principal amount
of certificated Notes of authorized denominations.

     (g) The registered Holder of a Global Note may grant proxies and otherwise authorize
any Person, including Participants and Persons that may hold interest through Participants,
to take any action which a Holder is entitled to take under this Indenture or the Notes.

     (h) Each Global Note shall bear the Global Note Legend on the face thereof.

     (i) At such time as all beneficial interests in Global Notes have been exchanged for
certificated Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned
to or retained and cancelled by the Trustee in accordance with Section 2.11. At any time
prior to such cancellation, if any beneficial interest in a Global Note is exchanged for
certificated Notes, redeemed, repurchased or cancelled, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Trustee to reflect such reduction.

     (j) General Provisions Relating to Transfers and Exchanges.

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

     (2) No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any stamp or transfer tax or similar governmental charge payable in connection
therewith (other than any such stamp or transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant to Section 2.10, Section 2.16,
Section 3.6, Section 4.10, Section 4.14 and Section 9.5 hereof).

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

     (4) The Registrar is not required (A) to issue, to register the transfer of or
to exchange Notes during a period beginning at the opening of business fifteen (15)
days before the day of any selection of Notes for redemption and ending at the close
of

30

 

business on the day of such selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part, or (C) to register the
transfer of or to exchange a Note between a record date and the next succeeding
interest payment date.

     (5) Prior to due presentment for the registration of a transfer of any Note,
the Trustee, any Agent and the Issuer may deem and treat the Person in whose name
any Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Notes and for all other
purposes, and none of the Trustee, any Agent, or the Issuer shall be affected by
notice to the contrary.

     (6) The Trustee shall authenticate Global Notes and certificated Notes in
accordance with the provisions of Section 2.2. Except as provided in Section
2.6(e), neither the Trustee nor the Registrar shall authenticate or deliver any
certificated Note in exchange for a Global Note.

     (7) Each Holder agrees to provide reasonable indemnity to the Issuer and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder’s Note in violation of any provision of this Indenture
and/or applicable securities law.

     Neither the Trustee nor any Agent shall have any 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 Participants or beneficial owners of interests 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.

     SECTION 2.7 Replacement Notes. If any mutilated Note is surrendered to the Trustee,
or the Issuer and the Trustee receive evidence to its satisfaction of the destruction, loss or
theft of any Note, the Issuer shall issue and the Trustee, upon the written order of the Issuer
signed by an Officer of the Issuer, shall authenticate a replacement Note if the Trustee’s
requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied
by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the
Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may
suffer if a Note is replaced. The Issuer, the Trustee and the Agents may charge for their expenses
in replacing a Note.

     Every replacement Note is an additional obligation of the Issuer and shall be entitled to all
of the benefits of this Indenture equally and proportionately with all other Notes duly issued
hereunder.

     SECTION 2.8 Outstanding Notes. The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.8 as not outstanding.
Except as set forth in Section 2.9, a Note does not cease to be outstanding because the Issuer or
an Affiliate of the Issuer holds the Note.

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

31

 

     If the Trustee holds, on any payment date, money sufficient to pay the amounts under the Notes
payable on that date, then on and after that date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.

     SECTION 2.9 Treasury Notes. In determining whether the Holders of the required
aggregate principal amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Issuer or by any Affiliate of the Issuer shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes of which a Responsible Officer has written notice
as being so owned shall be so disregarded. Notwithstanding the foregoing, Notes that are to be
acquired by the Issuer or an Affiliate of the Issuer pursuant to an exchange offer, tender offer or
other agreement shall not be deemed to be owned by such entity until legal title to such Notes
passes to such entity.

     SECTION 2.10 Temporary Notes. Until certificated Notes are ready for delivery, the
Issuer may prepare and the Trustee shall authenticate temporary Notes upon a written order of the
Issuer signed by one Officer of the Issuer. Temporary Notes shall be substantially in the form of
certificated Notes but may have variations that the Issuer considers appropriate for temporary
Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall upon receipt of
a written order of the Issuer signed by one Officer, authenticate certificated Notes in certificate
form in exchange for temporary Notes.

     Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.

     SECTION 2.11 Cancellation. The Issuer at any time may deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder or which the Issuer may
have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by
the Trustee. All Notes surrendered for registration of transfer, exchange or payment, if
surrendered to any Person other than the Trustee, shall be delivered to the Trustee. The Trustee
and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation. Subject to Section 2.7, the Issuer may not issue new Notes to replace
Notes that it has redeemed or paid or that have been delivered to the Trustee for cancellation.
All cancelled Notes held by the Trustee shall be disposed of in accordance with its customary
practice, and certification of their disposal delivered to the Issuer upon its written request
therefor.

     SECTION 2.12 Defaulted Interest. If the Issuer defaults in a payment of interest on
the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special
record date, which date shall be at the earliest practicable date but in all events at least five
(5) Business Days prior to the payment date, in each case at the rate provided in the Notes and in
Section 4.1. The Issuer shall fix or cause to be fixed each such special record date and payment
date and shall promptly thereafter notify the Trustee of any such date. At least fifteen (15) days
before the special record date, the Issuer (or the Trustee, in the name and at the expense of the
Issuer) shall mail or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.

     SECTION 2.13 Computation of Interest. Interest on the Notes shall be computed on the
basis of a 360-day year comprised of twelve (12) thirty (30) day months.

     SECTION 2.14 CUSIP Number. The Issuer in issuing the Notes may use a “CUSIP” number,
and if it does so, the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided that any such notice may state that no representation is made as
to the
correctness or accuracy of the CUSIP number printed in the notice or on the Notes and that
reliance may

32

 

be placed only on the other identification numbers printed on the Notes. The Issuer
shall promptly notify the Trustee in writing of any change in any CUSIP number.

	 	 	SECTION 2.15 [Intentionally Omitted].

     SECTION 2.16 Issuance of Additional Notes. The Issuer shall be entitled to issue
Additional Notes in an unlimited aggregate principal amount under this Indenture that shall have
identical terms as the Initial Notes, other than with respect to the date of issuance, issue price,
amount of interest payable on the first interest payment date applicable thereto and transfer
restrictions with respect thereto; provided that such issuance is not prohibited by the terms of
this Indenture, including Section 4.9 and Section 4.12. The Initial Notes and any Additional Notes
shall be treated as a single class for all purposes under this Indenture.

     With respect to any Additional Notes, the Issuer shall set forth in a resolution of its Board
of Directors and in an Officers’ Certificate, a copy of each of 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, the CUSIP number of such
Additional Notes, the first interest payment date and the amount of interest
payable on such first interest payment date applicable thereto and the date
from which interest shall accrue; and
	 
	 	(3)	 	that such issuance is not prohibited by this Indenture.

     The Trustee shall, upon receipt of the resolution of the Issuer’s Board of Directors and
Officers’ Certificate, authenticate the Additional Notes in accordance with the provisions of
Section 2.2 of this Indenture.

     SECTION 2.17 Notes to Rank Pari Passu. The Notes will be direct senior unsecured
obligations of the Issuer and will rank pari passu subject to statutory preferred exceptions, with
all other present and future unsubordinated and unsecured indebtedness of the Issuer.

ARTICLE III

REDEMPTION AND PREPAYMENT

     SECTION 3.1 Notices to Trustee. If the Issuer elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.7, it shall furnish to the Trustee, at least thirty
(30) days (or such shorter period as is acceptable to the Trustee) before a redemption date, an
Officers’ Certificate setting forth the (i) section of this Indenture pursuant to which the
redemption shall occur, (ii) redemption date, (iii) principal amount of Notes to be redeemed and
(iv) redemption price.

     If the Issuer is required to make an offer to purchase Notes pursuant to Section 4.10 or
Section 4.14, it shall furnish to the Trustee, at least thirty (30) days (or such shorter period as
is acceptable to the Trustee) before the scheduled purchase date, an Officers’ Certificate setting
forth the (i) section of this Indenture pursuant to which the offer to purchase shall occur, (ii)
terms of the offer, (iii) principal amount of Notes to be purchased, (iv) purchase price and (v)
purchase date and further setting forth a statement to
the effect that (a) the Issuer or one of its Subsidiaries has effected an Asset Sale and there
are Excess

33

 

Proceeds aggregating an amount equal to more than U.S.$50.0 million or (b) a Change of
Control has occurred, as applicable.

     The Issuer will also provide the Trustee with any additional information that the Trustee
reasonably requests in connection with any redemption or offer.

     SECTION 3.2 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 in
compliance with the requirements of the principal exchange, if any, on which the Notes are listed
or, if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee,
in its sole discretion, may deem fair and appropriate (and in a manner that complies with
applicable legal requirements); provided, however that no Notes of $2,000 in original principal
amount or less shall be redeemed in part. In addition, if a partial redemption is made pursuant to
Section 3.7(c), selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to the
procedures of the Depository), unless that method is otherwise prohibited.

     On and after the redemption date, interest will cease to accrue on Notes or portions of them
called for redemption. The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption as long as the Issuer has deposited with the Trustee funds in
satisfaction of the applicable redemption price pursuant to this Indenture and shall promptly
notify the Issuer in writing of the Notes selected for redemption. The Trustee may select for
redemption portions (equal to $1,000 or any integral multiples of $1,000 thereof) of the principal
of the Notes that have denominations larger than $2,000.

     SECTION 3.3 Notice of Redemption. Subject to the provisions of Section 4.10 and
Section 4.14, the Issuer shall deliver or cause to be delivered in accordance with Section 11.2, a
notice of redemption to each Holder whose Notes are to be redeemed (with a copy to the Trustee), at
least thirty (30) days but not more than sixty (60) days before a redemption date (except that
notices may be delivered more than sixty (60) days before a redemption date if the notice is issued
in accordance with Section 8.8).

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

     (1) the redemption date;

     (2) the redemption price;

     (3) if any Note is being redeemed in part, the portion of the principal amount of such
Notes to be redeemed and that, after the redemption date, upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note (or appropriate adjustments to the amount and beneficial
interests in a Global Note will be made, as appropriate);

     (4) the name and address of the Trustee;

     (5) that Notes called for redemption must be surrendered to the Trustee to collect the
redemption price;

     (6) that, unless the Issuer defaults in making such redemption payment, interest, if
any, on Notes called for redemption ceases to accrue on and after the redemption date;

34

 

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

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

     At the Issuer’s written request, the Trustee shall give the notice of redemption in the
Issuer’s name and at the Issuer’s expense; provided, however, that the Issuer shall have delivered
to the Trustee, at least forty-five (45) days prior to the redemption date (or such shorter period
as is acceptable to the Trustee), an Officers’ Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in the notice as provided in the preceding
paragraph. The notice mailed in the manner herein provided shall be deemed to have been duly given
whether or not the Holder receives such notice. In any case, failure to give such notice or any
defect in the notice to the Holder of any Note shall not affect the validity of the proceeding for
the redemption of any other Note.

     SECTION 3.4 Effect of Notice of Redemption. Once notice of redemption is delivered in
accordance with Section 3.3, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price plus accrued and unpaid interest to such date.

     SECTION 3.5 Deposit of Redemption Price. On or before 10:00 a.m. (Calgary time) on
the Business Day prior to each redemption date or the date on which Notes must be accepted for
purchase pursuant to Section 4.10 or Section 4.14, the Issuer shall deposit with the Trustee money
sufficient to pay the redemption price of and accrued and unpaid interest on all Notes to be
redeemed or purchased on that date. The Trustee shall promptly return to the Issuer any money
deposited with the Trustee by the Issuer in excess of the amounts necessary to pay the redemption
price of (including any applicable premium), and accrued interest on, all Notes to be redeemed or
purchased.

     If Notes called for redemption or tendered in a Net Proceeds Offer or Change of Control Offer
are paid or if the Issuer has deposited with the Trustee money sufficient to pay the redemption or
purchase price of, and unpaid and accrued interest, if any, on, all Notes to be redeemed or
purchased, on and after the redemption or purchase date, interest, if any, shall cease to accrue on
the Notes or the portions of Notes called for redemption or tendered and not withdrawn in a Net
Proceeds Offer or Change of Control Offer (regardless of whether certificates for such securities
are actually surrendered). If a Note is redeemed or purchased on or after an interest record date
but on or prior to the related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for redemption because
of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the
unpaid principal from the redemption or purchase date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case, at the rate provided
in the Notes and in Section 4.1.

     SECTION 3.6 Notes Redeemed in Part. Upon surrender and cancellation of a Note that is
redeemed in part, the Issuer shall issue and, upon the written request of an Officer of the Issuer,
the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in
principal amount to the unredeemed portion of the Note surrendered and canceled; provided that each
such new Note will be in a principal amount of $2,000 or integral multiples of $1,000 in excess
thereof.

	 	 	SECTION 3.7 Optional Redemption.

     (a) The Notes may be redeemed, in whole or in part, at any time prior to March 15, 2015 at the
option of the Issuer upon not less than 30 nor more than 60 days’ prior notice to each Holder of
Notes,

35

 

at a redemption price equal to 100.0% of the principal amount of the Notes redeemed plus the
Applicable Premium (calculated by the Issuer) as of, and accrued and unpaid interest to, the
applicable redemption date (subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date).

     (b) The Notes are subject to redemption, at the option of the Issuer, in whole or in part, at
any time or from time to time on or after March 15, 2015, at the following redemption prices
(expressed as percentages of the principal amount to be redeemed) set forth below, plus accrued and
unpaid interest, if any, on the Notes to be redeemed to the applicable redemption date (subject to
the right of Holders on the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve (12) month period beginning March 15 of the years
indicated below:

	 	 	 	 	 
	Year	 	Redemption Price
	2015
	 	 	103.250	%
	2016
	 	 	101.625	%
	2017 and thereafter
	 	 	100.000	%

     (c) At any time or from time to time prior to March 15, 2014, the Issuer, at its option, may
on any one or more occasions redeem up to 35.0% of the principal amount of the outstanding Notes
issued under this Indenture (calculated after giving effect to any issuance of Additional Notes)
with the net cash proceeds of one or more Qualified Equity Offerings at a redemption price equal to
106.5% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest
thereon to the date of redemption (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date); provided that:

     (1) at least 65.0% of the aggregate principal amount of Notes issued under this
Indenture (calculated after giving effect to any issuance of Additional Notes) remains
outstanding immediately after giving effect to any such redemption; and

     (2) the redemption occurs not more than 90 days after the date of the closing of any
such Qualified Equity Offering.

ARTICLE IV

COVENANTS

	 	 	SECTION 4.1 Payment of Notes.

     (a) The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest
on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid for all purposes hereunder on the date the Trustee holds, as of
10:00 a.m. (Calgary time) on the Business Day prior to the relevant payment date, Canadian dollars
deposited by the
Issuer in immediately available funds and designated for and sufficient to pay all such
principal, premium, if any, and interest then due.

     (b) The Issuer shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on
the Notes to the extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period), at the same rate to the extent lawful.

36

 

	 	 	SECTION 4.2 [Intentionally Omitted].

     SECTION 4.3 Provision of Financial Information. The Issuer will provide the Trustee
and the Trustee shall deliver to all the Holders, a copy of all financial statements, whether
annual or interim, of the Issuer and the report (if any) of the Issuer’s auditors thereon and the
corresponding management’s discussion and analysis of the financial condition and results of
operations of the Issuer at the same time as they are filed under applicable securities
legislation, which will be deemed to have been provided to the Trustee and the Holders once filed
on the SEDAR website at www.sedar.com (and such obligations to provide such documents shall
continue in the event that the Issuer ceases to be a “reporting issuer” under Canadian Securities
Laws (or its equivalent)).

     SECTION 4.4 Compliance Certificate. The Issuer shall deliver to the Trustee, within
90 days after the end of each fiscal year beginning with the fiscal year ended December 31, 2011,
an Officers’ Certificate stating that a review of the activities of the Issuer and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the signing Officers with a
view to determining whether each has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such certificate, that, to his
or her knowledge, each entity 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 Issuer is taking or proposes to take with respect thereto) and that, to his or
her knowledge, no event has occurred and remains in existence by reason of which payments on
account of the principal of, premium, if any, or interest on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Issuer is taking or proposes to
take with respect thereto.

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

     SECTION 4.5 Taxes. The Issuer 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 and with respect to which appropriate
reserves have been taken in accordance with GAAP or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.

     SECTION 4.6 Stay, Extension and Usury Laws. The Issuer 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 the Issuer and each of the Guarantors (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 4.7 Limitation on Restricted Payments.

     (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, make any Restricted Payment if at the time of such Restricted Payment:

37

 

     (1) a Default shall have occurred and be continuing or shall occur as a consequence
thereof;

     (2) the Issuer is not able to incur at least U.S.$1.00 of additional Indebtedness
pursuant to the Coverage Ratio Exception; or

     (3) the amount of such Restricted Payment, when added to the aggregate amount of all
other Restricted Payments made after the Issue Date (other than Restricted Payments made
pursuant to clauses (2), (3), (4), (5), (6) or (10) of Section 4.7(b), exceeds the sum (the
“Restricted Payments Basket”) of (without duplication):

     (a) 50.0% of Consolidated Net Income of the Issuer and the Restricted
Subsidiaries for the period (taken as one accounting period) commencing on October
1, 2010 to and including the last day of the fiscal quarter ended immediately prior
to the date of such calculation for which consolidated financial statements are
available (or, if such Consolidated Net Income shall be a deficit, minus 100.0% of
such deficit),

     plus

     (b) 100.0% of (A) (i) the aggregate net cash proceeds and (ii) the Fair Market
Value of (x) marketable securities (other than marketable securities of the Issuer),
(y) Equity Interests of a Person (other than the Issuer or an Affiliate of the
Issuer) engaged in a Permitted Business and (z) other assets used in any Permitted
Business, received by the Issuer or its Restricted Subsidiaries after the Issue
Date, in each case as a contribution to its common equity capital or from the issue
or sale of Qualified Equity Interests or from the issue or sale of convertible or
exchangeable Disqualified Equity Interests or convertible or exchangeable debt
securities of the Issuer that have been converted into or exchanged for such
Qualified Equity Interests (other than Equity Interests or debt securities sold to a
Subsidiary of the Issuer or net cash proceeds received by the Issuer from Qualified
Equity Offerings to the extent applied to redeem the Notes in accordance with the
provisions set forth under Section 3.7(c)), and (B) the aggregate net cash proceeds,
if any, received by the Issuer or any of its Restricted Subsidiaries upon any
conversion or exchange described in clause (A) above, plus

     (c) 100.0% of the aggregate amount by which Indebtedness (other than any
Subordinated Indebtedness or Indebtedness held by a Subsidiary of the Issuer) of the
Issuer or any Restricted Subsidiary is reduced on the Issuer’s consolidated balance
sheet upon the conversion or exchange after the Issue Date of any such Indebtedness
into or for Qualified Equity Interests, plus

     (d) in the case of the disposition or repayment of or return on any Investment
that was treated as a Restricted Payment made by the Issuer after the Issue Date, an
amount (to the extent not included in the computation of Consolidated Net
Income) equal to the lesser of (i) 100.0% of the aggregate amount received by the
Issuer or any Restricted Subsidiary in cash or other property (valued at the Fair
Market Value thereof) as the return of capital with respect to such Investment and
(ii) the amount of such Investment that was treated as a Restricted Payment, in
either case, less the cost of the disposition of such Investment and net of taxes,
plus

     (e) upon a Redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary, an amount (to the extent not included in the computation of Consolidated Net

38

 

Income) equal to the lesser of (i) the Fair Market Value of the Issuer’s
proportionate interest in such Subsidiary immediately following such Redesignation,
and (ii) the aggregate amount of the Issuer’s Investments in such Subsidiary to the
extent such Investments reduced the Restricted Payments Basket and were not
previously repaid or otherwise reduced.

     (b) Notwithstanding the foregoing, Section 4.7(a) will not prohibit:

     (1) the payment of any dividend or redemption payment or the making of any distribution
within 60 days after the date of declaration thereof if, on the date of declaration, the
dividend, redemption or distribution payment, as the case may be, would have complied with
the provisions of this Indenture;

     (2) any Restricted Payment made in exchange for, or out of the proceeds of, the
substantially concurrent issuance and sale of Qualified Equity Interests;

     (3) the purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Indebtedness of the Issuer or any Guarantor in exchange for, or
out of the proceeds of, the substantially concurrent incurrence of, Refinancing Indebtedness
permitted to be incurred under Section 4.9 and the other terms of this Indenture;

     (4) the purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Indebtedness of the Issuer or any Restricted Subsidiary (a) at a
purchase price not greater than 101% of the principal amount of such Subordinated
Indebtedness in the event of a Change of Control in accordance with provisions similar to
Section 4.14 or (b) at a purchase price not greater than 100% of the principal amount
thereof in accordance with provisions similar to Section 4.10; provided that, prior to or
simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition
or retirement, the Issuer has made the Change of Control Offer or Net Proceeds Offer, as
applicable, as provided in such covenant with respect to the Notes and has completed the
repurchase or redemption of all Notes validly tendered for payment in connection with such
Change of Control Offer or Net Proceeds Offer;

     (5) the redemption, repurchase or other acquisition or retirement for value of Equity
Interests of the Issuer held by officers, directors or employees or former officers,
directors or employees (or their transferees, estates or beneficiaries under their estates),
either (x) upon any such individual’s death, disability, retirement, severance or
termination of employment or service or (y) pursuant to any equity subscription agreement,
stock option agreement, shareholders’ agreement or similar agreement; provided, in any case,
that the aggregate cash consideration paid for all such redemptions, repurchases or other
acquisitions or retirements shall not exceed (A) U.S.$5.0 million during any calendar year
(with unused amounts in any calendar year being carried forward to the next succeeding
calendar year) plus (B) the amount of any net cash
proceeds received by or contributed to the Issuer from the issuance and sale after the
Issue Date of Qualified Equity Interests to its officers, directors or employees that have
not been applied to the payment of Restricted Payments pursuant to this clause (5), plus (C)
the net cash proceeds of any “key-man” life insurance policies that have not been applied to
the payment of Restricted Payments pursuant to this clause (5); and provided further that
cancellation of Indebtedness owing to the Issuer from members of management of the Issuer or
any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Issuer
will not be deemed to constitute a Restricted Payment for purposes of this Section 4.7 or
any other provision of this Indenture;

39

 

     (6) (a) repurchases, redemptions or other acquisitions or retirements for value of
Equity Interests of the Issuer deemed to occur upon the exercise of stock options, warrants,
rights to acquire Equity Interests of the Issuer or other convertible securities to the
extent such Equity Interests of the Issuer represent a portion of the exercise or exchange
price thereof and (b) any repurchases, redemptions or other acquisitions or retirements for
value of Equity Interests of the Issuer made in lieu of withholding taxes in connection with
any exercise or exchange of stock options, warrants or other similar rights;

     (7) dividends on Disqualified Equity Interests of the Issuer issued in compliance with
Section 4.9 to the extent such dividends are included in the definition of Consolidated
Interest Expense;

     (8) the payment of cash in lieu of fractional Equity Interests of the Issuer;

     (9) payments or distributions to dissenting shareholders pursuant to applicable law in
connection with a merger, amalgamation, consolidation or transfer of assets that complies
with Section 5.1;

     (10) cash distributions by the Issuer to the holders of Equity Interests of the Issuer
in accordance with a distribution reinvestment plan or dividend reinvestment plan to the
extent such payments are applied to the purchase of Equity Interests directly from the
Issuer;

     (11) payment of other Restricted Payments from time to time in an aggregate amount not
to exceed U.S.$100.0 million; or

     (12) the repurchase, redemption or other acquisition or retirement for value of the
AIMCo Warrants in an aggregate amount not to exceed U.S.$50.0 million.

provided that (a) in the case of any Restricted Payment pursuant to clauses (4), (5) or (11)
above, no Default shall have occurred and be continuing or occur as a consequence thereof
(it being understood that the making of a Restricted Payment in reliance on clause (4), (5)
or (11) above shall not be deemed to be a Default under this Section 4.7) and (b) no
issuance and sale of Qualified Equity Interests used to make a payment pursuant to clauses
(2) or (5)(B) above shall increase the Restricted Payments Basket to the extent of such
payment.

     For the purposes of determining compliance with any U.S. Dollar denominated restriction on
Restricted Payments denominated in a currency other than U.S. Dollars, the U.S. Dollar equivalent
amount of such Restricted Payment shall be calculated based on the relevant currency exchange rate
in effect on the date that such Restricted Payment was made.

     The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary
except pursuant to Section 4.18. For purposes of designating any Restricted Subsidiary as an
Unrestricted
Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except
to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in
an amount determined as set forth in the definition of “Investment.” Such designation will be
permitted only if a Restricted Payment in such amount would be permitted at such time and if such
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

     SECTION 4.8 Limitations on Dividend and Other Restrictions Affecting Restricted
Subsidiaries. The Issuer shall not, and shall not permit any Restricted Subsidiary to,
directly or

40

 

indirectly, create or otherwise cause or permit to exist or become effective any
consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

     (a) pay dividends or make any other distributions on or in respect of its Equity Interests to
the Issuer or any of its Restricted Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits (it being understood that the priority of any
Preferred Shares in receiving dividends or liquidating distributions prior to dividends or
liquidating distributions being paid on Common Shares shall not be deemed a restriction on the
ability to make distributions on Equity Interests);

     (b) make loans or advances, or pay any Indebtedness or other obligation owed, to the Issuer or
any other Restricted Subsidiary (it being understood that the subordination of loans or advances
made to the Issuer or any Restricted Subsidiary to other Indebtedness or obligations incurred by
the Issuer or any Restricted Subsidiary shall not be deemed a restriction on the ability to make
loans or advances); or

     (c) transfer any of its property or assets to the Issuer or any other Restricted Subsidiary
(it being understood that such transfers shall not include any type of transfer described in clause
(a) or (b) above);

     except for, in each case:

     (1) encumbrances or restrictions existing under agreements existing on the Issue Date
(including, without limitation, the Credit Agreement, the Unsecured Note Indenture and the
Sale and Repurchase Agreement) as in effect on that date;

     (2) encumbrances or restrictions existing under this Indenture, the Notes and the
Guarantees;

     (3) any instrument governing Acquired Indebtedness or Equity Interests of a Person
acquired by the Issuer or any of its Restricted Subsidiaries, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any Person,
other than the Person or the properties or assets of the Person so acquired;

     (4) any agreement or other instrument of a Person acquired by the Issuer or any of its
Restricted Subsidiaries in existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person and its Subsidiaries, or the
property or assets of the Person and its Subsidiaries, so acquired (including after acquired
property);

     (5) any amendment, restatement, modification, renewal, supplement, refunding,
replacement or refinancing of an agreement referred to in clauses (1), (2), (3), (4), or
(10); provided, however, that such amendments, restatements, modifications, renewals,
supplements, refundings, replacements or refinancings are, in the good faith judgment of the
Issuer, no more restrictive than the encumbrances and restrictions contained in the
agreements referred to in
clauses (1), (2), (3) or (4) of this Section 4.8(c) on the Issue Date or the date such
Restricted Subsidiary became a Restricted Subsidiary or was merged into a Restricted
Subsidiary, whichever is applicable;

     (6) encumbrances or restrictions existing under or by reason of applicable law,
regulation or order;

41

 

     (7) non-assignment provisions of any contract or any lease entered into in the ordinary
course of business;

     (8) in the case of clause (c) above, Liens permitted to be incurred under the
provisions of Section 4.12 that limit the right of the debtor to dispose of the assets
securing such Indebtedness;

     (9) restrictions imposed under any agreement to sell Equity Interests or assets, as
permitted under this Indenture, to any Person pending the closing of such sale;

     (10) any other agreement governing Indebtedness or other obligations entered into after
the Issue Date that either (A) contains encumbrances and restrictions that are not
materially more restrictive with respect to any Restricted Subsidiary than those in effect
on the Issue Date with respect to that Restricted Subsidiary pursuant to agreements in
effect on the Issue Date or (B) any such encumbrance or restriction contained in such
Indebtedness that is customary and does not prohibit (except upon a default or an event of
default thereunder) the payment of dividends in an amount sufficient, as determined by the
board of directors of the Issuer in good faith, to make scheduled payments of cash interest
and principal on the Notes when due;

     (11) customary provisions in partnership agreements, limited liability company
organizational governance documents, joint venture agreements, shareholder agreements and
other similar agreements entered into in the ordinary course of business that restrict the
disposition or distribution of ownership interests in or assets of such partnership, limited
liability company, joint venture, corporation or similar Person;

     (12) Purchase Money Indebtedness and any Refinancing Indebtedness in respect thereof
incurred in compliance with Section 4.9 that imposes restrictions of the nature described in
Section 4.8(c) on the assets acquired; and

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

	 	 	SECTION 4.9 Limitations on Additional Indebtedness

     (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, incur any Indebtedness (including Acquired Indebtedness); provided that the Issuer or
any Restricted Subsidiary may incur additional Indebtedness (including Acquired Indebtedness), in
each case, if, after giving effect thereto on a pro forma basis, the Consolidated Interest Coverage
Ratio would be at least 2.00 to 1.00 (the “Coverage Ratio Exception”).

     (b) Notwithstanding the above, each of the following incurrences of Indebtedness shall be
permitted (the “Permitted Indebtedness”):

     (1) Indebtedness of the Issuer and any Restricted Subsidiary under the Credit
Facilities in an aggregate principal amount at any time outstanding, including the issuance
and creation of letters of credit and bankers’ acceptances thereunder (with letters of
credit and bankers’ acceptances being deemed to have a principal amount equal to the face
amount thereof) not to exceed the greater of (a) U.S.$750.0 million or (b) 25.0% of the
Issuer’s Consolidated Tangible Assets;

     (2) Indebtedness under the Initial Notes and the Guarantees issued on the Issue Date;

42

 

     (3) Indebtedness of the Issuer and its Restricted Subsidiaries to the extent
outstanding on the Issue Date, including, without limitation, the Unsecured Notes and
guarantees thereof, after giving effect to the use of proceeds of the Notes (other than
Indebtedness referred to in clause (1), (2), (4), (6), (7), (8), (9), (10), (12) and (16));

     (4) (a) guarantees by the Issuer or Guarantors of Indebtedness permitted to be incurred
in accordance with the provisions of this Indenture; provided that in the event such
Indebtedness that is being guaranteed is Subordinated Indebtedness, then the related
guarantee shall be subordinated in right of payment to the Notes or the Guarantees, as the
case may be, and (b) guarantees of Indebtedness incurred by Restricted Subsidiaries that are
not Guarantors in accordance with the provisions of this Indenture;

     (5) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes
of the Issuer or any Restricted Subsidiary in the ordinary course of business and not for
the purpose of speculation; provided that in the case of Hedging Obligations relating to
interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness
otherwise permitted to be incurred by this Section 4.9, and (b) the notional principal
amount of such Hedging Obligations at the time incurred does not exceed the principal amount
of the Indebtedness to which such Hedging Obligations relate;

     (6) Indebtedness of the Issuer owed to and held by a Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary owed to and held by the Issuer or any other
Restricted Subsidiary; provided, however, that:

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

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

     (c)

     (i) any subsequent issuance or transfer of Equity Interests or any
other event which results in any such Indebtedness being held by a Person
other than the Issuer or any other Restricted Subsidiary; and

     (ii) any sale or other transfer of any such Indebtedness to a Person
other than the Issuer or any other Restricted Subsidiary

shall be deemed, in each case of this clause (c), to constitute an
incurrence of such Indebtedness not permitted by this clause (6);

     (7) Indebtedness in respect of workers’ compensation claims, bank guarantees, warehouse
receipt or similar facilities, property, casualty or liability insurance, take-or-pay
obligations in supply arrangements, self-insurance obligations or completion, performance,
bid performance, appeal or surety bonds in the ordinary course of business, including
guarantees or obligations with respect to letters of credit supporting such workers’
compensation claims, bank guarantees, warehouse receipt or similar facilities, property,
casualty or liability insurance, take-

43

 

or-pay obligations in supply arrangements,
self-insurance obligations or completion, performance, bid performance, appeal or surety
bonds;

     (8) Purchase Money Indebtedness incurred by the Issuer or any Restricted Subsidiary
after the Issue Date, and Refinancing Indebtedness thereof, in an aggregate principal amount
not to exceed at any time outstanding the greater of (a) U.S.$75.0 million or (b) 2.5% of
the Issuer’s Consolidated Tangible Assets;

     (9) Indebtedness arising from the honouring by a bank or other financial institution of
a check, draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business;

     (10) Indebtedness arising in connection with endorsement of instruments for deposit in
the ordinary course of business;

     (11) Refinancing Indebtedness of the Issuer or any Restricted Subsidiary with respect
to Indebtedness incurred pursuant to the Coverage Ratio Exception, clause (2), (3) or (8)
above, this clause (11), or clause (17) or (18) below;

     (12) indemnification, adjustment of purchase price, earn-out or similar obligations, in
each case, incurred or assumed in connection with the acquisition or disposition of any
business or assets of the Issuer or any Restricted Subsidiary or Equity Interests of a
Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Equity Interests for the purpose of
financing or in contemplation of any such acquisition; provided that (a) any amount of such
obligations included on the face of the balance sheet of the Issuer or any Restricted
Subsidiary shall not be permitted under this clause (12) (contingent obligations referred to
on the face of a balance sheet or in a footnote thereto and not otherwise quantified and
reflected on the balance sheet will not be deemed “included on the face of the balance
sheet” for purposes of the foregoing) and (b) in the case of a disposition, the maximum
aggregate liability in respect of all such obligations outstanding under this clause (12)
shall at no time exceed the gross proceeds actually received by the Issuer and the
Restricted Subsidiaries in connection with such disposition;

     (13) Indebtedness of Foreign Restricted Subsidiaries in an aggregate amount outstanding
at any one time not to exceed the greater of (a) U.S.$50.0 million or (b) 10.0% of such
Foreign Restricted Subsidiaries’ Consolidated Tangible Assets;

     (14) additional Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate
principal amount which, when taken together with the principal amount of all other
Indebtedness incurred pursuant to this clause (14) and then outstanding, will not exceed the
greater of (a) U.S.$150.0 million or (b) 5.0% of the Issuer’s Consolidated Tangible Assets;

     (15) Indebtedness in respect of Specified Cash Management Agreements entered into in
the ordinary course of business;

     (16) Indebtedness incurred under one or more short-term operating facilities provided
by Royal Bank of Canada and/or other lenders or the respective Affiliates thereof to the
Issuer and/or any Restricted Subsidiary providing for borrowings to be made and/or letters
of credit to be issued pursuant thereto in an aggregate principal amount, together with any
Refinancing Indebtedness thereof, not to exceed U.S.$100.0 million, at any one time
outstanding;

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     (17) Indebtedness incurred to finance the Contingent Tax Liabilities in an aggregate
principal amount not to exceed U.S.$200.0 million at any one time outstanding;

     (18) Indebtedness of Persons incurred and outstanding on the date on which such Person
was acquired by the Issuer or any Restricted Subsidiary, or merged or consolidated with or
into the Issuer or any Restricted Subsidiary (other than Indebtedness incurred in connection
with, or in contemplation of, such acquisition, merger or consolidation); provided, however,
that at the time such Person or assets is/are acquired by the Issuer or a Restricted
Subsidiary, or merged or consolidated with the Issuer or any Restricted Subsidiary and after
giving pro forma effect to the incurrence of such Indebtedness pursuant to this clause (18)
and any other related Indebtedness, either (i) the Issuer would have been able to incur
U.S.$1.00 of additional Indebtedness pursuant to the first paragraph of this covenant; or
(ii) the Consolidated Interest Coverage Ratio of the Issuer and its Restricted Subsidiaries
would be greater than or equal to such Consolidated Interest Coverage Ratio immediately
prior to such acquisition, merger or consolidation; and

     (19) Indebtedness representing deferred compensation to directors, officers, members of
management or employees (in their capacities as such) of the Issuer or any Restricted
Subsidiary and incurred in the ordinary course of business.

     For purposes of determining compliance with this Section 4.9, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness
described in clauses (1) through (19) above or is entitled to be incurred pursuant to the Coverage
Ratio Exception, the Issuer shall, in its sole discretion, classify such item of Indebtedness and
may divide and classify such Indebtedness in more than one of the types of Indebtedness described,
except that Indebtedness incurred under the Credit Agreement on or prior to the Issue Date shall be
deemed to have been incurred under clause (1) above, and may later reclassify any item of
Indebtedness described in clauses (1) through (19) above (provided that at the time of
reclassification it meets the criteria in such category or categories). In addition, for purposes
of determining any particular amount of Indebtedness under this Section 4.9, (i) guarantees, Liens
or letter of credit obligations supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included so long as incurred by a Person that could have
incurred such Indebtedness; and (ii) the amount of Indebtedness issued at a price that is less than
the principal amount thereof will be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.

     For the purposes of determining compliance with any U.S. Dollar denominated restriction on the
incurrence of Indebtedness denominated in a currency other than U.S. Dollars, the U.S. Dollar
equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated
based on the relevant currency exchange rate in effect on the earlier of the date that such
Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of
revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other
Indebtedness denominated in a currency other than U.S. Dollars, and such refinancing would cause
the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing,
such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as
the principal amount of such Refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced. The principal amount of any Indebtedness incurred to refinance
other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced,
shall be calculated based on the currency exchange rate applicable to the currencies in which such
Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

     In addition, the Issuer shall not permit any of its Unrestricted Subsidiaries to incur any
Indebtedness other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a

45

 

Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary as of such date (and, if such Indebtedness is not permitted to be incurred as
of such date under this Section 4.9, the Issuer shall be in Default of this Section 4.9).

	 	 	SECTION 4.10 Limitations on Asset Sales.

     (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale unless:

     (1) the Issuer or such Restricted Subsidiary, as the case may be, receives
consideration at least equal to the Fair Market Value (such Fair Market Value to be
determined on the date of contractually agreeing to such Asset Sale) of the shares and
assets subject to such Asset Sale; and

     (2) at least 75.0% of the total consideration from such Asset Sale received by the
Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash
Equivalents.

     For purposes of clause (2) above and for no other purpose, the following shall be deemed to be
cash:

     (a) the amount (without duplication) of any Indebtedness (other than Subordinated
Indebtedness or intercompany Indebtedness) of the Issuer or such Restricted Subsidiary that
is expressly assumed by the transferee of any such assets pursuant to a written novation
agreement that releases the Issuer or such Restricted Subsidiary from further liability
therefor,

     (b) the amount of any securities, notes or other obligations received from such
transferee that are within 180 days after such Asset Sale converted by the Issuer or such
Restricted Subsidiary into cash (to the extent of the cash actually so received),

     (c) any Designated Non-cash Consideration received by the Issuer or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken
together with all other Designated Non-cash Consideration received pursuant to this Section
4.10 (a)(2)(c) that is at that time outstanding, not to exceed the greater of (i) U.S.$75.0
million or (ii) 2.5% of the Issuer’s Consolidated Tangible Assets at the time of receipt of
such Designated Non-cash Consideration, with the Fair Market Value of each item of
Designated Non-cash Consideration being measured at the time received and without giving
effect to subsequent changes in value, and

     (d) the Fair Market Value of (i) any assets (other than securities) received by the
Issuer or any Restricted Subsidiary to be used by it in a Permitted Business, (ii) Equity
Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted
Business that
shall become a Restricted Subsidiary immediately upon the acquisition of such Person by
the Issuer or (iii) a combination of (i) and (ii).

     If at any time any non-cash consideration received by the Issuer or any Restricted Subsidiary,
as the case may be, in connection with any Asset Sale is repaid or converted into or sold or
otherwise disposed of for cash (other than interest received with respect to any such non-cash
consideration), then the date of such repayment, conversion or disposition shall be deemed to
constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be
applied in accordance with this Section 4.10.

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     Any Asset Sale pursuant to a condemnation, expropriation, appropriation or other similar
taking, including by deed in lieu of condemnation, or pursuant to the foreclosure or other
enforcement of a Permitted Lien or exercise by the related lienholder of rights with respect
thereto, including by deed or assignment in lieu of foreclosure shall not be required to satisfy
the conditions set forth in clauses (1) and (2) of this Section 4.10(a).

     Notwithstanding the foregoing, the 75.0% limitation referred to above shall be deemed
satisfied with respect to any Asset Sale in which the cash or Cash Equivalents portion of the
consideration received therefrom, determined in accordance with the foregoing provision on an
after-tax basis, is equal to or greater than what the after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 75.0% limitation.

     (b) If the Issuer or any Restricted Subsidiary engages in an Asset Sale, the Issuer or such
Restricted Subsidiary shall, no later than 365 days following the consummation thereof, apply all
or any of the Net Available Proceeds therefrom to:

     (1) permanently reduce (and permanently reduce commitments with respect thereto): (x)
obligations under the Credit Agreement and/or (y) Indebtedness of the Issuer or a Restricted
Subsidiary that is secured by a Lien (in each case other than any Disqualified Equity
Interests or Subordinated Indebtedness, and other than Indebtedness owed to the Issuer or an
Affiliate of the Issuer);

     (2) permanently reduce obligations under other Indebtedness of the Issuer or a
Restricted Subsidiary (in each case other than any Disqualified Equity Interests or
Subordinated Indebtedness, and other than Indebtedness owed to the Issuer or an Affiliate of
the Issuer); provided that the Issuer shall equally and ratably reduce obligations under the
Notes as provided under Section 3.7, through open market purchases (to the extent such
purchases are at or above 100% of the principal amount thereof) or by making an offer (in
accordance with the procedures set forth below for a Net Proceeds Offer) to all Holders to
purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but
unpaid interest, if any, on the amount of Notes that would otherwise be prepaid; or

     (3) (A) make any capital expenditure or otherwise invest all or any part of the Net
Available Proceeds thereof in the purchase of assets (other than securities and excluding
working capital or current assets for the avoidance of doubt) to be used by the Issuer or
any Restricted Subsidiary in a Permitted Business, (B) acquire Qualified Equity Interests
held by a Person other than the Issuer or any of its Restricted Subsidiaries in a Person
that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall
become a Restricted Subsidiary immediately upon the consummation of such acquisition or (C)
a combination of (A) and (B).

     The amount of Net Available Proceeds not applied or invested as provided in clauses (1)
through (3) of this Section 4.10(b) shall constitute “Excess Proceeds.”

     (c) On the 366th day after an Asset Sale (or, at the Issuer’s option, an earlier date), if the
aggregate amount of Excess Proceeds equals or exceeds U.S.$50.0 million, the Issuer shall be
required to make an offer to purchase or redeem (a “Net Proceeds Offer”) from all Holders and, to
the extent required by the terms of other Pari Passu Indebtedness of the Issuer, to all holders of
other Pari Passu Indebtedness outstanding with similar provisions requiring the Issuer to make an
offer to purchase or redeem such Pari Passu Indebtedness with the proceeds from any Asset Sale, to
purchase or redeem the maximum principal amount of Notes and any such Pari Passu Indebtedness to
which the Net Proceeds Offer applies that may be purchased or redeemed out of the Excess Proceeds,
at an offer price in cash in an amount equal to

47

 

100% of the principal amount of Notes and Pari
Passu Indebtedness plus accrued and unpaid interest thereon, if any, to the date of purchase, in
accordance with the procedures set forth in this Indenture or the agreements governing the Pari
Passu Indebtedness, as applicable, in each case in denominations of $2,000 or integral multiples of
$1,000 in excess thereof.

     To the extent that the sum of the aggregate principal amount of Notes and Pari Passu
Indebtedness so validly tendered pursuant to a Net Proceeds Offer is less than the Excess Proceeds,
the Issuer may use any remaining Excess Proceeds, or a portion thereof, for any purposes not
otherwise prohibited by the provisions of this Indenture. If the aggregate principal amount of
Notes and Pari Passu Indebtedness so validly tendered pursuant to a Net Proceeds Offer exceeds the
amount of Excess Proceeds, the Issuer shall select the Notes and Pari Passu Indebtedness to be
purchased on a pro rata basis on the basis of the aggregate outstanding principal amount of Notes
and Pari Passu Indebtedness. Upon completion of such Net Proceeds Offer in accordance with the
foregoing provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer
was made shall be deemed to be zero.

     (d) The Net Proceeds Offer will remain open for a period of 20 Business Days following its
commencement, except to the extent that a longer period is required by applicable law (the “Net
Proceeds Offer Period”). No later than five Business Days after the termination of the Net
Proceeds Offer Period (the “Net Proceeds Purchase Date”), the Issuer will purchase the principal
amount of Notes and Pari Passu Indebtedness required to be purchased pursuant to this Section 4.10
(the “Net Proceeds Offer Amount”) or, if less than the Net Proceeds Offer Amount has been so
validly tendered, all Notes and Pari Passu Indebtedness validly tendered in response to the Net
Proceeds Offer.

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

     Pending the final application of any Net Available Proceeds pursuant to this Section 4.10, the
Issuer or such Restricted Subsidiary holding such Net Available Proceeds may apply such Net
Available Proceeds temporarily to reduce Indebtedness outstanding under a revolving Credit Facility
or otherwise invest such Net Available Proceeds in any manner not prohibited by this Indenture.

     On or before the Net Proceeds Purchase Date, the Issuer will, to the extent lawful, accept for
payment, on a pro rata basis to the extent necessary, the Net Proceeds Offer Amount of Notes and
Pari Passu Indebtedness or portions of Notes and Pari Passu Indebtedness so validly tendered and
not properly withdrawn pursuant to the Net Proceeds Offer, or if less than the Net Proceeds Offer
Amount has been validly tendered and not properly withdrawn, all Notes and Pari Passu Indebtedness
so validly tendered and not properly withdrawn, in each case in denominations of $2,000 and
integral multiples of $1,000 in excess thereof. The Issuer will deliver to the Trustee an
Officers’ Certificate stating that such Notes or
portions thereof were accepted for payment by the Issuer in accordance with the terms of this
Section 4.10 and, in addition, the Issuer will deliver all certificates and notes required, if any,
by the agreements governing the Pari Passu Indebtedness. The Issuer or the Trustee, as the case
may be, will promptly (but in any case not later than five Business Days after termination of the
Net Proceeds Offer Period) mail or deliver to each tendering Holder and the Issuer will mail or
deliver to each tendering holder or lender of Pari Passu Indebtedness, as the case may be, an
amount equal to the purchase price of the Notes or Pari Passu Indebtedness so validly tendered and
not properly withdrawn by such holder or lender, as the case may be, and accepted by the Issuer for
purchase, and the Issuer will promptly issue a new Note, and the Trustee, upon delivery of an
Officers’ Certificate from the Issuer, will authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note surrendered; provided
that each such new Note will be in a principal amount of $2,000 or an integral

48

 

multiple of $1,000
in excess thereof. In addition, the Issuer will take any and all other actions required by the
agreements governing the Pari Passu Indebtedness. Any Note not so accepted will be promptly mailed
or delivered by the Issuer to the Holder thereof. The Issuer will publicly announce the results of
the Net Proceeds Offer on the Net Proceeds Purchase Date.

     Notwithstanding the foregoing, the sale, conveyance or other disposition of all or
substantially all of the assets of the Issuer and its Restricted Subsidiaries, taken as a whole,
will be governed by Section 4.14 and/or Section 5.1 and not by this Section 4.10.

     The Issuer shall comply with all applicable securities laws and regulations in Canada and any
other applicable laws and regulations in connection with the purchase of Notes pursuant to a Net
Proceeds Offer. To the extent that the provisions of any applicable securities laws or regulations
conflict with this Section 4.10, the Issuer shall comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this Section 4.10 by
virtue of such compliance.

	 	 	SECTION 4.11 Limitation on Transactions with Affiliates.

     (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, in one transaction or a series of related transactions, sell, lease, transfer or
otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (an
“Affiliate Transaction”), involving aggregate payments or consideration in excess of U.S.$2.5
million, unless:

     (1) the terms of such Affiliate Transaction are no less favourable in all material
respects to the Issuer or the Restricted Subsidiary, as the case may be, than those that
would have been obtained in a comparable transaction at the time of such transaction in
arm’s length dealings with a Person who is not such an Affiliate;

     (2) the Issuer delivers to the Trustee, with respect to any Affiliate Transaction
involving aggregate value in excess of U.S.$25.0 million, an Officers’ Certificate
certifying that such Affiliate Transaction complies with clause (1) above and a Secretary’s
Certificate which sets forth and authenticates a resolution that has been adopted by the
Independent Directors approving such Affiliate Transaction; and

     (3) the Issuer delivers to the Trustee, with respect to any Affiliate Transaction
(other than a transaction with AIMCo) involving aggregate value in excess of U.S.$50.0
million, an opinion as to the fairness to the Issuer or such Restricted Subsidiary of such
Affiliate Transaction from a financial point of view or that the Affiliate Transaction
complies with Section 4.11(a)(1), in each case as determined by a Canadian or U.S.
nationally recognized accounting, appraisal or investment banking firm.

     (b) The foregoing restrictions shall not apply to:

     (1) transactions exclusively between or among (a) the Issuer and one or more Restricted
Subsidiaries or (b) Restricted Subsidiaries;

     (2) reasonable director, trustee, officer and employee compensation (including bonuses)
and other benefits (including pursuant to any employment agreement or any retirement,
health, stock option or other benefit plan), payments or loans (or cancellation of loans) to
employees of the Issuer and indemnification arrangements, in each case, as determined in
good faith by the Issuer’s Board of Directors or senior management;

49

 

     (3) the entering into of a tax sharing agreement, or payments pursuant thereto, between
the Issuer and/or one or more Subsidiaries, on the one hand, and any other Person with which
the Issuer or such Subsidiaries are required or permitted to file a consolidated tax return
or with which the Issuer or such Subsidiaries are part of a consolidated group for tax
purposes to be used by such Person to pay taxes, and which payments by the Issuer and the
Restricted Subsidiaries are not in excess of the tax liabilities that would have been
payable by them on a stand-alone basis;

     (4) any Permitted Investments (other than pursuant to clause (1) of the definition
thereof);

     (5) any Restricted Payments which are made in accordance with Section 4.7;

     (6) any agreement in effect on the Issue Date or as thereafter amended or replaced in
any manner that, taken as a whole, is not more disadvantageous to the Holders or the Issuer
in any material respect than such agreement as it was in effect on the Issue Date;

     (7) any transaction with a Person (other than an Unrestricted Subsidiary of the Issuer)
which would constitute an Affiliate of the Issuer solely because the Issuer or a Restricted
Subsidiary owns an equity interest in or otherwise controls such Person; and

     (8) (a) any transaction with an Affiliate where the only consideration paid by the
Issuer or any Restricted Subsidiary is Qualified Equity Interests or (b) the issuance or
sale of any Qualified Equity Interests and the granting of registration and other customary
rights in connection therewith.

     SECTION 4.12 Limitations on Liens. The Issuer shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer to
exist any Lien (other than Permitted Liens) upon any of their property or assets (including Equity
Interests of any Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired,
which Lien secures Indebtedness or trade payables, unless contemporaneously with the incurrence of
such Lien:

     (1) in the case of any Lien securing an obligation that ranks pari passu with the Notes
or a Guarantee, effective provision is made to secure the Notes or such Guarantee, as the
case may be, at least equally and ratably with or prior to such obligation with a Lien on
the same collateral; and

     (2) in the case of any Lien securing an obligation that is subordinated in right of
payment to the Notes or a Guarantee, effective provision is made to secure the Notes or such
Guarantee, as the case may be, with a Lien on the same collateral that is senior to the
Lien securing such subordinated obligation,

     in each case, for so long as such obligation is secured by such Lien.

     SECTION 4.13 Payments for Consent. The Issuer will not, and will not permit any of
its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of
any of the terms or provisions of this Indenture or the Notes unless such consideration is offered
to be paid and is paid to all Holders of the Notes that so consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

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     SECTION 4.14 Offer to Purchase upon Change of Control. Upon the occurrence of any
Change of Control, unless the Issuer has previously or concurrently exercised its right to redeem
all of the Notes as described under Section 3.7, each Holder will have the right to require that
the Issuer purchase all or any portion (equal to $2,000 or an integral multiple of $1,000 in excess
thereof) of that Holder’s Notes for a cash price (the “Change of Control Purchase Price”) equal to
101.0% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest, if
any, thereon to the date of purchase.

     Within 30 days following any Change of Control, the Issuer will deliver, or caused to be
delivered, to the Holders, with a copy to the Trustee, a notice:

     (1) describing the transaction or transactions that constitute the Change of Control;

     (2) offering to purchase, pursuant to the procedures required by this Indenture and
described in the notice (a “Change of Control Offer”), on a date specified in the notice,
which shall be a Business Day not earlier than 30 days, nor later than 60 days, from the
date the notice is delivered (the “Change of Control Payment Date”), and for the Change of
Control Purchase Price, all Notes properly tendered by such Holder pursuant to such Change
of Control Offer; and

     (3) describing the procedures, as determined by the Issuer, consistent with this
Indenture, that Holders must follow to accept the Change of Control Offer.

     On the Business Day immediately preceding the Change of Control Payment Date, the Issuer will,
to the extent lawful, deposit with the Trustee an amount equal to the Change of Control Purchase
Price in respect of the Notes or portions of Notes properly tendered.

     On the Change of Control Payment Date, the Issuer will, to the extent lawful:

     (1) accept for payment all Notes or portions of Notes (of $2,000 or integral multiples
of $1,000 in excess thereof) properly tendered pursuant to the Change of Control Offer; and

     (2) 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 Issuer.

     The Trustee will promptly deliver to each Holder who has so tendered Notes the Change of
Control Purchase Price for such Notes, and the Trustee will promptly 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 so tendered, if any; provided that each such new Note will be in a
principal amount of $2,000 or integral multiples of $1,000 in excess thereof.

     If the Change of Control Payment Date is on or after an interest record date and on or before
the related interest payment date, any accrued and unpaid interest, if any, will be paid on the
relevant interest payment date to the Person in whose name a Note is registered at the close of
business on such record date.

     A Change of Control Offer shall remain open for at least 20 Business Days or for such longer
period as is required by law. The Issuer shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment Date.

     The Issuer’s obligation to make a Change of Control Offer shall be satisfied if a third party
makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the

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

     The Issuer shall comply with all applicable securities legislation in Canada and any other
applicable laws and regulations in connection with the purchase of Notes pursuant to a Change of
Control Offer. To the extent that the provisions of any applicable securities laws or regulations
conflict with this Section 4.14, the Issuer shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this Section 4.14 by
virtue of such compliance.

     The provisions under this Indenture relating to the Issuer’s obligation to make a Change of
Control Offer may be waived, modified or terminated prior to the occurrence of the triggering
Change of Control with the written consent of the Holders of a majority in principal amount of the
Notes then outstanding.

     Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be
made in advance of a Change of Control, conditional upon such Change of Control, if a definitive
agreement is in place for the Change of Control at the time of making of the Change of Control
Offer.

     SECTION 4.15 Corporate Existence. Subject to Section 4.14 and Article V, as the case
may be, the Issuer shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate, partnership, limited liability company
or other existence of each of its Subsidiaries in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Issuer or any such Subsidiary and
the rights (charter and statutory), licenses and franchises of the Issuer and its Subsidiaries;
provided that the Issuer shall not be required to preserve any such right, license or franchise, or
the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors
of the Issuer shall determine that the preservation thereof is no longer desirable in the conduct
of the business of the Issuer and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders.

     SECTION 4.16 Business Activities. The Issuer shall engage, and shall cause its
Restricted Subsidiaries to engage, only in businesses that, when considered together as a single
enterprise, are primarily the Permitted Business.

     SECTION 4.17 Additional Guarantees. If any Restricted Subsidiary of the Issuer shall
guarantee any Indebtedness of the Issuer or any Guarantor under a Credit Facility or under debt
securities issued in the capital markets (including the Unsecured Notes) except for any such
Subsidiary if the Fair Market Value of the assets of such Subsidiary together with the Fair Market
Value of the assets of any other Subsidiaries that guaranteed such Indebtedness of the Issuer or
any Guarantor but did not guarantee the Notes, does not exceed U.S.$20.0 million in the aggregate,
then the Issuer shall cause such Restricted Subsidiary to:

     (1) execute and deliver to the Trustee a supplemental indenture in substantially the
form attached hereto as Exhibit B, pursuant to which such Restricted Subsidiary
shall unconditionally guarantee, on a joint and several basis, the full and prompt payment
of the principal of, premium, if any, and interest in respect of the Notes on a senior basis
and all other obligations of the Issuer under this Indenture; and

     (2) deliver to the Trustee one or more Opinions of Counsel that such supplemental
indenture (a) has been duly authorized, executed and delivered by such Restricted Subsidiary
and (b) constitutes a valid and legally binding obligation of such Restricted Subsidiary in
accordance with its terms.

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     SECTION 4.18 Limitations on Designation of Unrestricted Subsidiaries.

     The Board of Directors of the Issuer may designate any Subsidiary (including any newly formed
or newly acquired Subsidiary or a Person becoming a Subsidiary through merger or consolidation or
Investment therein) of the Issuer as an “Unrestricted Subsidiary” under this Indenture (a
“Designation”) only if:

     (1) no Default shall have occurred and be continuing at the time of or after giving
effect to such Designation; and

     (2) the Issuer would be permitted to make, at the time of such Designation, (a) a
Permitted Investment or (b) an Investment pursuant to Section 4.7(a), in either case, in an
amount (the “Designation Amount”) equal to the Fair Market Value of the Issuer’s
proportionate interest in such Subsidiary on such date.

     No Subsidiary shall be Designated as an “Unrestricted Subsidiary” unless:

     (1) all of the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date
of Designation, consist of Non-Recourse Debt, except for any guarantee given solely to
support the pledge by the Issuer or any Restricted Subsidiary of the Equity Interests of
such Unrestricted Subsidiary, which guarantee is not recourse to the Issuer or any
Restricted Subsidiary;

     (2) on the date such Subsidiary is Designated an Unrestricted Subsidiary, such
Subsidiary is not party to any agreement, contract, arrangement or understanding with the
Issuer or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement
or understanding are no less favourable in any material respect to the Issuer or the
Restricted Subsidiary than those that would be obtained at the time from Persons who are not
Affiliates of the Issuer;

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

     (4) such Subsidiary has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Issuer or any Restricted Subsidiary, except for
any guarantee given solely to support the pledge by the Issuer or any Restricted Subsidiary
of the Equity Interests of such Unrestricted Subsidiary, which guarantee is not recourse to
the Issuer or any Restricted Subsidiary.

     Any such Designation by the Board of Directors of the Issuer shall be evidenced to the Trustee
by filing with the Trustee a resolution of the Board of Directors of the Issuer giving effect to
such Designation and an Officers’ Certificate certifying that such Designation complies with the
foregoing conditions. If, at any time, any Unrestricted Subsidiary fails to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of the Subsidiary and any Liens on
assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary at such time
and, if the Indebtedness is not permitted to be incurred under Section 4.9 or the Lien is not
permitted under Section 4.12, the Issuer shall be in default of the applicable covenant.

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     The Board of Directors of the Issuer may redesignate an Unrestricted Subsidiary as a
Restricted Subsidiary (a “Redesignation”) only if:

     (1) no Default shall have occurred and be continuing at the time of and after giving
effect to such Redesignation; and

     (2) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding
immediately following such Redesignation would, if incurred or made at such time, have been
permitted to be incurred or made for all purposes of this Indenture.

     Any such Redesignation shall be evidenced to the Trustee by filing with the Trustee a
resolution of the Board of Directors of the Issuer giving effect to such designation and an
Officers’ Certificate certifying that such Redesignation complies with the foregoing conditions.

     SECTION 4.19 Further Instruments and Acts. Upon request by the Trustee, the Issuer
shall execute and deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this Indenture.

     SECTION 4.20 Covenant Termination(a) . (a) Following the first date that the Notes
have a Moody’s rating of Baa3 or higher and an S&P rating of BBB- or higher (collectively, an
“Investment Grade Rating”) and no Default or Event of Default has occurred and is then continuing,
the Issuer and the Restricted Subsidiaries will no longer be subject to the following covenants:

     (1) Section 4.7 (except to the extent applicable under the definition of “Unrestricted
Subsidiary”);

     (2) Section 4.8;

     (3) Section 4.9;

     (4) Section 4.10;

     (5) Section 4.11;

     (6) Section 4.16; and

     (7) Section 5.1(a)(3).

     (b) The Issuer will notify the Trustee in writing in the event the Notes have an Investment
Grade Rating. No Trustee or Agent shall have any liability or responsibility with respect to, or
obligation or duty to monitor, determine or inquire as to (i) the Issuer or any Guarantor’s
compliance with any covenant under this Indenture (other than the covenant to make payment on the
Notes) or (ii) as to whether or not Moody’s or S&P has adjusted the rating of the Notes.

ARTICLE V

SUCCESSORS

	 	 	SECTION 5.1 Consolidation, Merger, Conveyance, Transfer or Lease.

     (a) The Issuer will not, directly or indirectly, in a single transaction or a series of
related transactions, consolidate, amalgamate or merge with or into or wind up or dissolve into
another Person (whether or not the Issuer is the surviving Person), or sell, lease, transfer,
convey or otherwise dispose of

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or assign all or substantially all of the assets of the Issuer and
its Restricted Subsidiaries (taken as a whole) unless:

     (1) either:

     (a) the Issuer will be the surviving or continuing Person; or

     (b) the Person (if other than the Issuer) formed by or surviving or continuing
from such consolidation, merger, amalgamation, winding up or dissolution or to which
such sale, lease, transfer, conveyance or other disposition or assignment shall be
made (collectively, the “Successor”) is a corporation, limited liability company or
limited partnership organized and existing under the laws of Canada or any province
thereof or the United States of America or of any State of the United States of
America or the
District of Columbia, and the Successor expressly assumes, by agreements in
form and substance reasonably satisfactory to the Trustee, all of the obligations of
the Issuer under the Notes and this Indenture; provided, that if the Successor is
not a corporation, a Restricted Subsidiary that is a corporation expressly assumes
as co-obligor all of the obligations of the Issuer under this Indenture and the
Notes pursuant to a supplemental indenture to this Indenture executed and delivered
to the Trustee;

     (2) immediately after giving effect to such transaction and the assumption of the
obligations as set forth in clause (1)(b) above and the incurrence of any Indebtedness to be
incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma
basis, no Default shall have occurred and be continuing;

     (3) immediately after giving pro forma effect to such transaction and the assumption of
the obligations as set forth in clause (1)(b) above and the incurrence of any Indebtedness
to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro
forma basis, (i) the Issuer or its Successor, as the case may be, could incur U.S.$1.00 of
additional Indebtedness pursuant to the Coverage Ratio Exception or (ii) the Consolidated
Interest Coverage Ratio for the Issuer or its Successor, as the case may be, and its
Restricted Subsidiaries would be greater than or equal to such Consolidated Interest
Coverage Ratio prior to such transaction; and

     (4) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such merger, amalgamation, consolidation or transfer
and such agreement and/or supplemental indenture (if any) comply with this Indenture.

     For purposes of this Section 5.1, any Indebtedness of the Successor which was not Indebtedness
of the Issuer immediately prior to the transaction shall be deemed to have been incurred in
connection with such transaction.

     (b) Subject to Section 10.5, no Guarantor will, and the Issuer will not permit any Guarantor
to, directly or indirectly, in a single transaction or a series of related transactions,
consolidate, amalgamate or merge with or into or wind up or dissolve into another Person (whether
or not the Guarantor is the surviving Person), or sell, lease, transfer, convey or otherwise
dispose of or assign all or substantially all of its assets to any Person unless either:

     (1)

     (a) such Guarantor will be the surviving or continuing Person; or (ii) the
Person (if other than such Guarantor) formed by or surviving any such consolidation,

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merger, amalgamation, winding-up or dissolution is another Guarantor or assumes, by
agreements in form and substance reasonably satisfactory to the Trustee, all of the
obligations of such Guarantor under the Guarantee of such Guarantor and this
Indenture;

     (b) immediately after giving effect to such transaction, no Default shall have
occurred and be continuing; and

     (c) the Issuer shall have delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that such merger, amalgamation, consolidation or
transfer and such agreements and/or supplemental indenture (if any) comply with this
Indenture; or

     (2) the transaction is made in compliance with Section 4.10.

     For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a
single transaction or series of transactions) of all or substantially all of the properties or
assets of one or more Restricted Subsidiaries of the Issuer, the Equity Interests of which
constitute all or substantially all of the properties and assets of the Issuer, will be deemed to
be the transfer of all or substantially all of the properties and assets of the Issuer.

     (c) Upon any consolidation, amalgamation or merger of the Issuer or a Guarantor, or any
transfer of all or substantially all of the assets of the Issuer in accordance with the foregoing,
in which the Issuer or such Guarantor is not the continuing obligor under the Notes or its
Guarantee, as applicable, the surviving entity formed by such consolidation or amalgamation or into
which the Issuer or such Guarantor is merged or the Person to which the sale, conveyance, lease,
transfer, disposition or assignment is made will succeed to, and be substituted for, and may
exercise every right and power of, the Issuer or such Guarantor under this Indenture, the Notes and
the Guarantee with the same effect as if such surviving entity had been named therein as the Issuer
or such Guarantor and, except in the case of a lease, the Issuer or such Guarantor, as the case may
be, will be released from the obligation to pay the principal of and interest on the Notes or in
respect of its Guarantee, as the case may be, and all of the Issuer’s or such Guarantor’s other
obligations and covenants under the Notes, this Indenture and its Guarantee, if applicable.

     (d) Notwithstanding the foregoing, (i) any Restricted Subsidiary may consolidate, merge or
amalgamate with or into or convey, transfer or lease, in one transaction or a series of
transactions, all or substantially all of its assets to the Issuer or another Restricted Subsidiary
and (ii) any Guarantor may consolidate, merge or amalgamate with or into or convey, transfer or
lease, in one transaction or a series of transactions, all or part of its properties and assets to
the Issuer or another Guarantor or merge with a Restricted Subsidiary of the Issuer solely for the
purpose of reincorporating the Guarantor in Canada or a province thereof, a State of the United
States or the District of Columbia, as long as the amount of Indebtedness of the Issuer or such
Guarantor and its Restricted Subsidiaries is not increased thereby.

ARTICLE VI

DEFAULTS AND REMEDIES

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

     (1) failure to pay interest on any of the Notes when the same becomes due and payable
and the continuance of any such failure for 30 days;

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     (2) failure to pay principal of or premium, if any, on any of the Notes when it becomes
due and payable, whether at Stated Maturity, upon redemption, upon purchase, upon
acceleration or otherwise;

     (3) failure by the Issuer or any of its Restricted Subsidiaries to comply with any of
their respective agreements or covenants described in Section 5.1, or failure by the Issuer
to comply in respect of its obligations to make a Change of Control Offer pursuant to
Section 4.14;

     (4) (a) except with respect to Section 4.3, failure by the Issuer or any Restricted
Subsidiary to comply with any other agreement or covenant in this Indenture and continuance
of this failure for 60 days after notice of the failure has been given to the Issuer by the
Trustee or to the Issuer and the Trustee by the Holders of at least 25.0% of the aggregate
principal amount of the Notes then outstanding, or (b) failure by the Issuer for 120 days
after notice of the failure has
been given to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders
of at least 25.0% of the aggregate principal amount of the Notes then outstanding to comply
with Section 4.3;

     (5) default by the Issuer or any Significant Subsidiary of the Issuer under any
mortgage, indenture or other instrument or agreement under which there may be issued or by
which there may be secured or evidenced Indebtedness for borrowed money by the Issuer or any
Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the Issue
Date, which default:

     (a) is caused by a failure to pay at its Stated Maturity principal on such
Indebtedness within the applicable express grace period and any extensions thereof,
or

     (b) results in the acceleration of such Indebtedness prior to its Stated
Maturity (which acceleration is not rescinded, annulled or otherwise cured within 30
days of receipt by the Issuer or such Restricted Subsidiary of notice of any such
acceleration),

and, in each case, the principal amount of such Indebtedness, together with the principal
amount of any other Indebtedness with respect to which an event described in clause (a) or
(b) has occurred and is continuing, aggregates U.S.$50.0 million or more;

     (6) one or more judgments (to the extent not covered by insurance) for the payment of
money in an aggregate amount in excess of U.S.$50.0 million shall be rendered against the
Issuer, any of its Significant Subsidiaries or any combination thereof and the same shall
remain undischarged for a period of 60 consecutive days during which execution shall not be
effectively stayed;

     (7)

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

     (i) commences a voluntary case,

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

     (iii) consents 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) generally is not paying its debts as they become due; or

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

     (i) is for relief against the Issuer or any Significant Subsidiary of
the Issuer or group of Restricted Subsidiaries of the Issuer that, taken
together (as of the latest audited consolidated financial statements for the
Issuer and its Restricted Subsidiaries), would constitute a Significant
Subsidiary, in an involuntary case;

     (ii) appoints a custodian of the Issuer or any Significant Subsidiary
of the Issuer or group of Restricted Subsidiaries of the Issuer that, taken
together (as of the latest audited consolidated financial statements for the
Issuer and its Restricted Subsidiaries), would constitute a Significant
Subsidiary or for all or substantially all of the property of the Issuer or
any of its Restricted Subsidiaries; or

     (iii) orders the liquidation of the Issuer or any Significant
Subsidiary of the Issuer or group of Restricted Subsidiaries of the Issuer
that, taken together (as of the latest audited consolidated financial
statements for the Issuer and its Restricted Subsidiaries), would constitute
a Significant Subsidiary and the order or decree remains unstayed and in
effect for 60 consecutive days; or

     (8) any Guarantee ceases to be in full force and effect (other than in accordance with
the terms of such Guarantee and this Indenture) or is declared null and void and
unenforceable or found to be invalid or any Guarantor denies its liability under the
Guarantee of such Guarantor (other than by reason of release of such Guarantor from its
Guarantee in accordance with the terms of this Indenture and the Guarantee).

     SECTION 6.2 Acceleration. If an Event of Default (other than an Event of Default
specified in Section 6.1(7)) shall have occurred and be continuing under this Indenture, the
Trustee, by written notice to the Issuer, or the Holders of at least 25.0% in aggregate principal
amount of the Notes then outstanding by written notice to the Issuer and the Trustee, may declare
(an “acceleration declaration”) all amounts owing under the Notes to be due and payable. Upon such
acceleration declaration, the aggregate principal of and accrued and unpaid interest on the
outstanding Notes shall become due and payable immediately.

     If an Event of Default specified in clause (7) of Section 6.1 occurs, then all unpaid
principal of, and premium, if any, and accrued and unpaid interest on all of the outstanding Notes
shall ipso facto become and be immediately due and payable without any declaration or other act on
the part of the Trustee or any Holder of the Notes to the extent permitted by applicable law.

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     After such acceleration, but before a judgment or decree based on acceleration, the Holders of
a majority in aggregate principal amount of the Notes then outstanding may rescind and annul such
acceleration if:

     (1) the rescission would not conflict with any judgment or decree;

     (2) all existing Events of Default have been cured or waived other than nonpayment of
accelerated principal and interest;

     (3) to the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise than by such
declaration of acceleration, has been paid;

     (4) the Issuer has paid the Trustee its reasonable compensation and reimbursed the
Trustee for its reasonable expenses, disbursements and advances; and

     (5) in the event of the cure or waiver of an Event of Default other than as described
in clauses (1), (2) or (7) of Section 6.1, the Trustee shall have received an Officers’
Certificate and an Opinion of Counsel that such Event of Default has been cured or waived.

     No such rescission shall affect any subsequent Default or impair any right consequent thereto.

     SECTION 6.3 Remedies Cumulative; Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment of principal,
premium, if any, and interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture. No remedy herein conferred upon or reserved to the Trustee, or upon or to
the Holder is intended to be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now existing or
hereafter to exist by law or by statute.

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

     SECTION 6.4 Waiver of Past Defaults. Subject to Section 9.2, the Holders of a
majority in aggregate principal amount of the Notes then outstanding by written notice to the
Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any
existing Default or Event of Default and its consequences under this Indenture except a continuing
Default or Event of Default in the payment of interest or premium on, or the principal of, the
Notes, which shall require the consent of all of the Holders of the Notes then outstanding.

     SECTION 6.5 Control by Majority. The Holders of a majority in aggregate 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 power
conferred on it. However, (i) the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, that may involve the Trustee in personal liability, or that the Trustee
determines in good faith may be unduly prejudicial to the rights of Holders not joining in the
giving of such direction and (ii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with any such direction received from the Holders.

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     SECTION 6.6 Limitation on Suits. A Holder may pursue a remedy with respect to this
Indenture or the Notes only if:

     (a) the Holder gives to the Trustee written notice of a continuing Event of Default or
the Trustee receives such notice from the Issuer;

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

     (c) such Holder or Holders offer the Trustee indemnity satisfactory to the Trustee
against any costs, liability or expense;

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

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

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

     SECTION 6.7 Rights of Holders of Notes to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of principal of, premium,
if any, or interest on, such Note or to bring suit for the enforcement of any such payment, on or
after the due date expressed in the Notes, shall not be impaired or affected without the consent of
the Holder.

     SECTION 6.8 Collection Suit by Trustee. If an Event of Default specified in Section
6.1(1) or Section 6.1(2) occurs and is continuing, the Trustee is authorized to recover judgment in
its own name and as trustee of an express trust against the Issuer for the whole amount of
principal of, premium and interest remaining unpaid on the Notes and interest on overdue principal
and, to the extent lawful, 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 6.9 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 allowed in any judicial
proceedings relative to the Issuer (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute any money or other
securities or property payable or deliverable upon the conversion or exchange of the Notes or 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 7.14. To the extent that the payment
of any such compensation, expenses, disbursements and advances to the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.14 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

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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 or property pursuant to
this Article VI, it shall pay out the money and property in the following order:

     First: to the Trustee, its agents and attorneys for amounts due under Section 7.14,
including payment of all reasonable compensation, expenses and liabilities incurred, and all
advances made, by it and the costs and expenses of collection;

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

     Third: without duplication, to the Holders for any other Obligations owing to the
Holders under this Indenture and the Notes; and

     Fourth: to the Issuer 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 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 and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.

ARTICLE VII

TRUSTEE

	 	 	SECTION 7.1 Corporate Trustee Required; Eligibility.

     (a) For so long as required by Trust Indenture Legislation, the Trustee shall be a resident or
authorized to do business in the Province of Alberta. The Trustee represents to the Issuer that at
the date of execution and delivery by it of this Indenture, it is authorized to carry on the
business of a trust company in the Province of Alberta but if, notwithstanding the provisions of
this Section 7.1(a), it ceases to be so authorized to carry on business, the validity and
enforceability of this Indenture and the Notes shall not be affected in any manner whatsoever by
reason only of such event but the Trustee shall, within 90 days after ceasing to be authorized to
carry on the business of trust company in the Province of Alberta, either become so authorized or
resign in the manner and with the effect specified in Section 7.2.

     (b) The Trustee represents to the Issuer that at the date of execution and delivery by it of
this Indenture, there exists no material conflict of interest in the role of the Trustee as a
fiduciary hereunder but if, notwithstanding the provisions of this Section 7.1, such a material
conflict of interest exists, or hereafter arises, the validity and enforceability of this
Indenture, and the Notes issued hereunder, shall not be affected in any manner whatsoever by reason
only that such material conflict of interest exists or arises

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but the Trustee shall, within 30 days
after ascertaining that it has a material conflict of interest, either eliminate such material
conflict of interest or resign in the manner and with the effect specified in Section 7.2.

     (c) The Trustee will not be required to give any bond or security in respect of the execution
of the trusts and powers set out in this Indenture or otherwise in respect of the premises.

     (d) Neither the Trustee nor any Affiliate of the Trustee shall be appointed a receiver or
receiver and manager or liquidator of all or any part of the assets or undertaking of the Issuer.

     SECTION 7.2 Replacement of Trustee. The Trustee may resign its trust and be
discharged from all further duties and liabilities hereunder by giving to the Issuer 90 days’
notice in writing or such shorter notice as the Issuer may accept as sufficient. In the event of
the Trustee resigning or being removed or being dissolved, becoming bankrupt, going into
liquidation or otherwise becoming incapable of acting hereunder, the Issuer shall forthwith appoint
a new Trustee unless a new Trustee has already been appointed by the Holders in accordance with
this Section 7.2. Failing such appointment by the Issuer, the retiring Trustee or any Holder may
apply to a Judge of the Alberta Court of Queen’s Bench, on such notice as such Judge may direct at
the Issuer’s expense, for the appointment of a new Trustee but any new Trustee so appointed by the
Issuer or by the court shall be subject to removal as aforesaid by the Holders and the appointment
of such new Trustee shall be effective only upon such new Trustee becoming bound by this Indenture.
Any new Trustee appointed under any provision of this Section 7.2 to replace the Trustee shall be a
corporation authorized to carry on the business of a trust company in the Province of Alberta. On
any new appointment, the new Trustee shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as Trustee.

     The Holders of not less than a majority in aggregate principal amount of the outstanding Notes
shall have the power to remove the Trustee from office and to appoint a new Trustee or Trustees
provided that no such removal shall be effective unless and until a new Trustee or Trustees shall
have become bound by this Indenture.

     Any company into which the Trustee may be merged or, with or to which it may be consolidated,
amalgamated or sold, or any company resulting from any merger, consolidation, sale or amalgamation
to which the Trustee shall be a party, or any company succeeding to the corporate trust business of
the Trustee shall be the successor Trustee under this Indenture without the execution of any
instrument or any further act. Nevertheless, upon the written request of the successor Trustee or
of the Issuer, the Trustee ceasing to act shall execute and deliver an instrument assigning and
transferring to such successor Trustee, upon trusts herein expressed, all the rights, powers and
trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver all property
and money held by the Trustee to the successor Trustee so appointed in its place. Should any deed,
conveyance or instrument in writing from the Issuer be required by any new Trustee for more fully
and certainly vesting in and confirming to it such estates, properties, rights, powers and trusts,
then any and all such deeds, conveyances and instruments in writing shall on request of said new
Trustee, be made, executed, acknowledged and delivered by the Issuer.

     SECTION 7.3 Duties of Trustee. In the exercise of the rights, duties and obligations
prescribed or conferred by the terms of this Indenture, the Trustee shall act honestly and in good
faith and exercise that degree of care, diligence and skill that a reasonably prudent trustee would
exercise in comparable circumstances.

     SECTION 7.4 Reliance Upon Declarations, Opinions, etc. In the exercise of its rights,
duties and obligations hereunder, the Trustee may, if acting in good faith, act and rely, as to the
truth of the statements and accuracy of the opinions expressed therein, upon statutory
declarations, opinions, reports

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or certificates furnished pursuant to any covenant, condition or
requirement of this Indenture or the Trust Indenture Legislation or required by the Trustee to be
furnished to it in the exercise of its rights and duties hereunder, if the Trustee examines such
statutory declarations, opinions, reports or certificates and determines that they comply with
Section 7.5, if applicable, and with any other applicable requirements of this Indenture. The
Trustee may nevertheless, in its discretion, require further proof in cases where it deems further
proof desirable. Without restricting the foregoing,
the Trustee may rely on an Opinion of Counsel satisfactory to the Trustee notwithstanding that
it is delivered by a solicitor or firm which acts as solicitors for the Issuer.

     SECTION 7.5 Evidence and Authority to Trustee, Opinions, etc. The Issuer shall furnish
to the Trustee evidence of compliance with the conditions precedent provided for in this Indenture
relating to any action or step required or permitted to be taken by the Issuer or the Trustee under
this Indenture or as a result of any obligation imposed under this Indenture, including without
limitation, the certification and delivery of Notes hereunder, the satisfaction and discharge of
this Indenture and the taking of any other action to be taken by the Trustee at the request of or
on the application of the Issuer, forthwith if and when (a) such evidence is required by any other
Section of this Indenture to be furnished to the Trustee in accordance with the terms of this
Section 7.5, or (b) the Trustee, in the exercise of its rights and duties under
this Indenture, gives the Issuer written notice requiring it to furnish such evidence in relation
to any particular action or obligation specified in such notice.

     Such evidence shall consist of:

     (a) an Officers’ Certificate stating that any such condition precedent has been complied with;

     (b) in the case of a condition precedent compliance with which is, by the terms of this
Indenture, made subject to review or examination by a solicitor, an Opinion of Counsel that such
condition precedent has been complied with in accordance with the terms of this Indenture; and

     (c) in the case of any such condition precedent compliance with which is subject to review or
examination by auditors or accountants, an opinion or report of the auditors of the Issuer that
such condition precedent has been complied with.

     Whenever such evidence relates to a matter other than the certificates and delivery of Notes
and the satisfaction and discharge of this Indenture, and except as otherwise specifically provided
herein, such evidence may consist of a report or opinion of any solicitor, auditor, accountant,
engineer or appraiser or any other Person whose qualifications give authority to a statement made
by him, provided that if such report or opinion is furnished by a director, officer or employee of
the Issuer, it shall be in the form of a statutory declaration. Such evidence shall be, so far as
appropriate, in accordance with the immediately preceding paragraph of this Section 7.5.

     Each statutory declaration, certificate, opinion or report with respect to compliance with a
condition precedent provided for in this Indenture shall include (a) a statement by the Person
giving the evidence that he has read and is familiar with those provisions of this Indenture
relating to the condition precedent in question, (b) a brief statement of the nature and scope of
the examination or investigation upon which the statements or opinions contained in such evidence
are based, (c) a statement that, in the belief of the Person giving such evidence, he has made such
examination or investigation as is necessary to enable him to make the statements or give the
opinions contained or expressed therein, and (d) a statement whether in the opinion of such Person
the conditions precedent in question have been complied with or satisfied.

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     The Issuer shall furnish to the Trustee at any time if the Trustee reasonably so requires, a
certificate that the Issuer has complied with all covenants, conditions or other requirements
contained in this Indenture, the non-compliance with which would, with the giving of notice or the
lapse of time, or both, or otherwise, constitute an Event of Default. The Issuer shall, whenever
the Trustee so requires, furnish the Trustee with evidence by way of statutory declaration,
opinion, report or Officers’ Certificate
as specified by the Trustee as to any action or step required or permitted to be taken by the
Issuer or as a result of any obligation imposed by this Indenture.

     SECTION 7.6 Officers’ Certificates Evidence. Except as otherwise specifically
provided or prescribed by this Indenture, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established
prior to taking or omitting any action hereunder, the Trustee, if acting in good faith, may rely
upon an Officers’ Certificate.

     SECTION 7.7 Experts, Advisers and Agents. The Trustee may employ or retain such
counsel, accountants, appraisers, engineers or other experts or advisors as it reasonably requires
for the purpose of determining and discharging its duties and administering the trusts hereunder
and may pay reasonable remuneration for all services so performed by any of them, without taxation
of costs of any counsel, and shall not be responsible for any misconduct on the part of any of
them. Any remuneration so paid by the Trustee shall be repaid to the Trustee in accordance with
Section 7.14.

     The Trustee may act and rely and shall be protected in acting and relying in good faith on the
opinion or advice of or information obtained from any counsel, accountant, appraiser, engineer or
other expert or advisor, whether retained or employed by the Issuer or by the Trustee, in relation
to any matter arising in the administration of the trust hereof.

     SECTION 7.8 Trustee May Deal in Notes. Subject to Section 7.1 and Section 7.3, the
Trustee may, in its personal or other capacity, buy, sell, lend upon and deal in the Notes and
generally contract and enter into financial transactions with the Issuer or otherwise, without
being liable to account for any profits made thereby.

     SECTION 7.9 Investment of Monies Held By Trustee. Unless otherwise provided in this
Indenture, any moneys held by the Trustee which under the trusts of this Indenture may or ought to
be invested or which may be on deposit with the Trustee or which may be in the hands of the Trustee
may be invested and re-invested in the name or under the control of the Trustee in securities in
which, under the laws of the Province of Alberta, trustees are authorized to invest trust moneys,
provided that such securities are expressed to mature within at least two years after their
purchase by the Trustee, and unless and until the Trustee shall have declared the principal of and
interest and premium, if any, on the Notes to be due and payable, the Trustee shall so invest such
moneys at the request of the Issuer.

     Pending the investment of any moneys as hereinbefore provided, such moneys may be deposited in
the name of the Trustee in any chartered bank of Canada or, with the consent of the Issuer, in the
deposit department of the Trustee, an Affiliate of the Trustee or any other loan or trust company
authorized to accept deposits under the laws of Canada or any province thereof at the rate of
interest then current on similar deposits.

     Unless and until the Trustee shall have declared the principal of and interest on the Notes to
be due and payable, the Trustee shall pay over to the Issuer all interest received by the Trustee
in respect of any investments or deposits made pursuant to the provisions of this Section 7.9.

     SECTION 7.10 Trustee Not Ordinarily Bound. Except as otherwise specifically provided
herein, the Trustee shall not, subject to Section 7.3, be bound to give notice to any Person of the execution

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hereof, nor to do, observe or perform or see to the observance or performance by the
Issuer of any of the obligations herein imposed upon the Issuer or of the covenants on the part of
the Issuer herein contained, nor in any way to supervise or interfere with the conduct of the
Issuer’s business, unless the Trustee shall have been required to do so in writing by the Holders
of not less than 25% of the aggregate principal amount of the Notes then outstanding, and then only
after it shall have been funded and indemnified to its satisfaction against all actions,
proceedings, claims and demands to which it may render itself liable and all costs, charges,
damages and expenses which it may incur by so doing.

     SECTION 7.11 Trustee Not Required to Give Security. The Trustee shall not be required
to give any bond or security in respect of the execution of the trusts and powers of this Indenture
or otherwise in respect of the premises.

     SECTION 7.12 Trustee Not Bound to Act on the Issuer’s Request. Except as in this
Indenture otherwise specifically provided, the Trustee shall not be bound to act in accordance with
any direction or request of the Issuer until a duly authenticated copy of the instrument or
resolution containing such direction or request shall have been delivered to the Trustee, and the
Trustee shall be empowered to act upon any such copy purporting to be authenticated and believed by
the Trustee to be genuine.

     SECTION 7.13 Conditions Precedent to Trustee’s Obligations to Act Hereunder. The
obligation of the Trustee to commence or continue any act, action or proceeding for the purpose of
enforcing the rights of the Trustee and of the Holders hereunder shall be conditional upon the
Holders furnishing when required by notice in writing by the Trustee, sufficient funds to commence
or continue such act, action or proceeding and indemnity reasonably satisfactory to the Trustee to
protect and hold harmless the Trustee against the costs, charges and expenses and liabilities to be
incurred thereby and any loss and damage it may suffer by reason thereof.

     None of the provisions contained in this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers unless indemnified as aforesaid.

     The Trustee may, before commencing or at any time during the continuance of any such act,
action or proceeding, require the Holders at whose instance it is acting to deposit with the
Trustee the Notes held by it for which Notes the Trustee shall issue receipts.

	 	 	SECTION 7.14 Compensation and Indemnity.

     (a) The Issuer shall pay to the Trustee from time to time compensation for its services
hereunder as agreed separately by the Issuer and the Trustee, and shall pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in the administration or execution of its duties under this Indenture (including the
reasonable and documented compensation and disbursements of its Counsel and all other advisers and
assistants not regularly in its employ), both before any default hereunder and thereafter until all
duties of the Trustee under this
Indenture shall be finally and fully performed. The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.

     (b) The Issuer hereby indemnifies and saves harmless the Trustee and its directors, officers
and employees from and against any and all loss, damages, charges, expenses, claims, demands,
actions or liability whatsoever which may be brought against the Trustee or which it may suffer or
incur as a result of or arising out of the performance of its duties and obligations hereunder save
only in the event of the grossly negligent failure to act, or the wilful misconduct or bad faith of
the Trustee. This indemnity will survive the termination or discharge of this Indenture and the
resignation or removal of the Trustee.

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The Trustee shall notify the Issuer as soon as reasonably
practicable of any claim for which it may seek indemnity. The Issuer shall defend the claim and
the Trustee shall co-operate in the defence. The Trustee may have separate counsel and the Issuer
shall pay the reasonable fees and expenses of such Counsel. The Issuer need not pay for any
settlement made without its consent, which consent must not be unreasonably withheld. This
indemnity shall survive the resignation or removal of the Trustee or the discharge of this
Indenture.

     (c) The Issuer need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee through gross negligence or bad faith or breach of the Trustee’s duties
hereunder.

     SECTION 7.15 Acceptance of Trust. The Trustee hereby accepts the trusts in this
Indenture declared and provided for and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred hereby and by law in
trust for the various Persons who shall from time to time be Holders, subject to all the terms and
conditions herein set forth.

     SECTION 7.16 Third Party Interests. Each party to this Agreement (in this paragraph
referred to as a “representing party”) hereby represents to the Trustee that any account to be
opened by, or interest to held by, the Trustee in connection with this Agreement, for or to the
credit of such representing party, either (i) is not intended to be used by or on behalf of any
third party; or (ii) is intended to be used by or on behalf of a third party, in which case such
representing party hereby agrees to complete, execute and deliver forthwith to the Trustee a
declaration, in the Trustee’s prescribed form or in such other form as may be satisfactory to it,
as to the particulars of such third party.

     SECTION 7.17 Anti-Money Laundering. The Trustee shall retain the right not to act and
shall not be liable for refusing to act if, due to a lack of information or for any other reason
whatsoever, the Trustee, in its sole judgment, acting reasonably, determines that such act might
cause it to be in noncompliance with any applicable anti-money laundering or anti-terrorist
legislation, regulation or guideline. Further, should the Trustee, in its sole judgment, acting
reasonably, determine at any time that its acting under this Agreement has resulted in its being in
non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation
or guideline, then it shall have the right to resign on 10 days’ prior written notice sent to the
Issuer provided that (i) the Trustee written notice shall describe the circumstances of such
non-compliance; and (ii) that if such circumstances are rectified to the Trustee’s satisfaction
within such 10-day period, then such resignation shall not be effective.

     SECTION 7.18 Privacy Laws. The parties acknowledge that
federal and/or provincial legislation that addresses the
protection of individuals’ personal information (collectively, “Privacy Laws”) applies to certain
obligations and activities under this Indenture. Notwithstanding any other provision of this
Indenture, no party shall take or direct any action that would contravene, or cause the other to
contravene, applicable Privacy Laws. The Issuer shall, prior to transferring or causing to be
transferred personal information to the Trustee, obtain and retain required consents of the
relevant individuals to the collection, use and disclosure of their personal information, or shall
have determined that such consents either have previously been given upon which the parties can
rely or are not required under the Privacy Laws. The Trustee shall use commercially reasonable
efforts to ensure that its services hereunder comply with Privacy Laws. Specifically, the Trustee
agrees: (a) to have a designated chief privacy officer; (b) to maintain policies and procedures to
protect personal information and to receive and respond to any privacy complaint or inquiry; (c) to
use personal information solely for the purposes of providing its services under or ancillary to
this Indenture and to comply with applicable laws and not to use it for any other purpose except
with the consent of or direction from the Issuer or the individual involved or as permitted by
Privacy Laws; (d) not to sell or otherwise improperly disclose personal information to any third
party; and (e) to employ administrative, physical and technological safeguards to reasonably secure
and protect personal information against loss, theft, or unauthorized access, use or modification.

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ARTICLE VIII

DEFEASANCE; DISCHARGE OF THIS INDENTURE

     SECTION 8.1 Option to Effect Defeasance. The Issuer may, at the option of its Board
of Directors and evidenced by a board resolution and an Officers’ Certificate, at any time, elect
to have Section 8.2 applied to all outstanding Notes upon compliance with the conditions set forth
below in this Article VIII.

     SECTION 8.2 Defeasance Upon the Issuer’s exercise under Section 8.1 of the option
applicable to this Section 8.2, the Issuer shall, subject to the satisfaction of the conditions set
forth in Section 8.4, be deemed to have been discharged from its obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied (hereinafter,
“Defeasance”). For this purpose, Defeasance means that the Issuer and the Guarantors shall be
deemed to have paid and discharged the entire Obligations represented by the Notes and the
Guarantees, which shall thereafter be deemed to be outstanding only for the purposes of Section 8.5
and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied
all of its other Obligations under such Notes, Guarantees and this Indenture (and the Trustee, on
written demand of and at the expense of the Issuer, shall execute 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 payments in
respect of the principal of, and interest and premium, if any, on such Notes when such payments
are due from the trust referred to in Section 8.4(1); (b) the Issuer’s obligations with respect to
such Notes under Section 2.2, Section 2.3, Section 2.5, Section 2.6, Section 2.7, Section 2.10 and
Section 4.1; (c) the rights, powers, trusts, benefits, duties and immunities of the Trustee,
including without limitation thereunder, under Section 7.14, Section 8.5 and Section 8.7 and the
obligations of the Issuer and the Guarantors in connection therewith; and (d) the provisions of
this Article VIII. Subject to compliance with this Article VIII, the Issuer may exercise its option
under this Section 8.2.

     Notwithstanding any discharge or release of any obligations pursuant to this Section 8.2, the
Issuer’s and the Guarantors’ obligations, as applicable, in Section 2.5, Section 2.6, Section 2.7,
Section 2.10, Section 4.1, Section 7.14, Section 8.5 and Section 8.7 shall survive until the Notes
are no longer outstanding pursuant to the last paragraph of Section 2.8. After the Notes are no
longer outstanding, the Issuer’s obligations in Section 7.14, Section 8.5 and Section 8.7 shall
survive.

	 	 	SECTION 8.3 [Intentionally Omitted].

     SECTION 8.4 Conditions to Defeasance. The following shall be the conditions to the
application of Section 8.2 to the outstanding Notes:

     (1) the Issuer must irrevocably deposit with the Trustee, as trust funds, in trust
solely for the benefit of the Holders, cash in Canadian dollars, non-callable Canadian
government securities or a combination thereof, in such amounts as will be sufficient
(without consideration of any reinvestment of interest) in the opinion of a nationally
recognized investment bank, appraisal firm or firm of independent public accountants
selected by the Issuer and delivered to the Trustee, to pay the principal of and interest on
the outstanding Notes on the stated date for payment thereof or on the applicable redemption
date, as the case may be;

     (2) the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee and qualified to practice in Canada or a ruling from Canada
Revenue Agency to the effect that Holders who are resident in Canada will not recognize
income, gain or loss for Canadian federal, provincial or territorial income tax purposes as
a result of the Defeasance and will be subject to Canadian federal, provincial or
territorial income tax on the

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same amounts, in the same manner and at the same times as
would have been the case if the Defeasance had not occurred;

     (3) Defeasance shall not result in a breach or violation of, or constitute a default
under any other material agreement or instrument to which the Issuer or any of its
Subsidiaries is a party or by which the Issuer or any of its Subsidiaries is bound;

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

     (5) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel (which may rely on such Officers’ Certificate as to factual matters),
each stating that the conditions precedent provided for in clauses (1) through (4) have been
complied with.

     SECTION 8.5 Deposited Money to Be Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.6, all Canadian dollar and non-callable Canadian government securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 8.5, the “Deposit Trustee”) pursuant to Section 8.4 in
respect of the outstanding Notes shall be held in trust, shall not be invested, and shall be
applied by the Deposit Trustee in accordance with the provisions of such Notes and this Indenture
to the payment to the Holders of such Notes of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated from other funds
except to the extent required by law.

     The Issuer shall pay and indemnify the Deposit Trustee against any tax, fee or other charge
imposed on or assessed against the cash or non-callable Canadian government securities deposited
pursuant to Section 8.4 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 VIII to the contrary notwithstanding, the Deposit Trustee shall
deliver or pay to the Issuer from time to time upon the written request of the Issuer and be
relieved of all liability
with respect to any Canadian dollars or non-callable Canadian government securities held by it
as provided in Section 8.4 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the Deposit Trustee
(which may be the opinion delivered under Section 8.4(1)), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Defeasance.

     If the funds deposited with the Deposit Trustee to effect Defeasance are insufficient to pay
the principal of and interest on the Notes when due, then the Issuer’s obligations and the
obligations of the Guarantors under this Indenture will be revived and no such defeasance will be
deemed to have occurred.

     SECTION 8.6 Repayment to Issuer. Any money deposited with the Trustee or then held by
the Issuer in trust for the payment of the principal of or premium, if any, or interest on any Note
and remaining unclaimed for two years after such principal and premium, if any, or interest has
become due and payable shall be paid to the Issuer upon its request or (if then held by the Issuer)
shall be discharged from such trust; and the Holder of such Note shall thereafter be permitted to,
as an unsecured general creditor, look only to the Issuer for payment thereof; and all liability of
the Trustee with respect to such trust money, and all liability of the Issuer as trustee thereof,
shall thereupon cease; provided, however, that the Trustee, before being required to make any such
repayment, may at the expense of the Issuer

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cause to be published once, in the Globe and Mail
(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 shall be repaid to the Issuer.

     SECTION 8.7 Reinstatement. If the Trustee is unable to apply any Canadian dollars or
non-callable Canadian government securities in accordance with Section 8.2, by reason of any order
or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the obligations of the Issuer and the Guarantors under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.2
until such time as the Trustee is permitted to apply all such money in accordance with Section 8.2;
provided, however, that, if the Issuer makes any payment of principal of, premium, if any, or
interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated
to the rights of the Holder of such Note to receive such payment from the money held by the
Trustee.

     SECTION 8.8 Discharge. This Indenture will be discharged and will cease to be of
further effect (except as to rights of transfer or exchange of Notes which shall survive until all
Notes have been canceled and the rights, protections and immunities of the Trustee) as to all
outstanding Notes when either:

     (a) all the Notes that have been authenticated and delivered (except lost, stolen or destroyed
Notes which have been replaced or paid and Notes for whose payment money has been deposited in
trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from this trust) have been delivered to the Trustee for cancellation; or

     (b)

     (1) all Notes not delivered to the Trustee for cancellation otherwise (i) have become
due and payable, (ii) will become due and payable, or may be called for redemption, within
one year or (iii) have been called for redemption pursuant to Section 3.7 and, in any case,
the Issuer 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 Canadian dollars, non-callable
Canadian government securities or a combination thereof, in such amounts as will be
sufficient (without consideration
of any reinvestment of interest) to pay and discharge the entire Indebtedness
(including all principal and accrued interest) on the Notes not theretofor delivered to the
Trustee for cancellation;

     (2) the Issuer has paid or caused to be paid all other sums payable by it under this
Indenture; and

     (3) the Issuer has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at maturity or on the
date of redemption, as the case may be.

     In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and discharge have been complied
with.

     In the case of clause (b) of this Section 8.8, and subject to the next sentence and
notwithstanding the foregoing paragraph, the Issuer’s and the Guarantors’ obligations, as
applicable, in Section 2.2, Section 2.3, Section 2.5, Section 2.6, Section 2.7, Section 2.10,
Section 2.12, Section 4.1 and Section 4.15 (as to legal existence of the Issuer only), Section
7.14, Section 8.5 and Section 8.7 shall survive until the

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Notes are no longer outstanding pursuant
to the last paragraph of Section 2.8. After the Notes are no longer outstanding, the Issuer’s and
the Guarantors’ obligations in Section 7.14, Section 8.5 and Section 8.7 shall survive any
discharge pursuant to this Section 8.8.

     After such delivery or irrevocable deposit and receipt of the Officers’ Certificate and
Opinion of Counsel, the Trustee, upon written request, shall acknowledge in writing the discharge
of the Issuer’s obligations under the Notes and this Indenture except for those surviving
obligations specified above.

ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

     SECTION 9.1 Without Consent of Holders of the Notes. Notwithstanding Section 9.2,
without the consent of any Holders, the Issuer, the Guarantors and the Trustee, at any time and
from time to time, may amend or supplement this Indenture, the Guarantees or the Notes issued
hereunder for any of the following purposes:

     (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 the Issuer’s or a Guarantor’s obligations to the
Holders in the case of a merger, amalgamation, consolidation or sale of all or substantially
all of the Issuer’s or such Guarantor’s assets, or winding-up or dissolution or sale, lease,
transfer, conveyance or other disposition or assignment in accordance with Section 5.1;

     (4) to add any Guarantee or to effect the release of any Guarantor from any of its
obligations under its Guarantee or the provisions of this Indenture (to the extent in
accordance with this Indenture);

     (5) to make any change that would provide any additional rights or benefits to the
Holders or that does not materially adversely affect the rights of any Holder;

     (6) to secure the Notes or any Guarantees or any other obligation under this Indenture;

     (7) to evidence and provide for the acceptance of appointment by a successor trustee;

     (8) to conform the text of this Indenture or the Notes to any provision of the Details
of the Notes contained in the Offering Memorandum, to the extent that such provision in the
Details of the Notes was intended to be a substantially verbatim recitation of a provision
of this Indenture, the Guarantees or the Notes; or

     (9) to provide for the issuance of Additional Notes in accordance with this Indenture.

     After an amendment under this Indenture becomes effective, the Issuer shall deliver to Holders
of the Notes a notice briefly describing such amendment. However, the failure to give such notice
to all Holders of the Notes, or any defect therein, will not impair or affect the validity of the
amendment.

     SECTION 9.2 With Consent of Holders of Notes. With the consent of the Holders of not
less than a majority in aggregate principal amount of the outstanding Notes (including, without
limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes), the

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Issuer, the Guarantors and the Trustee may amend or supplement this Indenture,
the Notes or any Guarantees or, subject to Section 6.4 and Section 6.7, waive any existing Default
or Event of Default or compliance with any provision of this Indenture or the Notes; provided,
however, that no such amendment, supplement or waiver shall, without the consent of the Holder of
each outstanding Note affected thereby:

     (1) reduce, or change the maturity of, the principal of any Note;

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

     (3) reduce any premium payable upon redemption of the Notes or change the date on which
any Notes are subject to redemption (other than the notice provisions) or waive any payment
with respect to the redemption of the Notes; provided, however, that solely for the
avoidance of doubt, and without any other implication, any purchase or repurchase of Notes
(including pursuant to Section 4.10 and Section 4.14) shall not be deemed a redemption of
the Notes;

     (4) make any Note payable in money or currency other than that stated in the Notes;

     (5) modify or change any provision of this Indenture or the related definitions to
affect the ranking of the Notes or any Guarantee in a manner that adversely affects the
Holders;

     (6) reduce the percentage of Holders necessary to consent to an amendment or waiver to
this Indenture or the Notes;

     (7) waive a default in the payment of principal of or premium or interest on any Notes
(except a rescission of acceleration of the Notes by the Holders thereof as provided in this
Indenture and a waiver of the payment default that resulted from such acceleration);

     (8) impair the rights of Holders to receive payments of principal of or interest on the
Notes on or after the due date therefor or to institute suit for the enforcement of any
payment on the Notes;

     (9) release any Guarantor from any of its obligations under its Guarantee or this
Indenture, except as permitted by this Indenture; or

     (10) make any change in these amendment and waiver provisions.

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

	 	 	SECTION 9.3 [Intentionally Omitted].

     SECTION 9.4 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 and every subsequent Holder of that Note or portion of the Note that evidences the same debt
as the consenting Holder’s Note, even if notation of the consent is not made on the Note. However,
any such Holder or subsequent Holder 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.
When an

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amendment, supplement or waiver becomes effective in accordance with its terms, it
thereafter binds every Holder.

     The Issuer may, but shall not be obligated to, fix a record date for determining which Holders
consent to such amendment, supplement or waiver. If the Issuer fixes a record date, the record
date shall be fixed at (i) the later of 30 days prior to the first solicitation of such consent or
the date of the most recent list of Holders prior to such solicitation referred to in Section 2.5
or (ii) such other date as the Issuer shall designate.

     SECTION 9.5 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 Issuer
in exchange for all Notes may issue and the Trustee shall authenticate new Notes that reflect the
amendment, supplement or waiver.

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

     SECTION 9.6 Trustee to Sign Amendments, Etc The Trustee shall sign any amended or
supplemental indenture authorized pursuant to this Article IX if the amendment or supplement does
not adversely affect the rights, duties, liabilities or immunities of the Trustee. In signing or
refusing to sign any amendment or supplemental indenture, the Trustee shall be provided with and
(subject to Section 7.3) shall be fully protected in relying upon an Officers’ Certificate and an
Opinion of Counsel stating that the execution of such amendment or supplemental indenture is
authorized or permitted by this Indenture, that all conditions precedent thereto have been met or
waived, that such amendment or supplemental indenture is not inconsistent herewith and that it will
be valid and binding upon the Issuer and the Guarantor in accordance with its terms.

ARTICLE X

GUARANTEES

     SECTION 10.1 Guarantees.

     (a) Each Guarantor hereby jointly and severally, fully, unconditionally and irrevocably
guarantees the Notes and obligations of the Issuer hereunder and thereunder, and guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee, that: (i) the
principal of and premium, if any, and interest on the Notes shall be paid in full when due, whether
at Stated Maturity, by acceleration, call for redemption or otherwise (including, without
limitation, the amount that would become due but for the operation of the automatic stay under
Section 362(a) of Title 11 of the United States Code), together with interest on the overdue
principal, if any, and interest on any overdue interest to the extent lawful, and all other
Obligations of the Issuer to the Holders or the Trustee under this Indenture or the Notes shall be
paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of
any extension of time of payment or renewal of any Notes or of any such other obligations, the same
shall be paid in full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise. Each of the Guarantees shall be
a guarantee of payment and not of collection.

     (b) Each Guarantor hereby agrees that its 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 the Issuer, any action to
enforce the same or any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor.

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     (c) Each Guarantor hereby waives the benefits of diligence, presentment, demand for payment,
filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to
require a proceeding first against the Issuer or any other Person, protest, notice and all demands
whatsoever and covenants that the Guarantee of such Guarantor shall not be discharged as to any
Note or this Indenture except by complete performance of the obligations contained in such Note,
and this Indenture and such Guarantee. Each of the Guarantors hereby agrees that, in the event of a
Default in payment of principal or premium, if any, or interest on any Note, whether at its Stated
Maturity, by acceleration, call for redemption, purchase or otherwise, legal proceedings may be
instituted by the Trustee on behalf of, or by, the Holder of such Note, subject to the terms and
conditions set forth in this Indenture, directly against each of the Guarantors to enforce each
such Guarantor’s Guarantee without first proceeding against the Issuer or any other Guarantor. Each
Guarantor agrees that if, after the occurrence and during the continuance of an Event of Default,
the Trustee or any of the Holders are prevented by applicable law from exercising their respective
rights to accelerate the maturity of the Notes, to collect interest on the Notes, or to enforce or
exercise any other right or remedy with respect to the Notes, such Guarantor shall pay to the
Trustee for the account of the Holders, upon demand therefor, the amount that would otherwise have
been due and payable had such rights and remedies been permitted to be exercised by the Trustee or
any of the Holders and any other amounts due and owing to the Trustee under this Indenture.

     (d) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer
or any Guarantor, or any custodian, trustee, liquidator or other similar official acting in
relation to the Issuer or any Guarantor, any amount paid by any of them to the Trustee or such
Holder, the Guarantee of each of the Guarantors, to the extent theretofore discharged, shall be
reinstated in full force and effect. This paragraph (d) shall remain effective notwithstanding any
contrary action which may be taken by the Trustee or any Holder in reliance upon such amount
required to be returned. This paragraph (d) shall survive the termination of this Indenture.

     (e) Each Guarantor further agrees that, as between each Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article VI for the purposes of the Guarantee of such Guarantor,
notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in
Article VI, such obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of the Guarantee of such Guarantor.

     (f) Each Guarantor acknowledges that each Guarantee will be a general unsecured obligation of
such Guarantor and will rank senior in right of payment to all future Obligations of such Guarantor
that are, by their terms, expressly subordinated in right of payment to such Guarantee and equal in
right of payment with all existing and future obligations of such Guarantor (including such
Guarantor’s guarantee of the Unsecured Notes) that are not so subordinated.

     (g) Each Guarantor that makes a payment for distribution under its Guarantee is entitled upon
payment in full of all guaranteed obligations under this Indenture to a contribution from each
other Guarantor in a pro rata amount of such payment based on the respective net assets of all the
Guarantors at the time of such payment, with net assets determined in accordance with GAAP.

     SECTION 10.2 Execution and Delivery of Guarantee. To evidence its Guarantee set forth
in Section 10.1, each Guarantor agrees that this Indenture or a supplemental indenture in
substantially the form attached hereto as Exhibit B shall be executed on behalf of such
Guarantor by an Officer of such Guarantor (or, if an officer is not available, by a board member or
director) on behalf of such Guarantor by manual or facsimile signature. Each Guarantor hereby
agrees that its Guarantee set forth in Section

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10.1 shall remain in full force and effect
notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes. In
case the Officer, board member or director of such Guarantor whose signature is on this Indenture
or supplemental indenture, as applicable, no longer holds office at the time the Trustee
authenticates any Note, the Guarantee shall be valid nevertheless.

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

     If required by Section 4.17, the Issuer shall cause each Restricted Subsidiary described in
Section 4.17 to comply with the provisions of Section 4.17 and this Article X, to the extent
applicable.

     SECTION 10.3 Severability. In case any provision of any Guarantee 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 10.4 Limitation of Guarantors’ Liability. Each Guarantor and by its
acceptance hereof each Holder confirms that it is the intention of all such parties that the
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, any federal, provincial or state law (including the Uniform Fraudulent Conveyance
Act and the Uniform Fraudulent Transfer Act) or the provisions of its local law relating to
fraudulent transfer or conveyance. To effectuate the foregoing intention, the Trustee, the Holders
and Guarantors hereby irrevocably agree that the obligations of such Guarantor under its Guarantee
(other than a company that is a direct or indirect parent of the Issuer) shall be limited to the
maximum amount that will not, after giving effect to all other contingent and fixed liabilities of
such Guarantor (including, without limitation, any guarantees under the Credit Agreement and the
Unsecured Notes) and after giving effect to any collections from, rights to receive contribution
from or payments made by or on behalf of any other Guarantor in respect of the obligations of such
other Guarantor under its Guarantee, result in the obligations of such Guarantor under its
Guarantee constituting a fraudulent transfer or conveyance, fraudulent preference, a transfer at
under value, or an otherwise reviewable transaction under applicable law.

     SECTION 10.5 Releases. A Guarantor shall be released and relieved of any Obligations
under this Guarantee and this Indenture upon:

     (a) designation by the Board of Directors of the Issuer that such Guarantor is an
Unrestricted Subsidiary in accordance with the terms of this Indenture;

     (b) any sale, exchange or transfer (by merger, amalgamation, consolidation or
otherwise) of the Equity Interests of such Guarantor after which the applicable Guarantor is
no longer a Restricted Subsidiary, which sale, exchange or transfer is made in compliance
with this Indenture;

     (c) the release or discharge of a Guarantor’s guarantee of Indebtedness outstanding
under the Credit Agreement, the Unsecured Note Indenture and any other agreements relating
to Indebtedness of the Issuer and its Restricted Subsidiaries; provided that such Guarantor
has not incurred any Indebtedness in reliance on its status as a Guarantor under Section
4.9(a) or such Guarantor’s obligations under such Indebtedness are satisfied in full and
discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than
a Guarantor) under Section 4.9(b); or

     (d) if the Issuer exercises its Defeasance option pursuant to Section 8.2 or if its
Obligations under this Indenture are discharged in accordance with Section 8.8.

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     Upon delivery to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the
effect that all conditions precedent to the release of a Guarantor’s Guarantee set forth in this
Indenture have been satisfied, the Trustee shall execute any documents reasonably requested by the
Issuer in writing in order to evidence the release of any Guarantor from its obligations under its
Guarantee.

     Any Guarantor not released from its obligations under its Guarantee shall remain liable for
the full amount of principal of and interest on the Notes and for the other obligations of any
Guarantor under this Indenture as provided in this Article X.

     SECTION 10.6 Benefits Acknowledged. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by this Indenture and
that its guarantee and waivers pursuant to its Guarantee are knowingly made in contemplation of
such benefits.

     SECTION 10.7 Expenses. Each Guarantor agrees to pay any and all costs and expenses
(including reasonable counsel fees and expenses on a solicitor-client full indemnity basis)
incurred by the Trustee or the Holders in enforcing any rights under the Guarantees.

ARTICLE XI

MISCELLANEOUS

     SECTION 11.1 Trust Indenture Legislation. In this Indenture, the term “Trust
Indenture Legislation” means the provisions, if any, of any statute of Canada or a province
thereof, and of regulations under any such statute, relating to trust indentures and to the rights,
duties, and obligations of trustees under trust indentures and of Persons issuing debt obligations
under trust indentures, to the extent that such provisions are at the time in force and applicable
to this Indenture.

     If and to the extent that any provision of this Indenture limits, qualifies, or conflicts with
a mandatory requirement of Trust Indenture Legislation, such mandatory requirement shall prevail.
The Issuer, the Trustee, and each Holder shall at all times, in relation to this Indenture and any
action to be taken hereunder, observe and comply with and be entitled to the benefits of Trust
Indenture Legislation, as applicable.

     SECTION 11.2 Notices. Any notice, request, direction, instruction or communication by
the Issuer, any Guarantor or the Trustee to the others is duly given if in writing 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 addresses set forth
below:

     If to the Issuer or any Guarantor:

Precision Drilling Corporation

4200-150-6th Avenue, S.W.

Calgary, Alberta

T2P 3Y7

Facsimile: (403) 264-0251

Attention: General Counsel

     With a copy to:

     Precision Drilling Corporation

4200-150-6th Avenue, S.W.

Calgary, Alberta

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T2P 3Y7

Facsimile: (403) 264-0251

Attention: Vice President, Finance

	 	 	With a copy to:

Blake, Cassels & Graydon LLP

855 2nd Street SW

Suite 3500, Bankers Hall

East Tower

Calgary, AB T2P 4J0

Facsimile: (403) 260-9200

Attention: Ross Bentley

     and

Bennett Jones LLP

4500 Bankers Hall East

855-2nd Street, S.W.

Calgary, Alberta

T2P 4K7

Facsimile: (403) 265-7219

Attention: John H. Kousinioris

     and

     If to the Trustee

Valiant Trust Company

310, 606-4th Street SW

Calgary, AB T2P 1T1

Facsimile: (403) 233-2857

Attention: Senior Manager, Corporate Trust

     The parties hereto, by written 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 and the Trustee) 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
acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier promising next Business Day delivery.

     Any notice or communication to a Holder and the Trustee shall be mailed by first class mail or
by overnight air courier promising next Business Day delivery to its address shown on the register
kept by the Registrar. As long as the Notes are Global Notes, notices to be given to the Holders
shall be given to the Depository, in accordance with its applicable policies as in effect from time
to time. 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.

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     In respect of this Indenture, no Trustee shall have any duty or obligation to verify or
confirm that the Person sending instructions, directors, reports, notices or other communications
or information by electronic transmission is, in fact, a Person authorized to give such
instructions, directors, reports notices or other communications or information on behalf of the
party purporting to send such electronic transmission; and no Trustee shall have any liability for
any losses, liability, costs or expenses incurred or sustained by any party as a result of such
reliance upon or compliance with such instructions directors, reports, notices or other
communications or information. Each other party, agrees to assume all risks arising out of the use
of electronic methods to submit instructions, directions, reports, notices or other communications
or indemnifications to the Trustee, including without limitation the risk of the Trustee
acting on unauthorized instructions, notices, reports or other communications or information,
and the risks of interception and misuse by third parties.

     If a notice or communication is delivered in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it, except in the case of
notices or communications given to the Trustee, which shall be effective only upon actual receipt.

     If the Issuer delivers a notice or communication to Holders, it shall mail a copy to the
Trustee and each Agent at the same time.

     SECTION 11.3 [Intentionally Omitted].

     SECTION 11.4 [Intentionally Omitted].

     SECTION 11.5 [Intentionally Omitted].

     SECTION 11.6 Rules by Trustee and Agents. The Trustee may make reasonable rules for
action by or at a meeting of Holders. Each of the Agents may make reasonable rules and set
reasonable requirements for its functions.

     SECTION 11.7 No Personal Liability of Directors, Officers, Employees and Shareholders.
No director, officer, employee or natural person incorporator of the Issuer or any Guarantor, any
shareholder of the Issuer or an annuitant under a plan of which a shareholder of the Issuer is a
trustee or carrier will have any liability for any indebtedness, obligations or liabilities of the
Issuer under the Notes or this Indenture or of any Guarantor under its Guarantee 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 and the Guarantees.

     SECTION 11.8 Applicable Law and Attornment. This Indenture, any supplemental
indenture and the Notes shall be governed by and interpreted in accordance with the laws of the
Province of Alberta and the federal laws of Canada applicable therein and shall be treated in all
respects as Alberta contracts. With respect to any suit, action or proceedings relating to this
Indenture, any supplemental indenture or any Note, the Issuer, the Guarantors, the Trustee and each
Holder irrevocably submit and attorn to the non-exclusive jurisdiction of the courts of the
Province of Alberta.

	 	 	SECTION 11.9 [Intentionally Omitted].

     SECTION 11.10 Successors. All agreements of the Issuer and the Guarantors in this
Indenture and the Notes and the Guarantees, as applicable, shall bind their respective successors
and assigns. All agreements of the Trustee in this Indenture shall bind its respective successors
and assigns.

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     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 Counterpart Originals. The parties may sign any number of copies of
this Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.

     SECTION 11.13 Table of Contents, Headings, Etc. The Table of Contents and Headings of
the Articles and Sections of this Indenture have been inserted for convenience of reference only,
are not to be
considered a part of this Indenture and shall in no way modify or restrict any of the terms or
provisions hereof.

     SECTION 11.14 Acts of Holders.

     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “Act” of Holders signing
such instrument or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this Section 11.14.

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

     (c) The ownership of Notes shall be proved by the register maintained by the Registrar
hereunder.

     (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note
issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance
thereon, whether or not notation of such action is made upon such Note.

     (e) If the Issuer shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Issuer may, at its option, by or pursuant to a
board resolution of the Issuer’s Board of Directors, fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Issuer shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of outstanding Notes have authorized

78

 

or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that
purpose the outstanding Notes shall be computed as of such record date; provided that no such
authorization, agreement or consent by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

     SECTION 11.15 [Intentionally Omitted].

     SECTION 11.16 [Intentionally Omitted].

     SECTION 11.17 Documents in English. The parties to this Indenture have expressly
requested that this Indenture and all related notices, amendments and other documents be drafted in
the English language. Les parties à la présente convention ont expressément exigé que cette
convention et tous les avis, modifications et autres documents y afférents soient rédigés en langue
anglaise seulement.

     SECTION 11.18 Conversion of Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due under this Indenture to the Holder from Canadian
dollars to another currency, the Issuer and each Guarantor has agreed, and each Holder by holding
such Note will be deemed to have agreed, to the fullest extent that the Issuer, each Guarantor and
they may effectively do so, that the rate of exchange used shall be that at which in accordance
with normal banking procedures such Holder could purchase Canadian dollars with such other currency
at the Bank of Canada noon rate of exchange on the Business Day preceding the day on which final
judgment is given.

     The Issuer’s and Guarantors’ obligations to any Holder will, notwithstanding any judgment in a
currency (the “Judgment Currency”) other than Canadian dollars, be discharged only to the extent
that on the Business Day following receipt by such Holder or the Trustee, as the case may be, of
any amount in such Judgment Currency, such Holder may in accordance with normal banking procedures
purchase Canadian dollars with the judgment currency. If the amount of the Canadian dollars so
purchased is less than the amount originally to be paid to such Holder or the Trustee in the
Judgment Currency (as determined in the manner set forth in the preceding paragraph), as the case
may be, each of the Issuer and the Guarantors, jointly and severally, agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the Holder and the Trustee, as the
case may be, against any such loss. If the amount of the Canadian dollars so purchased is more
than the amount originally to be paid to such Holder or the Trustee, as the case may be, such
Holder or the Trustee, as the case may be, will pay the Issuer and the Guarantors, such excess;
provided that such Holder or the Trustee, as the case may be, shall not have any obligation to pay
any such excess as long as a Default under the Notes or this Indenture has occurred and is
continuing or if the Issuer or the Guarantors shall have failed to pay any Holder or the Trustee
any amounts then due and payable under such Note or this Indenture, in which case such excess may
be applied by such Holder or the Trustee to such Obligations.

     SECTION 11.19 Service of Process. Each Guarantor that is organized in the United
States of America hereby appoints the Issuer as its agent for service of process in any suit,
action or proceeding with respect to this Indenture, the Notes or the Guarantees.

     SECTION 11.20 Legal Holidays. If any payment date falls on a day that is not a
Business Day, the payment to be made on such payment date will be made on the next succeeding
Business Day with the same force and effect as if made on such payment date, and no additional
interest will accrue solely as a result of such delayed payment.

79

 

     SECTION 11.21 Time of Essence. Time shall be of the essence of this Indenture.

[Signatures on following pages]

80

 

	 	 	 	 	 
	 	
PRECISION DRILLING CORPORATION

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	GUARANTORS:

PRECISION COMPLETION & PRODUCTION SERVICES LTD.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	PRECISION DIVERSIFIED OILFIELD SERVICES CORP.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	PRECISION LIMITED PARTNERSHIP

BY: ITS GENERAL PARTNER, PRECISION DIVERSIFIED OILFIELD SERVICES CORP.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	PRECISION DRILLING CANADA LIMITED PARTNERSHIP

BY: ITS GENERAL PARTNER, PRECISION DIVERSIFIED OILFIELD SERVICES CORP.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 

Signature Page to Precision Drilling Corporation Indenture

 

 

	 	 	 	 	 
	 	GREY WOLF INTERNATIONAL DRILLING CORPORATION

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	PRECISION OILFIELD PERSONNEL SERVICES LTD.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	PRECISION DRILLING, INC.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	DI ENERGY, INC.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	GREY WOLF INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	PRECISION DRILLING HOLDINGS COMPANY

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 

Signature Page to Precision Drilling Corporation Indenture

 

 

	 	 	 	 	 
	 	PRECISION DRILLING LLC

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	PRECISION DRILLING COMPANY, LP

BY: ITS GENERAL PARTNER, PRECISION DRILLING HOLDINGS COMPANY

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	MURCO DRILLING CORPORATION

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	DI/PERFENSA INC.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 
	 	GREY WOLF SUPPLY INC.

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name:	  	Robert J. McNally 	 
	 	Title:	  	Executive Vice President and Chief Financial Officer 	 
	 

Signature Page to Precision Drilling Corporation Indenture

 

 

	 	 	 	 	 
	 	PRECISION DRILLING OILFIELD SERVICES CORPORATION

 	 
	 	By:  	/s/ Robert J. McNally
 	 
	 	Name: 	Robert J. McNally 	 
	 	Title: 	Executive Vice President and Chief Financial Officer 	 
	 
	 	VALIANT TRUST COMPANY

as Trustee

 	 
	 	By:  	 	 
	 	  	Name:	 	 
	 	  	Title:	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	  	Name:	 	 
	 	  	Title:	 	 
	 

Signature Page to Precision Drilling Corporation Indenture

 

 

EXHIBIT A

FORM OF NOTE

(Face of 6.5% Senior Note)

6.50% Senior Notes due 2019

[Global Note Legend]

     UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE
SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY
SERVICES INC. (“CDS”) TO PRECISION DRILLING CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO.,
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS
MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES
REPRESENTED BY THIS NOTE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD,
TRANSFER OR DEAL WITH THIS NOTE.

A-1

 

			
	No.
	 	CUSIP NO.     

     Precision Drilling Corporation (including any successor thereto) promises to pay to CDS & Co.
or registered assigns, the principal sum of ________ (as may be increased or decreased as set forth
on the Schedule of Increases and Decreases attached hereto) on March 15, 2019.

     Interest Payment Dates: March 15 and September 15, beginning September 15, 2011

     Record Dates: March 1 and September 1 (whether or not a Business Day)

     Reference is made to further provisions of this Note set forth herein, which further
provisions shall for all purposes have the same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
herein by manual signature, this Note shall not be entitled to any benefits under the Indenture
referred to herein or be valid or obligatory for any purpose.

A-2

 

	 	 	 	 	 
	 	PRECISION DRILLING CORPORATION

 	 
	 	By  	 	 
	 	Name:	  	 	 
	 	Title:	  	 	 
	 

This is one of the Notes referred to in the

within-mentioned Indenture:

Dated:

VALIANT TRUST COMPANY, as Trustee

	 	 	 	 	 
	 	 	 
	 	By  	 	 
	 	Name:	  	 	 
	 	Title:	  	 	 
	 
	 	 	 
	 	By  	 	 
	 	Name:	  	 	 
	 	Title:	  	 	 
	 

A-3

 

(Back of 6.50% Senior Note)

6.50% Senior Notes due 2019

     Capitalized terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.

     (1) Interest. Precision Drilling Corporation, a corporation amalgamated under the
laws of the Province of Alberta and any successor thereto (“Precision” or the “Issuer”) promises to
pay interest on the principal amount of this 6.50% Senior Note due 2019 (a “Note”) at a fixed rate
of 6.50% per annum. The Issuer will pay interest in Canadian dollars (except as otherwise provided
herein) semiannually in arrears on March 15 and September 15, commencing on September 15, 2011
(each an “Interest Payment Date”) or if any such day is not a Business Day, on the next succeeding
Business Day with the same force and effect as if made on such Interest Payment Date, and no
additional interest shall accrue solely as a result of such delayed payment. Interest on the Notes
shall accrue from the most recent date to which interest has been paid, or, if no interest has been
paid, from and including the date of issuance. The Issuer shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to the then applicable interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period), at the same rate to the
extent lawful. Interest shall be computed on the basis of a 360-day year comprised of twelve
30-day months.

     (2) Method of Payment. The Issuer will pay interest on the Notes (except defaulted
interest) on the applicable Interest Payment Date to the Persons who are registered Holders of
Notes at the close of business on the March 1 and September 1 preceding the Interest Payment Date
(whether or not a Business Day), even if such Notes are cancelled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest.

     Any payments of principal of this Note prior to Stated Maturity shall be binding upon all
future Holders of this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. The final principal amount due and
payable at the maturity of this Note shall be payable only upon presentation and surrender of this
Note at an office of the Trustee or the Trustee’s agent appointed for such purposes. Payments in
respect of Global Notes will be made by wire transfer of immediately available funds to the
Depository.

     (3) Transfer Agent and Registrar. Initially, Valiant Trust Company shall act as
transfer agent and Registrar. The Issuer may change any transfer agent or Registrar without notice
to any Holder, and the Issuer and/or any Restricted Subsidiaries may act as transfer agent or
Registrar.

     (4) Indenture. The Issuer issued the Notes under an Indenture, dated as of March 15,
2011 (the “Indenture”), among the Issuer, the Guarantors thereto and the Trustee. To the extent
the provisions of this Note are inconsistent with the provisions of the Indenture, the Indenture
shall govern. The Notes are subject to all such terms, and Holders are referred to the Indenture
for a statement of such terms. The Initial Notes issued on the Issue Date are senior obligations
of the Issuer limited to $200,000,000 in aggregate principal amount, plus amounts, if any,
sufficient to pay premium, and interest on outstanding Notes as set forth in Paragraph (1) hereof.
The Indenture permits the issuance of Additional Notes subject to compliance with certain
conditions.

     The payment of principal and interest on the Notes and all other amounts under the Indenture
is unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the
Guarantors.

A-4

 

     (5) Optional Redemption

     (a) The Notes may be redeemed, in whole or in part, at any time prior to March 15, 2015 at the
option of the Issuer upon not less than 30 nor more than 60 days’ prior notice to each Holder, at a
redemption price equal to 100.0% of the aggregate principal amount of the Notes redeemed plus the
Applicable Premium (calculated by the Issuer) as of, and accrued and unpaid interest to, the
applicable redemption date (subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant Interest Payment Date).

     (b) The Notes are subject to redemption, at the option of the Issuer, in whole or in part, at
any time or from time to time on or after March 15, 2015, at the following redemption prices
(expressed as percentages of the principal amount to be redeemed) set forth below, plus accrued and
unpaid interest, if any, on the Notes to be redeemed to the applicable redemption date (subject to
the right of Holders on the relevant record date to receive interest due on the relevant Interest
Payment Date), if redeemed during the 12-month period beginning March 15 of the years indicated
below:

	 	 	 	 	 
	Year	 	Redemption Price
	2015
	 	 	103.250	%
	2016
	 	 	101.625	%
	2017 and thereafter
	 	 	100.000	%

     (c) At any time or from time to time prior to March 15, 2014, the Issuer, at its option, may
on any one or more occasions redeem up to 35.0% of the principal amount of the outstanding Notes
issued under the Indenture (calculated after giving effect to any issuance of Additional Notes)
with the net cash proceeds of one or more Qualified Equity Offerings at a redemption price equal to
106.5% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest
thereon to the date of redemption (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant Interest Payment Date); provided that:

     (1) at least 65.0% of the aggregate principal amount of Notes issued under the
Indenture (calculated after giving effect to any issuance of Additional Notes) remains
outstanding immediately after giving effect to any such redemption; and

     (2) the redemption occurs not more than 90 days after the date of the closing of any
such Qualified Equity Offering.

     (6) Mandatory Redemption. Except as provided in the Indenture, the Issuer shall not
be required to make mandatory redemption or sinking fund payments with respect to Notes.

     (7) Repurchase at Option of Holder.

     (a) If a Change of Control occurs, unless the Issuer at such time has given notice of
redemption pursuant to Paragraph (5) hereof with respect to all outstanding Notes, each Holder will
have the right to require the Issuer to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess thereof) of that Holder’s Notes pursuant to a Change of Control Offer
at a price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus
accrued and unpaid interest to the date of purchase; provided that no partial redemption shall
result in a Note having a principal amount of less than $2,000. Within 30 days following any Change
of Control unless the Issuer at such time has given notice of redemption pursuant to Paragraph (5)
hereof with respect to all outstanding Notes, the Issuer will deliver a notice to each Holder (with
a copy to the Trustee) describing the transaction or

A-5

 

transactions that constitute the Change of Control and setting forth the procedures governing
the Change of Control Offer required by the Indenture.

     (b) Upon the occurrence of certain Asset Sales, the Issuer may be required to offer to
purchase Notes.

     (c) Holders of the Notes that are the subject of an offer to purchase will receive notice of a
Net Proceeds Offer or the Change of Control Offer, as applicable, pursuant to an Asset Sale or a
Change of Control from the Issuer prior to any related purchase date and may elect to have such
Notes purchased by completing the form titled “Option of Holder to Elect Purchase” attached hereto.

     (8) Notice of Redemption. Notice of redemption shall be delivered at least thirty
(30) days but not more than sixty (60) days before the redemption date to each Holder whose Notes
are to be redeemed in accordance with Section 11.2 of the Indenture. Notes in denominations larger
than $2,000 may be redeemed in part but only in minimum denominations of $2,000 and integral
multiples of $1,000 thereof, unless all of the Notes held by a Holder are to be redeemed so long as
no partial redemption results in a Note having a principal amount of less than $2,000.

     (9) [Reserved.]

     (10) Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in initial denominations of $2,000 and integral multiples of $1,000 in excess thereof. The
transfer of the Notes may be registered and the Notes may be exchanged as provided in the
Indenture. The Registrar, the Trustee and the Issuer may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents, and the Issuer may require a Holder to pay
any stamp or transfer tax or similar government charge required by law or permitted by the
Indenture in accordance with Section 2.6(j)(2) of the Indenture. The Registrar is not required (A)
to issue, to register the transfer of or to exchange Notes during a period beginning at the opening
of business fifteen (15) days before the day of any selection of Notes for redemption and ending at
the close of business on the day of such selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part, or (C) to register the transfer of or to exchange a Note between a record
date and the next succeeding Interest Payment Date.

     (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 the following paragraphs, the
Indenture, the Notes and the Guarantees may be amended or supplemented with the consent of the
Holders of not less than a majority in aggregate principal amount of the outstanding Notes,
including, without limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes, and, except as set forth in the Indenture, any existing Default or
Event of Default or compliance with any provision of the Indenture, the Notes or the Guarantees may
be waived with the consent of the Holders of a majority in principal amount of the then outstanding
Notes, including consents obtained in connection with a tender offer or exchange offer for Notes.

     Notwithstanding Section 9.2 of the Indenture, without the consent of any Holders, the Issuer,
the Guarantors and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental to the Indenture for any of the following purposes:

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

A-6

 

     (2) to provide for uncertificated Notes;

     (3) to provide for the assumption of the Issuer’s or a Guarantor’s obligations to the
Holders in the case of a merger, amalgamation, consolidation or sale of all or substantially
all of the Issuer’s or such Guarantor’s assets, or winding-up or dissolution or sale, lease,
transfer, conveyance or other disposition or assignment in accordance with the Indenture;

     (4) to add any Guarantee or to effect the release of any Guarantor from any of its
obligations under its Guarantee or the provisions of the Indenture (to the extent in
accordance with the Indenture);

     (5) to make any change that would provide any additional rights or benefits to the
Holders of Notes or that does not adversely affect the legal rights of any Holder;

     (6) to secure the Notes or any Guarantees or other obligation under the Indenture;

     (7) to evidence and provide for the acceptance of appointment by a successor trustee;

     (8) to conform the text of the Indenture or the Notes to any provision of the Details
of the Notes contained in the Offering Memorandum; or

     (9) to provide for the issuance of Additional Notes in accordance with the Indenture.

     With the consent of the Holders of not less than a majority in aggregate principal amount of
the outstanding Notes (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, the Notes), the Issuer, the Guarantors, if any,
and the Trustee may amend or supplement the Indenture, the Notes or any Guarantees or, subject to
Section 6.4 and Section 6.7 of the Indenture, waive any existing Default or Event of Default or
compliance with any provision of the Indenture or the Notes; provided, however, that no such
amendment, supplement or waiver shall, without the consent of the Holder of each outstanding Note
affected thereby:

     (1) reduce, or change the maturity of, the principal of any Note;

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

     (3) reduce any premium payable upon redemption of the Notes or change the date on which
any Notes are subject to redemption (other than the notice provisions) or waive any payment
with respect to the redemption of the Notes;

     (4) make any Note payable in money or currency other than that stated in the Notes;

     (5) modify or change any provision of the Indenture or the related definitions to
affect the ranking of the Notes or any Guarantee in a manner that adversely affects the
Holders;

     (6) reduce the percentage of Holders necessary to consent to an amendment or waiver to
the Indenture or the Notes;

     (7) waive a default in the payment of principal of or premium or interest on any Notes
(except a rescission of acceleration of the Notes by the Holders thereof as provided in the
Indenture and a waiver of the payment default that resulted from such acceleration);

A-7

 

     (8) impair the rights of Holders to receive payments of principal of or interest on the
Notes on or after the due date therefor or to institute suit for the enforcement of any
payment on the Notes;

     (9) release any Guarantor from any of its obligations under its Guarantee or the
Indenture, except as permitted thereunder; or

     (10) make any change in these amendment and waiver provisions.

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

     (13) Defaults and Remedies. Each of the following constitutes an Event of Default:

     (1) failure to pay interest on any of the Notes when the same becomes due and payable
and the continuance of any such failure for 30 days;

     (2) failure to pay principal of or premium, if any, on any of the Notes when it becomes
due and payable, whether at Stated Maturity, upon redemption, upon purchase, upon
acceleration or otherwise;

     (3) failure by the Issuer or any of its Restricted Subsidiaries to comply with any of
their respective agreements or covenants described in Section 5.1 of the Indenture, or
failure by the Issuer to comply in respect of its obligations to make a Change of Control
Offer pursuant to Section 4.14 of the Indenture;

     (4) (a) except with respect to Section 4.3, failure by the Issuer or any Restricted
Subsidiary to comply with any other agreement or covenant in the Indenture and continuance
of this failure for 60 days after notice of the failure has been given to the Issuer by the
Trustee or to the Issuer and the Trustee by the Holders of at least 25.0% of the aggregate
principal amount of the Notes then outstanding, or (b) failure by the Issuer for 120 days
after notice of the failure has been given to the Issuer by the Trustee or to the Issuer and
the Trustee by the Holders of at least 25.0% of the aggregate principal amount of the Notes
then outstanding to comply with Section 4.3 of the Indenture;

     (5) default by the Issuer or any Significant Subsidiary of the Issuer under any
mortgage, indenture or other instrument or agreement under which there may be issued or by
which there may be secured or evidenced Indebtedness for borrowed money by the Issuer or any
Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the Issue
Date, which default:

     (a) is caused by a failure to pay at its Stated Maturity principal on such
Indebtedness within the applicable express grace period and any extensions thereof,
or

     (b) results in the acceleration of such Indebtedness prior to its Stated
Maturity (which acceleration is not rescinded, annulled or otherwise cured within 30
days of receipt by the Issuer or such Restricted Subsidiary of notice of any such
acceleration),

A-8

 

and, in each case, the principal amount of such Indebtedness, together with the principal
amount of any other Indebtedness with respect to which an event described in clause (a) or
(b) has occurred and is continuing, aggregates U.S.$50.0 million or more;

     (6) one or more judgments (to the extent not covered by insurance) for the payment of
money in an aggregate amount in excess of U.S.$50.0 million shall be rendered against the
Issuer, any of its Significant Subsidiaries or any combination thereof and the same shall
remain undischarged for a period of 60 consecutive days during which execution shall not be
effectively stayed;

     (7)

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

     (i) commences a voluntary case,

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

     (iii) consents 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) generally is not paying its debts as they become due; or

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

     (i) is for relief against the Issuer or any Significant Subsidiary of the
Issuer or group of Restricted Subsidiaries of the Issuer that, taken together (as of
the latest audited consolidated financial statements for the Issuer and its
Restricted Subsidiaries), would constitute a Significant Subsidiary, in an
involuntary case;

     (ii) appoints a custodian of the Issuer or any Significant Subsidiary of the
Issuer or group of Restricted Subsidiaries of the Issuer that, taken together (as of
the latest audited consolidated financial statements for the Issuer and its
Restricted Subsidiaries), would constitute a Significant Subsidiary or for all or
substantially all of the property of the Issuer or any of its Restricted
Subsidiaries; or

     (iii) orders the liquidation of the Issuer or any Significant Subsidiary of the
Issuer or group of Restricted Subsidiaries of the Issuer that, taken together (as of
the latest audited consolidated financial statements for the Issuer and its
Restricted Subsidiaries), would constitute a Significant Subsidiary and the order or
decree remains unstayed and in effect for 60 consecutive days; and

     (8) any Guarantee ceases to be in full force and effect (other than in accordance with
the terms of such Guarantee and the Indenture) or is declared null and void and
unenforceable or

A-9

 

found to be invalid or any Guarantor denies its liability under the Guarantee of such
Guarantor, (other than by reason of release of such Guarantor from its Guarantee in
accordance with the terms of the Indenture and the Guarantee).

     If an Event of Default (other than an Event of Default specified in clause (7) above) shall
have occurred and be continuing under the Indenture, the Trustee, by written notice to the Issuer,
or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding by
written notice to the Issuer and the Trustee, may declare all amounts owing under the Notes to be
due and payable. Upon such acceleration declaration, the aggregate principal of and accrued and
unpaid interest on the outstanding Notes shall become due and payable immediately.

     If an Event of Default specified in clause (7) above occurs, then all unpaid principal of, and
premium, if any, and accrued and unpaid interest, if any, on all of the outstanding Notes shall
ipso facto become and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder of the Notes.

     (14) No Recourse Against Others. No director, officer, employee or natural person
incorporator of the Issuer or any Guarantor, any shareholder of the Issuer or an annuitant under a
plan of which a shareholder of the Issuer is a trustee or carrier will have any liability for any
indebtedness, obligations or liabilities of the Issuer under the Notes or the Indenture or of any
Guarantor under its Guarantee 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 and the
Guarantees, to the extent permitted by applicable law.

     (15) Authentication. This Note shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.

     The Issuer shall furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to:

Precision Drilling Corporation

4200-150-6th Avenue, S.W.

Calgary, Alberta

T2P 3Y7

Facsimile: (403) 264-0251

Attention: General Counsel

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REGISTRATION PANEL

(NO WRITING HEREON EXCEPT BY THE TRUSTEE)

	 	 	 	 	 
	DATE OF	 	IN WHOSE NAME	 	 
	REGISTRY	 	REGISTERED	 	SIGNATURE OF TRUSTEE
	 
	 	 	 	 
	 	 	 	 	 

ASSIGNMENT FORM

     To assign this Note, fill in the form below:

     (I) or (we) assign and transfer this Note to__________________________

(Insert assignee’s legal name)

			
	Address of assignee:	 	 

(Street Address, City, Province and Postal Code)

Social Insurance Number or U.S. Tax I.D. Number of assignee, if applicable:                                        

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

     Date: _______________________

			
	Signature of Holder	 	 

      Please sign exactly as the name appears on the face of this Note

     Signature Guarantee*: __________________________

[*Participant in a recognized Signature Guarantee Medallion Program (or other signature

guarantor acceptable to the Trustee).]

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OPTION OF HOLDER TO ELECT PURCHASE

     If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or
Section 4.14 of the Indenture, check the box below:

[     ] Section 4.10     [     ] Section 4.14

     If you want to elect to have only part of the Note purchased by the Issuer pursuant to Section
4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased: $

Date:

				
	 	Your Signature:	 	 

(Sign exactly as your name

appears on the face of this Note)

     Tax Identification No.:

     Signature Guarantee*:

[*Participant in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).]

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SCHEDULE OF INCREASES AND DECREASES OF 6.50% SENIOR NOTES

     The following transfers, exchanges and redemption of this Global Note have been made:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Principal	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Amount of this	 	 	 	 
	 	 	Amount of	 	 	Amount of	 	 	Global Note	 	 	 	 
	 	 	Decrease in	 	 	Increase in	 	 	Following	 	 	 	 
	Date of	 	Principal	 	 	Principal	 	 	Such	 	 	 	 
	Transfer, Exchange or	 	Amount of this	 	 	Amount of this	 	 	Decrease	 	 	 	 
	Redemption	 	Global Note	 	 	Global Note	 	 	(or Increase)	 	 	Signature of Trustee	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

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EXHIBIT B

[FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED

BY SUBSEQUENT GUARANTORS]

     This Supplemental Indenture and Guarantee, dated as of      , 20 (this
“Supplemental Indenture” or “Guarantee”), among (the “New Guarantor”),
Precision Drilling Corporation (together with its successors and assigns, the “Issuer”), each other
then-existing Guarantor under the Indenture referred to below (the “Guarantors”) and Valiant Trust
Company (the “Trustee”), as trustee, transfer agent and registrar under such Indenture.

W I T N
E S S E T H:

     WHEREAS, the Issuer, the Guarantors and the Trustee have heretofore executed and delivered an
Indenture, dated as of March 15, 2011 (as amended, supplemented, waived or otherwise modified, the
“Indenture”), providing for the issuance of an unlimited aggregate principal amount of 6.50% Senior
Notes due 2019 of the Issuer (the “Notes”);

     WHEREAS, Section 4.17 and Article X of the Indenture provides that the Issuer will cause any
Restricted Subsidiary of the Issuer that guarantees any Indebtedness of the Issuer or any Guarantor
under a Credit Facility or under debt securities issued in the capital markets, except for any such
Subsidiary if the Fair Market Value of the assets of such Subsidiary together with the Fair Market
Value of the assets of any other Subsidiaries that guaranteed such Indebtedness of the Issuer or
any Guarantor but did not guarantee the Notes, does not exceed U.S.$20.0 million in the aggregate,
to execute and deliver a Guarantee pursuant to which such Restricted Subsidiary will
unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the
principal of, premium, if any, and interest on the Notes and all other obligations under the
Indenture on the same terms and conditions as those set forth in the Indenture.

     WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee, the Issuer and the Guarantors
are authorized to execute and deliver this Supplemental Indenture to amend the Indenture, without
the consent of any Holder to add an additional Guarantor.

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuer, the
existing Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit
of the Holders as follows:

ARTICLE I

Definitions

     SECTION 1.1.Defined Terms

     As used in this Supplemental Indenture, capitalized terms defined in the Indenture or in the
preamble or recitals thereto are used herein as therein defined. The words “herein,” “hereof” and
“hereby” and other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.

D-1

 

ARTICLE II

Agreement to be Bound; Guarantee

          SECTION 2.1. Agreement to be Bound

     The New Guarantor hereby becomes a party to the Indenture as a Guarantor and as such shall
have all of the rights and be subject to all of the obligations and agreements of a Guarantor under
the Indenture. The Guarantor agrees to be bound by all of the provisions of the Indenture
applicable to a Guarantor and to perform all of the obligations and agreements of a Guarantor under
the Indenture.

          SECTION 2.2. Guarantee.

     The New Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary obligor
and not merely as a surety, jointly and severally with each other Guarantor, to each Holder and the
Trustee, the full and punctual payment when due, whether at maturity, by acceleration, by
redemption or otherwise, of the Obligations pursuant to the Notes and the Indenture.

ARTICLE III

Miscellaneous

          SECTION 3.1. Notices

     All notices and other communications to the New Guarantor shall be given as provided in the
Indenture to the New Guarantor, at its address set forth below, with a copy to the Issuer as
provided in this Indenture for notices to the Issuer.

[Name of New Guarantor]

[          ]

[          ]

Fax: [     ]

Attention: [          ]

          SECTION 3.2. Parties

     Nothing expressed or mentioned herein is intended or shall be construed to give any Person,
firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy
or claim under or in respect of this Supplemental Indenture or the Indenture or any provision
herein or therein contained.

          SECTION 3.3. Governing Law

     This Supplemental Indenture shall be governed by, and construed in accordance with, the laws
of the Province of Alberta and the federal laws of Canada applicable therein.

          SECTION 3.4. Service of Process

     The New Guarantor, if it is organized in the U.S., hereby appoints the Issuer as its agent for
service of process in any suit, action or proceeding with respect to this Supplemental Indenture
and the Notes.

D-2

 

          SECTION 3.5. Severability Clause

     In case any provision in this Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and such provision shall be ineffective only to the extent
of such invalidity, illegality or unenforceability.

          SECTION 3.6. Ratification of Indenture; Supplemental Indentures Part of
Indenture; No Liability of Trustee

     Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed
and all the terms, conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of a
Note heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee does
not makes any representation or warranty as to the validity or sufficiency of this Supplemental
Indenture or the New Guarantor’s Guarantee.

          SECTION 3.7. Counterparts

     The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts,
all of which together shall constitute one and the same agreement.

          SECTION 3.8. Headings

     The headings of the Articles and the sections in this Supplemental Indenture are for
convenience of reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.

[Signatures on following page]

D-3

 

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

	 	 	 	 	 
	 	PRECISION DRILLING CORPORATION

 	 
	 	By:  	 	 
	 	  	Name:	 	 
	 	  	Title:	 	 
	 
	 	[EXISTING GUARANTORS]

 	 
	 	By:  	 	 
	 	  	Name:	 	 
	 	  	Title:	 	 
	 
	 	[NEW GUARANTOR],

as a Guarantor

 	 
	 	By:  	 	 
	 	  	Name:	 	 
	 	  	Title:	 	 
	 
	 	VALIANT TRUST COMPANY,

as Trustee

 	 
	 	By:  	 	 
	 	  	Name:	 	 
	 	  	Title:	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	  	Name:	 	 
	 	  	Title:	 	 
	 

D-4

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