Document:

Exhibit 4.1

 

 

 

POGO PRODUCING COMPANY

 

6.875% Senior Subordinated Notes due
2017

 

 

INDENTURE

 

dated as of September 23, 2005

 

 

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

 

as Trustee

 

 

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND
  INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Other Definitions

  	
   

  
	
  Section 1.3

  	
  Incorporation by Reference of Trust Indenture Act

  	
   

  
	
  Section 1.4

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
  THE
  SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Form and Dating

  	
   

  
	
  Section 2.2

  	
  Execution and Authentication

  	
   

  
	
  Section 2.3

  	
  Registrar and Paying Agent

  	
   

  
	
  Section 2.4

  	
  Paying Agent To Hold Money in Trust

  	
   

  
	
  Section 2.5

  	
  Holder Lists

  	
   

  
	
  Section 2.6

  	
  Transfer and Exchange

  	
   

  
	
  Section 2.7

  	
  Replacement Securities

  	
   

  
	
  Section 2.8

  	
  Outstanding Securities

  	
   

  
	
  Section 2.9

  	
  Temporary Securities

  	
   

  
	
  Section 2.10

  	
  Cancellation

  	
   

  
	
  Section 2.11

  	
  Defaulted Interest

  	
   

  
	
  Section 2.12

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Notices to Trustee

  	
   

  
	
  Section 3.2

  	
  Selection of Securities To Be Redeemed

  	
   

  
	
  Section 3.3

  	
  Notice of Redemption

  	
   

  
	
  Section 3.4

  	
  Effect of Notice of Redemption

  	
   

  
	
  Section 3.5

  	
  Deposit of Redemption Price

  	
   

  
	
  Section 3.6

  	
  Securities Redeemed in Part

  	
   

  
	
  Section 3.7

  	
  Optional Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Payment of Securities

  	
   

  
	
  Section 4.2

  	
  SEC Reports

  	
   

  
	
  Section 4.3

  	
  Limitation on Indebtedness

  	
   

  
	
  Section 4.4

  	
  Limitation on Restricted Payments

  	
   

  

 

i

 

	
  Section 4.5

  	
  Limitation on Layering

  	
   

  
	
  Section 4.6

  	
  Limitation on Liens

  	
   

  
	
  Section 4.7

  	
  Limitation on Restrictions on Distributions
  from Restricted Subsidiaries

  	
   

  
	
  Section 4.8

  	
  Limitation on Sales of Assets and
  Subsidiary Stock

  	
   

  
	
  Section 4.9

  	
  Limitation on Affiliate Transactions

  	
   

  
	
  Section 4.10

  	
  Limitation on Sale of Capital Stock of
  Restricted Subsidiaries

  	
   

  
	
  Section 4.11

  	
  Future Subsidiary Guarantees

  	
   

  
	
  Section 4.12

  	
  Maintenance of Properties; Insurance

  	
   

  
	
  Section 4.13

  	
  Payments for Consent

  	
   

  
	
  Section 4.14

  	
  Change of Control

  	
   

  
	
  Section 4.15

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

  	
   

  
	
  Section 4.16

  	
  Appointment to Fill a Vacancy in the Office
  of Trustee

  	
   

  
	
  Section 4.17

  	
  Provision as to Paying Agent

  	
   

  
	
  Section 4.18

  	
  Maintenance of Corporate Existence

  	
   

  
	
  Section 4.19

  	
  Compliance Certificate

  	
   

  
	
  Section 4.20

  	
  Taxes

  	
   

  
	
  Section 4.21

  	
  Stay, Extension and Usury Laws

  	
   

  
	
  Section 4.22

  	
  Further Instruments and Acts

  	
   

  
	
  Section 4.23

  	
  Effectiveness of Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
  SUCCESSOR
  COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Merger and Consolidation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFAULTS
  AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Events of Default

  	
   

  
	
  Section 6.2

  	
  Acceleration of Maturity; Rescission and Annulment

  	
   

  
	
  Section 6.3

  	
  Other Remedies

  	
   

  
	
  Section 6.4

  	
  Waiver of Past Defaults

  	
   

  
	
  Section 6.5

  	
  Control by Majority

  	
   

  
	
  Section 6.6

  	
  Limitation on Suits

  	
   

  
	
  Section 6.7

  	
  Rights of Holders to Receive Payment

  	
   

  
	
  Section 6.8

  	
  Collection Suit by Trustee

  	
   

  
	
  Section 6.9

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  Section 6.10

  	
  Priorities

  	
   

  
	
  Section 6.11

  	
  Undertaking for Costs

  	
   

  

 

ii

 

	
  ARTICLE VII

  	
   

  
	
   

  	
   

  	
   

  
	
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Duties of Trustee

  	
   

  
	
  Section 7.2

  	
  Rights of Trustee.

  	
   

  
	
  Section 7.3

  	
  Individual Rights of Trustee

  	
   

  
	
  Section 7.4

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 7.5

  	
  Notice of Defaults

  	
   

  
	
  Section 7.6

  	
  Reports by Trustee to Holders

  	
   

  
	
  Section 7.7

  	
  Compensation and Indemnity

  	
   

  
	
  Section 7.8

  	
  Replacement of Trustee

  	
   

  
	
  Section 7.9

  	
  Successor Trustee by Merger

  	
   

  
	
  Section 7.10

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 7.11

  	
  Preferential Collection of Claims Against
  Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  	
   

  
	
  DISCHARGE OF INDENTURE; DEFEASANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Discharge of Liability on Securities;
  Defeasance

  	
   

  
	
  Section 8.2

  	
  Conditions to Defeasance

  	
   

  
	
  Section 8.3

  	
  Application of Trust Money

  	
   

  
	
  Section 8.4

  	
  Repayment to Company

  	
   

  
	
  Section 8.5

  	
  Indemnity for U.S. Government Obligations

  	
   

  
	
  Section 8.6

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
   

  	
   

  	
   

  
	
  AMENDMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Without Consent of Holders

  	
   

  
	
  Section 9.2

  	
  With Consent of Holders

  	
   

  
	
  Section 9.3

  	
  Compliance with Trust Indenture Act

  	
   

  
	
  Section 9.4

  	
  Revocation and Effect of Consents and
  Waivers

  	
   

  
	
  Section 9.5

  	
  Notation on or Exchange of Securities

  	
   

  
	
  Section 9.6

  	
  Trustee To Sign Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
   

  	
   

  	
   

  
	
  SUBORDINATION OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Securities Subordinate to Senior
  Indebtedness

  	
   

  
	
  Section 10.2

  	
  Liquidation, Dissolution and Bankruptcy of
  Company

  	
   

  
	
  Section 10.3

  	
  Suspension of Payment When Designated
  Senior Indebtedness in Default

  	
   

  
	
  Section 10.4

  	
  Subrogation to Rights of Holders of Senior
  Indebtedness

  	
   

  

 

iii

 

	
  Section 10.5

  	
  Provisions Solely to Define Relative Rights

  	
   

  
	
  Section 10.6

  	
  Trustee to Effectuate Subordination

  	
   

  
	
  Section 10.7

  	
  No Waiver of Subordination Provisions

  	
   

  
	
  Section 10.8

  	
  Notice to Trustee

  	
   

  
	
  Section 10.9

  	
  Reliance on Judicial Order or Certificate
  of Liquidating Agent

  	
   

  
	
  Section 10.10

  	
  Trustee Not Fiduciary for Holders of Senior
  Indebtedness

  	
   

  
	
  Section 10.11

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

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  
	
   

  	
   

  	
   

  
	
  SUBSIDIARY
  GUARANTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Subsidiary Guarantee

  	
   

  
	
  Section 11.2

  	
  Limitation on Liability

  	
   

  
	
  Section 11.3

  	
  Execution and Delivery of Notation of
  Subsidiary Guarantee

  	
   

  
	
  Section 11.4

  	
  Successors and Assigns; Releases

  	
   

  
	
  Section 11.5

  	
  No Waiver

  	
   

  
	
  Section 11.6

  	
  Right of Contribution

  	
   

  
	
  Section 11.7

  	
  No Subrogation

  	
   

  
	
  Section 11.8

  	
  Modification

  	
   

  
	
  Section 11.9

  	
  Subordination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.1

  	
  Trust Indenture Act Controls

  	
   

  
	
  Section 12.2

  	
  Notices

  	
   

  
	
  Section 12.3

  	
  Communication by Holders with other Holders

  	
   

  
	
  Section 12.4

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  Section 12.5

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  Section 12.6

  	
  When Securities Disregarded

  	
   

  
	
  Section 12.7

  	
  Legal Holidays

  	
   

  
	
  Section 12.8

  	
  Governing Law

  	
   

  
	
  Section 12.9

  	
  No Personal Liability of Directors,
  Officers, Employees and Shareholders

  	
   

  
	
  Section 12.10

  	
  Successors

  	
   

  
	
  Section 12.11

  	
  Multiple Originals; Counterparts

  	
   

  
	
  Section 12.12

  	
  Severability

  	
   

  
	
  Section 12.13

  	
  Consent to Jurisdiction

  	
   

  
	
  Section 12.14

  	
  Table of Contents; Headings

  	
   

  
	
  Section 12.15

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  

 

iv

 

EXHIBITS AND SCHEDULE

 

	
  Exhibit A – Form of Note

  	
   

  
	
  Exhibit B – Form of
  Certificate of Transfer

  	
   

  
	
  Exhibit C – Form of Certificate of Exchange

  	
   

  
	
  Exhibit D – Form of Certificate From
  Acquiring Institutional Accredited Investor

  	
   

  
	
  Exhibit E – Form of Notation of Subsidiary
  Guarantee

  	
   

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

  	
   

  
	
   

  	
   

  
	
  Schedule I -
  Cash Equivalent Investments

  	
   

  

 

v

 

THIS
INDENTURE, dated as of September 23, 2005, is between Pogo Producing
Company, a Delaware corporation (the “Company”), and The Bank of New York Trust
Company, N.A., a national banking association, as trustee (the “Trustee”).

 

Each
party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of the Company’s 6.875% Senior Subordinated
Notes due 2017 issued on the date hereof (the “Initial
Securities”), the Holders of Additional Securities (as defined
herein) and, if and when issued in exchange for the Initial Securities or any
Additional Securities as provided in a Registration Rights Agreement (as
hereinafter defined), the Company’s 6.875% Senior Subordinated Notes due 2017
provided in exchange for such Initial Securities or Additional Securities (as
defined herein):

 

ARTICLE I

 

DEFINITIONS
AND INCORPORATION BY REFERENCE

 

Section 1.1                                      Definitions

 

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

 

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

 

“2015 Notes” means the 6.625% Senior
Subordinated Notes due 2015 of the Company outstanding on the Issue Date.

 

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

 

(1)                                  the
sum of:

 

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

 

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

 

 

(ii)                                  estimated
crude oil and natural gas reserves of the Company and its Restricted
Subsidiaries attributable to extensions, discoveries and other additions and
upward determinations of estimates of proved crude oil and natural gas reserves
(including previously estimated development costs incurred during the period
and the accretion of discount since the prior year end) due to exploration,
development or exploitation, production or other activities, which reserves
were not reflected in such year-end reserve report,

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                 the
greater of (I) the net book value on a date no earlier than the date of the
Company’s latest annual or quarterly financial statements and (II) the

 

2

 

appraised
value, as estimated by independent appraisers, of other tangible assets of the
Company and its Restricted Subsidiaries as of a date no earlier than the date
of the Company’s latest audited financial statements; minus

 

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

 

(a)                                  minority
interests;

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

Restricted
Subsidiary and, with respect to clause (ii) of the preceding sentence, on
the date of consummation of such acquisition of assets.

 

“Additional Assets”
means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

“Asset Disposition”
means any direct or indirect sale, lease (other than an operating lease entered
into in the ordinary course of business), transfer, issuance or other
disposition, or a series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan, of Capital Stock of a Subsidiary
(other than directors’ qualifying shares), property or other assets (each
referred to for the purposes of this definition as a “disposition”) by the
Company or any of its Restricted Subsidiaries, including any disposition by
means of a merger, consolidation or similar transaction.

 

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

 

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

 

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

 

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

 

(4)                                  transactions
permitted under Section 5.1;

 

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

 

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

 

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

 

(8)                                  dispositions
of assets in a single transaction or series of related transactions with an
aggregate Fair Market Value in any calendar year of less than $40 million;

 

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

 

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

 

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

 

5

 

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

 

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

 

(14)                            foreclosure
on assets.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

“Cash Equivalents”
means:

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

“Change of Control”
means:

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

(1)                                  if
the Company or any Restricted Subsidiary:

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

(1)                                  Consolidated
Interest Expense;

 

(2)                                  Consolidated
Income Taxes;

 

(3)                                  consolidated
depletion and depreciation expense;

 

(4)                                  consolidated
exploration expense;

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

(1)                                  interest
expense attributable to Capitalized Lease Obligations;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(4)                                  any
extraordinary gain or loss;

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

“Fair Market Value” means, with respect to
any asset or Investment, the fair market value of such asset or Investment at
the time of the event requiring such determination, (a) as determined in
good faith by senior management of the Company, if the fair market value of
such asset or Investment is less than 3% of ACNTA at the time of the event
requiring such determination, or (b) as determined in good faith by the
Board of Directors of the Company, if the fair market value of such asset or
Investment is equal to or greater than 3% of ACNTA at the time of the event
requiring such determination.  Unless
specifically required by the terms of this Indenture, no valuation or
assessment from any investment banker, appraiser or other third party shall be
required to be obtained in connection with either determination contemplated by
the first sentence of this definition of Fair Market Value.

 

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

 

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

 

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

 

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

 

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

 

(1)                                  to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of
partnership

 

16

 

arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise); or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

(3)                                  the
principal component of all obligations of such Person in respect of letters of
credit, bankers’ acceptances or other similar instruments (including
reimbursement obligations with respect thereto except to the extent such
reimbursement obligation relates to a trade payable and such obligation is
satisfied within 30 days of Incurrence);

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(1)                                  any
obligation in respect of any Production Payment (except as set forth in clause (8) of
the first paragraph of this definition of “Indebtedness”), royalty, overriding
royalty, net profits interest, master limited partnership interest or other
interest in

 

18

 

oil and natural gas properties, reserves or the right
to receive all or a portion of the production or the proceeds from the sale of
production attributable to such properties;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

For
purposes of Section 4.4,

 

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

 

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

 

(3)                                  if
the Company or any Restricted Subsidiary sells or otherwise disposes of any
Voting Stock of any Restricted Subsidiary such that, after giving effect to any
such sale or disposition, such entity is no longer a Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the Fair Market Value (as determined in accordance
with the definition of such term in this Section 1.1, the results
of which

 

20

 

determination shall be set forth in an Officers’ Certificate
delivered to the Trustee) of the Capital Stock of such Subsidiary not sold or
disposed of.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

consent to such Asset Disposition, or by applicable
law be repaid out of the proceeds from such Asset Disposition;

 

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

 

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

 

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

 

“Net Working Capital”
means:

 

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

 

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

 

determined
in accordance with GAAP.

 

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

 

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

 

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

 

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

 

“Officers’ Certificate”
means a certificate signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company (for which in the
case of the annual Officers’ Certificate delivered pursuant to Section 4.19,
at least one of such Officers shall be the principal executive officer,
principal financial officer or principal accounting officer

 

22

 

of the Company)
and that complies with Sections 12.4
and 12.5 of this Indenture and is
delivered to the Trustee.

 

“Oil and Gas Business”
means:

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

“Permitted Business
Investment” means any Investment made in the ordinary course of, and
of a nature that is or shall have become customary in, the Oil and Gas Business
as a means of exploiting, exploring for, acquiring, developing, processing,
gathering, marketing or transporting crude oil, natural gas and other
Hydrocarbons through any agreement, transaction, interest or arrangement that
permits one to share risks or costs, comply with regulatory requirements regarding
local ownership or satisfy other objectives customarily achieved through the
conduct of the Oil and Gas Business jointly with third parties, including:

 

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

 

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

 

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

 

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

 

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

 

(3)                                  Permitted
Business Investments;

 

(4)                                  cash
and Cash Equivalents;

 

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

 

24

 

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

 

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

 

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

 

(9)                                  Investments
by the Company or any of its Restricted Subsidiaries, together with all other
Investments pursuant to this clause (9), in an aggregate outstanding amount not
to exceed 2% of ACNTA at any one time (with the Fair Market Value of such
Investment being measured at the time made and without giving effect to
subsequent changes in value).

 

“Permitted Junior Securities” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(4)                                  Liens
existing on the Issue Date;

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

Securities, such Guarantee shall be subordinated to
such Restricted Subsidiary’s Subsidiary Guarantee to at least the same extent.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(6)                                  any
Capital Stock of such Person.

 

“Senior Subordinated
Indebtedness” means with respect to the Company, the Securities, the
2011 Notes and the 2015 Notes, and with respect to a Subsidiary Guarantor, its
Subsidiary Guarantee and its Guarantee, if any, with respect to the 2011 Notes
or the 2015 Notes, and any 

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

“Treasury Rate” means the yield to maturity
at the time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) which has become publicly available at least two
Business Days prior to the date fixed for redemption (or, if such Statistical
Release is no longer published, any publicly available source of similar market
data)) most nearly equal to the then remaining average life to October 1,
2010; provided, however, that if the average life to October 1, 2010 of
the Notes is not equal to the constant maturity of a United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the average life to October 1,
2010 of the Notes is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.

 

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

 

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

 

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

 

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

 

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

 

“Unrestricted Subsidiary”
means:

 

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

 

(2)                                  any
Subsidiary of an Unrestricted Subsidiary.

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“U.S. Dollar-Equivalent”
means, with respect to any monetary amount in a currency other than the U.S.
dollar, at or as of any time for the determination thereof, the amount of U.S.
dollars obtained by converting such foreign currency involved in such
computation into U.S. dollars at the spot rate for the purchase of U.S. dollars
with the applicable foreign currency as 

 

32

 

quoted by
Reuters (or, if Reuters ceases to provide such spot quotations, by any other
reputable service as is providing such spot quotations, as selected by the
Company) at approximately 11:00 a.m. (New York City time) on the date not
more than two Business Days prior to such determination.  Whenever the definitions in this Section 1.1
or the provisions of Article IV or Article VI refer to
an amount in U.S. dollars, that amount shall be deemed to refer to the U.S.
Dollar Equivalent of the amount denominated in any other currency or currency
unit, including composite currencies.

 

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

 

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

 

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

 

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

 

33

 

Section 1.2                                      Other
Definitions

 

	
  “Affiliate Transaction”

  	
  4.9

  
	
  “Asset Disposition Offer Amount”

  	
  4.8(c)

  
	
  “Asset Disposition Offer Period”

  	
  4.8(c)

  
	
  “Asset Disposition Offer”

  	
  4.8(b)

  
	
  “Asset Disposition Purchase Date”

  	
  4.8(c)

  
	
  “Authenticating Agent”

  	
  2.2

  
	
  “Blockage Notice”

  	
  10.3(b)

  
	
  “Borrowed Money Payment Default”

  	
  6.1

  
	
  “Change of Control Offer”

  	
  4.14

  
	
  “Change of Control Payment Date”

  	
  4.14

  
	
  “Change of Control Payment”

  	
  4.14

  
	
  “covenant defeasance option”

  	
  8.1(a)

  
	
  “Defaulted Interest”

  	
  2.11

  
	
  “Event of Default”

  	
  6.1

  
	
  “Excess Proceeds”

  	
  4.8(b)

  
	
  “Initial Securities”

  	
  Preamble

  
	
  “legal defeasance option”

  	
  8.1(a)

  
	
  “Legal Holiday”

  	
  12.7

  
	
  “Non-Payment Default”

  	
  10.3(b)

  
	
  “Pari Passu Notes”

  	
  4.8(b)

  
	
  “pay the Securities”

  	
  10.3(a)

  
	
  “Paying Agent”

  	
  2.3

  
	
  “Payment Blockage Period”

  	
  10.3(b)

  
	
  “Payment Default”

  	
  10.3(a)

  
	
  “Obligations”

  	
  11.1

  
	
  “Registrar”

  	
  2.3

  
	
  “Restricted Payment”

  	
  4.4(a)

  
	
  “Successor Company”

  	
  5.1(a)

  

 

Section 1.3                                      Incorporation
by Reference of Trust Indenture Act

 

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

 

“Commission” means the SEC;

 

“indenture securities” means the
Securities;

 

“indenture security holder” means a Holder;

 

“indenture to be qualified” means this
Indenture;

 

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

 

34

 

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

 

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

 

Section 1.4                                      Rules of
Construction

 

Unless
the context otherwise requires:

 

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

 

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

 

(3)           “or” is not exclusive;

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II

THE SECURITIES

 

Section 2.1                                      Form and
Dating

 

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

 

35

 

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

 

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

 

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

 

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

 

36

 

Section 2.2                                      Execution
and Authentication

 

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

 

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

 

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

 

The
Trustee shall authenticate and deliver: (i) Initial Securities for
original issue in an aggregate principal amount of $500 million, (ii) if
and when issued, Additional Securities (which may be in the form of Initial
Securities or in the form of Exchange Securities) and (iii) Exchange
Securities for issue only in a Registered Exchange Offer pursuant to a
Registration Rights Agreement, and only in exchange for Initial Securities or
Additional Securities of an equal principal amount, in each case upon a written
order of the Company signed by one Officer of the Company.  Such order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be in the
form of Initial Securities or Exchange Securities.  The Company may issue Additional Securities
under this Indenture subsequent to the Issue Date, subject to Section 4.3
of this Indenture; provided, however, in no event may the Company issue
any Additional Securities at a price that would cause such Additional
Securities to have “original issue discount” within the meaning of Section 1273
of the Code.

 

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

 

Section 2.3                                      Registrar
and Paying Agent

 

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

 

37

 

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

 

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

 

Section 2.4                                      Paying
Agent To Hold Money in Trust

 

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

 

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

 

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

 

Section 2.5                                      Holder
Lists

 

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

 

38

 

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

 

Section 2.6                                      Transfer
and Exchange

 

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

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

40

 

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

 

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

 

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

 

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

 

(D)          the
Registrar receives the following:

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

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

 

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

 

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

 

(D)          the
Registrar receives the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

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

 

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

 

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

 

(1)           Private
Placement Legend.

 

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

 

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

 

44

 

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

 

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

 

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

 

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

 

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

 

45

 

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

 

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

 

(i)            General
Provisions Relating to Transfers and Exchanges.

 

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

 

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

 

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

 

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

 

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

 

46

 

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

 

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

 

Section 2.7                                      Replacement
Securities

 

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

 

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

 

Section 2.8                                      Outstanding
Securities

 

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

 

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

 

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

 

Section 2.9                                      Temporary
Securities

 

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

 

47

 

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

 

Section 2.10                                Cancellation

 

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

 

Section 2.11                                Defaulted
Interest

 

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

 

Section 2.12                                CUSIP
Numbers

 

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

 

48

 

ARTICLE III

REDEMPTION

 

Section 3.1                                      Notices
to Trustee

 

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

 

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

 

Section 3.2                                      Selection
of Securities To Be Redeemed

 

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

 

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

 

Section 3.3                                      Notice
of Redemption

 

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

 

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

 

(1)           the Redemption Date;

 

49

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3.4                                      Effect
of Notice of Redemption

 

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

 

Section 3.5                                      Deposit
of Redemption Price

 

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

 

50

 

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

 

Section 3.6                                      Securities
Redeemed in Part

 

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

 

Section 3.7                                      Optional
Redemption

 

(a)           On and after October 1, 2010,
the Company may redeem all or, from time to time, part of the Securities upon
not less than 10 nor more than 60 days’ notice at the Redemption Prices
(expressed as percentages of the principal amount) set forth below plus accrued
and unpaid interest on the Securities, if any, to the applicable Redemption
Date (subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date), if redeemed during the 12-month period beginning October 1
of the years indicated:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  103.438

  	
  %

  
	
  2011

  	
   

  	
  102.292

  	
  %

  
	
  2012

  	
   

  	
  101.146

  	
  %

  
	
  2013 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           Prior to October 1, 2008, the
Company may on one or more occasions redeem up to 35% of the aggregate original
principal amount of the Securities (including any Additional Securities), with
the Net Cash Proceeds of one or more Equity Offerings at a Redemption Price of
106.875% of the principal amount of the Securities, plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date); provided that (i) at least 65% of the
aggregate original principal amount of the Securities (including any Additional
Securities) remains outstanding after each such redemption and (ii) such
redemption occurs within 120 days after the closing of the related Equity
Offering.

 

(c)           The Company may, at its option, prior
to October 1, 2010, redeem the Securities (including any Additional
Securities), as a whole at any time or in part from time to time, at a
Redemption Price equal to the sum of:

 

(1)           the principal amount thereof, plus

 

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

 

51

 

(3)           the Applicable Premium at the
Redemption Date.

 

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

 

(d)           Except pursuant to the preceding
paragraph (b) or (c), the Securities will not be redeemable at the Company’s
option prior to October 1, 2010. 
Except as set forth under Sections 4.8 and 4.14, the Company
shall not be required to make mandatory redemption or sinking fund payments
with respect to the Securities or to repurchase the Securities at the option
the Holders.

 

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

 

ARTICLE IV

COVENANTS

 

Section 4.1                                      Payment
of Securities

 

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

 

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

 

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

 

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

 

52

 

Section 4.2                                      SEC
Reports

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 4.3                                      Limitation
on Indebtedness

 

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

 

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

 

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

 

53

 

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

 

(1)           additional Indebtedness of the Company and its Restricted Subsidiaries
Incurred pursuant to any Credit Facility, so long as the aggregate amount of
all Indebtedness Incurred under this clause (1) that is at any time
outstanding (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) does not exceed the greater of (x) $1.25 billion
and (y) $600 million plus 12.5% of ACNTA, in each case, as of the
date of such Incurrence;

 

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

 

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

 

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

 

shall be
deemed, in each case, to constitute an Incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be;

 

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

 

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

 

(5)           any Hedging Obligations; provided, that such Hedging Obligations
are related to business transactions of the Company or its Restricted
Subsidiaries entered into in the ordinary course of business and are Incurred
for bona fide hedging purposes (and not for speculative purposes) of the
Company or its Restricted Subsidiaries (as determined in good faith by the
Board of Directors or senior management of the Company);

 

54

 

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

 

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

 

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

 

(c)           [Intentionally omitted].

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

Section 4.4                                      Limitation
on Restricted Payments

 

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

 

56

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            50%
of Consolidated Net Income for the period (treated as one accounting period)
from April 1, 2001 to the end of the most recent fiscal quarter ending
prior to the date of such Restricted Payment for which internal financial
statements are in existence (or, in case such Consolidated Net Income is a
deficit, minus 100% of such deficit); plus

 

57

 

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

 

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

 

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

 

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

 

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

 

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

 

a.             the Fair Market
Value of the Company’s Investment in such Subsidiary as of the date of such
redesignation; or

 

b.             such Fair Market
Value, as of the date on which such Subsidiary was originally designated as an
Unrestricted Subsidiary after the Issue Date;

 

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

 

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

 

(1)           any purchase, repurchase, redemption,
defeasance or other acquisition or retirement of Capital Stock of the Company
or its direct or indirect parent or Subordinated 

 

58

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(9)           Restricted Payments in an aggregate
amount not to exceed $50 million since the Issue Date (after giving effect to
any subsequent reduction in the amount of any Investment 

 

59

 

made pursuant to
this clause (9) as a result of the repayment or other disposition thereof
for cash, the amount of such reduction not to exceed the initial amount of such
Investment).

 

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

 

Section 4.5                                      Limitation
on Layering

 

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

 

Section 4.6                                      Limitation
on Liens

 

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

 

Section 4.7                                      Limitation
on Restrictions on Distributions from Restricted Subsidiaries

 

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

 

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

 

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

 

60

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

61

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 4.8                                      Limitation
on Sales of Assets and Subsidiary Stock

 

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

 

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

 

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

 

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

 

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

 

62

 

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

 

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

 

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

 

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

 

63

 

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

 

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

 

(d)           [Intentionally omitted.]

 

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

 

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

 

64

 

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

 

(2)           securities, notes or other
obligations received by the Company or any Restricted Subsidiary of the Company
from the transferee that are converted by the Company or such Restricted
Subsidiary into cash within 180 days.

 

(g)           [Intentionally omitted.]

 

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

 

Section 4.9                                      Limitation
on Affiliate Transactions

 

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

 

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

 

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

 

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

 

65

 

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

 

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

 

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

 

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

 

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

 

(4)           any transaction between the Company
and a Restricted Subsidiary or between Restricted Subsidiaries;

 

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

 

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

 

Section 4.10                                Limitation
on Sale of Capital Stock of Restricted Subsidiaries

 

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

 

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

 

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

 

66

 

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

 

Section 4.11                                Future
Subsidiary Guarantees

 

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

 

Section 4.12                                Maintenance
of Properties; Insurance

 

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

 

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

 

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

 

Section 4.13                                Payments
for Consent

 

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

 

67

 

Section 4.14                                Change
of Control

 

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

 

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

 

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

 

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

 

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

 

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

 

68

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 4.17                                Provision
as to Paying Agent

 

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

 

69

 

Section 4.18                                Maintenance
of Corporate Existence

 

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

 

Section 4.19                                Compliance
Certificate

 

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

 

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

 

Section 4.20                                Taxes

 

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

 

Section 4.21                                Stay,
Extension and Usury Laws

 

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

 

70

 

Section 4.22                                Further
Instruments and Acts

 

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

 

Section 4.23                                Effectiveness
of Covenants

 

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

 

ARTICLE V

SUCCESSOR COMPANY

 

Section 5.1                                      Merger
and Consolidation

 

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

 

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

 

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

 

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

 

71

 

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

 

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

 

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

 

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

 

ARTICLE VI

DEFAULTS AND REMEDIES

 

Section 6.1                                      Events
of Default

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

72

 

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

 

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

 

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

 

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

 

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

 

(i)            commences
a voluntary case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.2                                      Acceleration
of Maturity; Rescission and Annulment

 

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

 

74

 

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

 

Section 6.3                                      Other
Remedies

 

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

 

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

 

Section 6.4                                      Waiver
of Past Defaults

 

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

 

Section 6.5                                      Control
by Majority

 

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

 

75

 

Section 6.6                                      Limitation
on Suits

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.7                                      Rights
of Holders to Receive Payment

 

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

 

Section 6.8                                      Collection
Suit by Trustee

 

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

 

Section 6.9                                      Trustee
May File Proofs of Claim

 

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

 

76

 

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

 

Section 6.10                                Priorities

 

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

 

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

 

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

 

Third: to the Company.

 

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

 

Section 6.11                                Undertaking
for Costs

 

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

 

ARTICLE VII

TRUSTEE

 

Section 7.1                                      Duties
of Trustee

 

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

 

77

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.2                                      Rights
of Trustee.

 

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

 

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

 

78

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.3                                      Individual
Rights of Trustee

 

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

 

79

 

Section 7.4                                      Trustee’s
Disclaimer

 

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

 

Section 7.5                                      Notice
of Defaults

 

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

 

Section 7.6                                      Reports
by Trustee to Holders

 

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

 

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

 

Section 7.7                                      Compensation
and Indemnity

 

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

 

80

 

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

 

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

 

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

 

Section 7.8                                      Replacement
of Trustee

 

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

 

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

 

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

 

81

 

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

 

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

 

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

 

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

 

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

 

Section 7.9                                      Successor
Trustee by Merger

 

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

 

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

 

Section 7.10                                Eligibility; Disqualification

 

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

 

82

 

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

 

Section 7.11                                Preferential
Collection of Claims Against Company

 

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

 

ARTICLE VIII

DISCHARGE OF INDENTURE;
DEFEASANCE

 

Section 8.1                                      Discharge
of Liability on Securities; Defeasance

 

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

 

(b)           Subject to Section 8.1(c) and
Section 8.2, the Company at any time may terminate (i) all its
obligations under the Securities and this Indenture (“legal defeasance option”), and after
giving effect to such legal defeasance, any omission to comply with such
obligations shall no longer constitute a Default or Event of Default or (ii) its
obligations under, Section 4.2, Section 4.3, Section 4.4, Section 4.5, Section 4.6, Section 4.7, Section 4.8, Section 4.9, Section 4.10, 

 

83

 

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

 

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

 

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

 

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

 

Section 8.2                                      Conditions
to Defeasance

 

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

 

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

 

84

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 8.3                                      Application
of Trust Money

 

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

 

Section 8.4                                      Repayment
to Company

 

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

 

85

 

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

 

Section 8.5                                      Indemnity
for U.S. Government Obligations

 

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

 

Section 8.6                                      Reinstatement

 

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

 

ARTICLE IX

AMENDMENTS

 

Section 9.1                                      Without
Consent of Holders

 

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

 

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

 

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

 

86

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 9.2                                      With
Consent of Holders

 

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

 

87

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

88

 

Section 9.3                                      Compliance
with Trust Indenture Act

 

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

 

Section 9.4                                      Revocation
and Effect of Consents and Waivers

 

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

 

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

 

Section 9.5                                      Notation
on or Exchange of Securities

 

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

 

Section 9.6                                      Trustee
To Sign Amendments

 

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

 

89

 

ARTICLE X

SUBORDINATION OF SECURITIES

 

Section 10.1                                Securities
Subordinate to Senior Indebtedness

 

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

 

Section 10.2                                Liquidation,
Dissolution and Bankruptcy of Company

 

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

 

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

 

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

 

Section 10.3                                Suspension
of Payment When Designated Senior Indebtedness in Default

 

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

 

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

 

90

 

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

 

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

 

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

 

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

 

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

 

91

 

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

 

Section 10.4                                Subrogation
to Rights of Holders of Senior Indebtedness

 

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

 

Section 10.5                                Provisions
Solely to Define Relative Rights

 

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

 

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

 

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

 

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

 

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

 

Section 10.6                                Trustee
to Effectuate Subordination

 

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

 

Section 10.7                                No
Waiver of Subordination Provisions

 

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

 

92

 

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

 

Section 10.8                                Notice
to Trustee

 

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

 

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

 

93

 

Section 10.9                                Reliance
on Judicial Order or Certificate of Liquidating Agent

 

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

 

Section 10.10                          Trustee
Not Fiduciary for Holders of Senior Indebtedness

 

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

 

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

 

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

 

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

 

ARTICLE XI

SUBSIDIARY GUARANTEE

 

Section 11.1                                Subsidiary
Guarantee

 

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

 

94

 

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

 

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

 

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

 

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

 

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

 

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

 

95

 

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

 

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

 

Section 11.2                                Limitation
on Liability

 

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

 

Section 11.3                                Execution
and Delivery of Notation of Subsidiary Guarantee

 

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

 

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

 

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

 

Section 11.4                                Successors
and Assigns; Releases

 

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

 

96

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 11.5                                No
Waiver

 

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

 

Section 11.6                                Right
of Contribution

 

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

 

97

 

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

 

Section 11.7                                No
Subrogation

 

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

 

Section 11.8                                Modification

 

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

 

Section 11.9                                Subordination

 

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

 

98

 

ARTICLE XII

MISCELLANEOUS

 

Section 12.1                                Trust
Indenture Act Controls

 

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

 

Section 12.2                                Notices

 

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

 

if
to the Company or any Subsidiary Guarantor:

 

Pogo Producing Company

5 Greenway Plaza, Suite 2700

Houston, Texas 
77046-2504

Attention: 
Chief Financial Officer

Fax:  (713) 297-4954;
or

 

if
to the Trustee:

 

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

600 Pearl Street, Suite 420

Dallas, Texas 
75201

Attention: 
Corporate Trust Department

Fax:  (214) 880-8241

 

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

 

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

 

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

 

99

 

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

 

Section 12.3                                Communication
by Holders with other Holders

 

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

 

Section 12.4                                Certificate
and Opinion as to Conditions Precedent

 

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

 

Section 12.5                                Statements
Required in Certificate or Opinion

 

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

 

Section 12.6                                When
Securities Disregarded

 

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

 

100

 

Section 12.7                                Legal
Holidays

 

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

 

Section 12.8                                Governing
Law

 

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

 

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

 

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

 

Section 12.10                          Successors

 

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

 

Section 12.11                          Multiple
Originals; Counterparts

 

The
parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.  One signed copy is enough to prove this
Indenture.  This Indenture may be
executed in multiple counterparts which, when taken together, shall constitute
one instrument.

 

Section 12.12                          Severability

 

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

 

Section 12.13                          Consent
to Jurisdiction

 

Each
of the Company and any Subsidiary Guarantor irrevocably submits to the
non-exclusive jurisdiction of any competent New York state or U.S. federal
court located in the City and State of New York over any suit, action or
proceeding arising out of or relating to this 

 

101

 

Indenture or
any Subsidiary Guarantee or Security. 
Each of the Company and any Subsidiary Guarantor irrevocably waives, to
the fullest extent permitted by law, any objection which it may have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in any inconvenient forum.

 

Section 12.14                          Table of
Contents; Headings

 

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

 

Section 12.15                          No
Adverse Interpretation of Other Agreements

 

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

 

[Signatures on following page]

 

102

 

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

 

	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Ulm, II

  
	
   

  	
   

  	
  James P. Ulm, II

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK

  
	
   

  	
   

  	
  TRUST COMPANY, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John C. Stohlmann

  
	
   

  	
   

  	
  John C. Stohlmann

  
	
   

  	
   

  	
  Vice President

  

 

Signature Page to Pogo Producing
Company Indenture, dated as of September 23, 2005

 

 

EXHIBIT A

 

[FACE OF SECURITY]

 

POGO PRODUCING COMPANY

 

6.875% SENIOR
SUBORDINATED NOTE DUE 2017

 

	
   

  	
  CUSIP NO.                

  
	
   

  	
   

  
	
  No.

  	
  Principal Amount
  $                    

  

 

Pogo
Producing Company, a Delaware corporation, promises to pay to                    ,
or registered assigns, the principal sum of                    
dollars [or such other amount as may be indicated on the Schedule of
Exchanges of Interests in the Global Security attached hereto]* on October 1,
2017.

 

Interest Payment
Dates:  April 1 and October 1
commencing April 1, 2006.

 

Record Dates:  March 15 and September 15.

 

Dated:

 

	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

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

as Trustee, certifies that this is one of the

Securities referred to in the Indenture.

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

*
Delete for Definitive Security

 

A-1

 

[BACK OF SECURITY]

 

POGO PRODUCING COMPANY

 

6.875% SENIOR
SUBORDINATED NOTE DUE 2017

 

[Insert
the Global Security Legend, if applicable pursuant to the provisions of the
Indenture]

 

[Insert
the Private Placement Legend, if applicable pursuant to the provisions of the
Indenture]

 

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

 

1.             Interest.  Pogo Producing Company, a Delaware
corporation (the “Company”), promises to pay interest on the principal amount
of this Security at 6.875% per annum from September 23, 2005 until
maturity [and shall pay the Special Interest, if any, payable pursuant to Section 2(c) of
the Registration Rights Agreement.]*  The
Company will pay interest [including Special Interest, if any,]* semi-annually
in arrears on April 1 and October 1 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each, an “Interest
Payment Date”).  Interest on the
Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance; provided that
if there is no existing Default in the payment of interest, and if this
Security is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be April 1,
2006.  The Company will pay interest
(which includes post-petition interest that may be paid in any proceeding under
any Bankruptcy Law) on overdue principal and premium, if any, at the rate then
in effect; it will pay interest (which includes post-petition interest that may
be paid in any proceeding under any Bankruptcy Law) on overdue installments of
interest [including Special Interest, if any,]* (without regard to any
applicable grace periods) from time to time on demand at the same rate as on
overdue principal to the extent lawful. 
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

 

2.             Method of Payment.  The Company will pay interest on the
Securities (except Defaulted Interest) to the Persons who are registered
Holders of Securities at the close of business on the March 15 or September 15
next preceding the Interest Payment Date, even if such Securities are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.11 of the Indenture with respect to Defaulted
Interest.  The Securities will be payable
as to principal, premium, if any, and interest at the office or agency
maintained or designated by the Company for such purpose within the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest, 

 

*
Delete for Exchange Security

 

A-2

 

and premium, if any, on all Global Securities and all other Securities
the Holders of which will have provided wire transfer instructions to the
Company or the Paying Agent prior to the relevant record date.  Such payment will be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.  The
principal of the Securities shall be payable only upon surrender of any
Security at the specified offices of any Paying Agent.

 

3.             Paying Agent and Registrar.  Initially, The Bank of New York Trust
Company, N.A. (“Trustee”), will act as Paying Agent and Registrar.  The Company may appoint and change any Paying
Agent or Registrar without notice to any Holder.  The Company or any of its Subsidiaries may
act as Paying Agent or Registrar.

 

4.             Indenture.  The Company issued the Securities under an
Indenture, dated as of September 23, 2005 (the “Indenture”), between
the Company and the Trustee.  The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act.  The Securities are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms.  To the extent any provision of
this Security conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling to the extent
permitted by law.  The Securities are
unsecured obligations of the Company. 
The Company initially issued $500,000,000 aggregate principal amount of
Securities.  The Company may issue
Additional Securities under the Indenture, subject to Section 4.3
of the Indenture.

 

5.             Optional Redemption.

 

(a)           On and after October 1, 2010,
the Company may redeem all or, from time to time, part of the Securities upon
not less than 10 nor more than 60 days’ notice at the Redemption Prices
(expressed as percentages of the principal amount) set forth below plus accrued
and unpaid interest on the Securities, if any, to the applicable Redemption
Date (subject to the right of Holders of record on the relevant record date to
receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date), if redeemed during the 12-month period beginning October 1
of the years indicated:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2010

  	
   

  	
  103.438

  	
  %

  
	
  2011

  	
   

  	
  102.292

  	
  %

  
	
  2012

  	
   

  	
  101.146

  	
  %

  
	
  2013 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           Prior to October 1, 2008, the
Company may on one or more occasions redeem up to 35% of the aggregate original
principal amount of the Securities (including any Additional Securities), with
the Net Cash Proceeds of one or more Equity Offerings at a Redemption Price of
106.875% of the principal amount of the Securities, plus accrued and unpaid
interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date); provided that (i) at least 65% of the
aggregate original principal amount of the Securities (including any Additional
Securities) remains outstanding after each such 

 

A-3

 

redemption and (ii) such redemption occurs within 120 days after
the closing of the related Equity Offering.

 

(c)           The Company may, at its option, prior
to October 1, 2010, redeem the Securities, as a whole at any time or in
part from time to time, at a Redemption Price equal to the sum of:

 

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

 

(2)           the Applicable Premium at the
Redemption Date.

 

6.             Subordination.  The Securities are subordinated to Senior
Indebtedness of the Company.  To the
extent provided in the Indenture, Senior Indebtedness of the Company must be
paid before the Securities may be paid. 
In addition, a Subsidiary Guarantee, if any, is subordinated to Senior
Indebtedness of the relevant Subsidiary Guarantor.  The Company agrees, and each Holder by
accepting a Security agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect and appoints the
Trustee as attorney-in-fact for such purpose.

 

7.             Denominations, Transfer, Exchange.  The Securities are in registered form without
coupons in denominations of $1,000 and integral multiples of $1,000.  The transfer of Securities may be registered
and Securities may be exchanged as provided in the Indenture.  The Registrar or the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder to pay any transfer tax or other
governmental taxes and fees required by law or permitted by the Indenture.  The Company, the Trustee and the Registrar need
not exchange or register the transfer of any Security or portion of a Security
selected for redemption, except for the unredeemed portion of any Security
being redeemed in part.  Also, the
Company, the Trustee and the Registrar need
not exchange or register the transfer of any Securities for a period of 15 days
before a selection of Securities to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.

 

If
this is a Global Security, this Security represents the aggregate principal
amount of outstanding Securities from time to time endorsed hereon, and the
aggregate principal amount of outstanding Securities represented by this
Security may from time to time be reduced or increased, as appropriate, to
reflect exchanges, repurchases, transfers and redemptions in accordance with
the Indenture.

 

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

 

9.             Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture
and the Securities may be amended or supplemented with the written consent of
the Holders of at least a majority in outstanding principal amount of the
Securities, and any existing Default or Event of Default or compliance with any
provision of the Indenture or the Securities may be waived with the written
consent of the Holders of a majority in outstanding principal amount of 

 

A-4

 

the Securities.  Without the
consent of any Holder of a Security, the Indenture or the Securities may be
amended or supplemented (i) to cure any ambiguity, omission, defect or
inconsistency, (ii) to provide for the assumption by successor entities of
the Company’s obligations under the Indenture and the Securities, (iii) to
provide for uncertificated Securities in addition to or in place of
certificated Securities, (iv) to add or release Guarantees with respect to
the Securities, (v) to secure the Securities or any Subsidiary Guarantee, (vi) to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power conferred upon the Company, (vii) to make any
change that does not adversely affect the rights of any Holder, (viii) to
comply with any requirement of the SEC in connection with qualifying the
Indenture under the Trust Indenture Act, (ix) to provide for the issuance
of the Exchange Securities, (x) to provide for the issuance of Additional
Securities or (xi) to make any change in the subordination provisions of the
Indenture that would limit or terminate the benefits available to any holder of
Senior Indebtedness of the Company under such subordination provisions, in each
case in accordance with and as more fully provided in the Indenture.

 

10.           Defaults.  If an Event
of Default shall occur and be continuing, the Securities may be declared (or
shall become without any declaration, as the case may be) due and payable in
the manner and with the effect provided in the Indenture.

 

11.           Defeasance.  The Indenture contains provisions for defeasance of
(i) the entire indebtedness of the Company on this Security and (ii) certain
restrictive covenants and the related Events of Default, subject to compliance
by the Company with certain conditions set forth in the Indenture, which
provisions apply to this Security.

 

12.           Authentication.  This
Security will not be valid until authenticated by the manual signature of the
Trustee or an Authenticating Agent.

 

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

 

14.           [Compliance with Registration
Rights Agreement.  By
accepting a Security, each Holder acknowledges and agrees to the provisions of
the Exchange and Registration Rights Agreement, dated as of September 23, 2005,
among the Company and the other parties named on the signature pages thereof,
including the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]*

 

15.           CUSIP Numbers. 
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. 
No representation is made as to the accuracy of such numbers either as
printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.

 

*
Delete for Exchange Security

 

A-5

 

16.          Governing Law.  The law of the State of New York will govern
and be used to construe and enforce the Indenture and the Securities.

 

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

 

Pogo Producing Company

P.O. Box 2504

Houston, Texas  77252-2504

 

* Delete for Exchange Security

 

A-6

 

ASSIGNMENT FORM

 

To
assign this Security, fill in the form below:

 

	
  (I) or (we) assign and transfer this Security to:

  	
   

  
	
   

  	
  (Insert assignee’s legal name)

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

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

  

 

 

and irrevocably appoint

to transfer this Security on the books of the Company.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
   

  

 

	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the face

  
	
   

  	
   

  	
  of this Security)

  

 

 

	
  Signature Guarantee:*

  	
   

  	
   

  

 

*              Participant in a
recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).

 

A-7

 

Option of Holder to
Elect Purchase

 

If
you want to elect to have this Security purchased by the Company pursuant to Section 4.8
or Section 4.14 of the Indenture, check the appropriate box below:

 

	
  o
  Section 4.8

  	
   

  	
  o
  Section 4.14

  

 

If you want to elect to have
only part of the Security purchased by the Company pursuant to Section 4.8
or Section 4.14 of the Indenture, state the amount you elect to
have purchased:

 

$             

 

	
  Date:

  	
   

  	
   

  

 

	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the face

  
	
   

  	
   

  	
  of this Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
				

 

 

	
  Signature Guarantee:*

  	
   

  	
   

  

 

*              Participant in a
recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).

 

A-8

 

[TO BE ATTACHED TO
GLOBAL SECURITIES]

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY

 

The
following increases or decreases in this Global Security have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of
  Decrease in

  Principal Amount of this

  Global Security

  	
   

  	
  Amount of
  Increase in

  Principal Amount of this

  Global Security

  	
   

  	
  Principal
  Amount of this

  Global Security 

  Following such Decrease 

  or Increase

  	
   

  	
  Signature of
  Authorized 

  Officer of Trustee or 

  Securities Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-9

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Pogo Producing Company

P. O. Box 2504
Houston, Texas  77252-2504

 

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

600 Pearl Street, Suite 420

Dallas, Texas 
75201

Attention:  Corporate Trust
Department

 

Re: 
Pogo Producing Company 6.875% Senior Subordinated Notes due 2017

 

(CUSIP
[730448 AS 6](1) [U72645 AC 5](2)

 

Reference is hereby made to the Indenture, dated as of September 23,
2005 (the “Indenture”), between Pogo Producing
Company (the “Company”) and The Bank of New
York Trust Company, N.A., as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

                     (the
“Transferor”) owns and proposes to
transfer the Security[ies] or interest in such Security[ies] specified in Annex A hereto, in the principal amount of $                     
in such Security[ies]
or interests (the “Transfer”),
to                                     
(the “Transferee”).  In connection with the Transfer, the
Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.  o  Check if Transferee will
take delivery of a beneficial interest in the 144A Global Security or a
Restricted Definitive Security pursuant to Rule 144A.  The Transfer is being effected pursuant to
and in accordance with Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Security is being transferred to a Person that the
Transferor reasonably believes is purchasing the beneficial interest or
Definitive Security for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and such
Person and each such account is a “qualified institutional buyer” within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A,
and such Transfer is in compliance with any applicable securities laws of any
state of the United States.  Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Security will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Security and/or the Restricted Definitive
Security and in the Indenture.

 

(1)           For Securities sold
in reliance on Rule 144A.

 

(2)           For Securities sold
in reliance on Regulation S.

 

B-1

 

2.  o  Check if Transferee will
take delivery of a beneficial interest in the Regulation S Global Security or a
Restricted Definitive Security pursuant to Regulation S.  The Transfer is being effected pursuant to and
in accordance with Rule 903 or Rule 904 under the Securities Act and,
accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a Person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903 or Rule 904 of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is
being made prior to the expiration of the Restricted Period, the transfer is
not being made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Security will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Security and/or the Restricted Definitive Security and in the Indenture and the
Securities Act.

 

3.  o  Check if Transferee is an
Institutional Accredited Investor that will take delivery of a beneficial
interest in the IAI Global Security or a Restricted Definitive Security.  The Transfer is being effected in compliance
with the transfer restrictions applicable to beneficial interests in Restricted
Global Securities and Restricted Definitive Securities and pursuant to and in
accordance with the Securities Act and any applicable securities laws of any
state of the United States, and is supported by a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and, if such
transfer is in respect of a principal amount of Securities of less than
$250,000, an Opinion of Counsel provided by the Transferor or Transferee.

 

4.  o  Check if Transferee will
take delivery of a beneficial interest in an Unrestricted Global Security or of
an Unrestricted Definitive Security.

 

(a)  o  Check if Transfer is
pursuant to Rule 144.  (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. 
Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Security
will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Securities, on
Restricted Definitive Securities and in the Indenture.

 

(b)  o  Check if Transfer is
Pursuant to Regulation S.  (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance 

 

B-2

 

with the Securities Act.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Security will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Securities, on Restricted Definitive Securities and in the Indenture.

 

(c)  o  Check if Transfer is
Pursuant to Other Exemption.  (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule 903
or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act.  Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Security will not
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Securities or Restricted Definitive
Securities and in the Indenture.

 

This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Insert
  Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
   

  
					

 

B-3

 

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

 

Pogo Producing Company

P. O. Box 2504
Houston, Texas  77252-2504

 

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

600 Pearl Street, Suite 420

Dallas, Texas 
75201

Attention:  Corporate Trust
Department

 

Re: 
Pogo Producing Company 6.875% Senior Subordinated Notes due 2017

 

(CUSIP [730448 AS 6](1)  [U72645 AC 5](2)

 

Reference is hereby made
to the Indenture, dated as of September 23, 2005 (the “Indenture”), between Pogo Producing Company (the “Company”) and The Bank of New York Trust Company, N.A., as
trustee.  Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

 

                           
(the “Owner”) owns and proposes to exchange
the Security[s]
or interest in such Security[s] specified herein, in the principal amount of $                           
in such Security[s]
or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:

 

1.             Exchange of Restricted
Definitive Securities or Beneficial Interests in a Restricted Global Security
for Unrestricted Definitive Securities or Beneficial Interests in an
Unrestricted Global Security

 

(a)  o     Check if Exchange is from
beneficial interest in a Restricted Global Security to beneficial interest in
an Unrestricted Global Security. 
In connection with the Exchange of the Owner’s beneficial interest in a
Restricted Global Security for a beneficial interest in an Unrestricted Global
Security in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Securities and pursuant to and
in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Security is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.

 

(1)           For Securities sold
in reliance on Rule 144A.

 

(2)           For Securities sold
in reliance on Regulation S.

 

C-1

 

(b)  o     Check if Exchange is from
Restricted Definitive Security to Unrestricted Definitive Security.  In connection with the Owner’s Exchange of a
Restricted Definitive Security for an Unrestricted Definitive Security, the
Owner hereby certifies (i) the Unrestricted Definitive Security is being
acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Security is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.

 

This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.

 

	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
  Dated:

  	
   

  	
   

  
					

 

C-2

 

EXHIBIT D

 

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

,       

 

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

as Trustee and
Registrar

600 Pearl Street, Suite 420

Dallas, Texas 
75201

Attention:  Corporate Trust Department

 

Ladies
and Gentlemen:

 

We
are delivering this letter in connection with our purchase of 6.875% Senior
Subordinated Notes due 2017 (the “Notes”)
of Pogo Producing Company (the “Company”). 
We hereby confirm that:

 

(i)            we are an “accredited investor”
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended (the “Securities Act”), or an entity in
which all of the equity owners are accredited investors within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (an “Institutional
Accredited Investor”);

 

(ii)           any purchase of Notes by us will be
for our own account or, if we are buying for one or more institutional accounts
for which we are acting as fiduciary or agent and we are not a bank (as defined
in Section 3(a)(2) of the Securities Act) or a savings and loan
association or other institution (as defined in Section 3(a)(5)(A) of
the Securities Act), each such account is an Institutional Accredited Investor;

 

(iii)          we have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of purchasing Notes and we, and any accounts for which we are acting,
are able to bear the economic risks of its or their investment;

 

(iv)          we are not acquiring Notes with a view
to any distribution thereof in a transaction that would violate the Securities
Act or the securities laws of any State of the United States or any other applicable
jurisdiction; provided, however, that the disposition of our
property and the property of any accounts for which we are acting as fiduciary
shall remain at all times within our control; and

 

(v)           we acknowledge that we have had
access to such financial and other information, and have been afforded the
opportunity to ask such questions of representatives of the Company and receive
answers thereto, as we deem necessary in connection with our decision to
purchase Notes.

 

We
understand that the Notes were offered in a transaction not involving any
public offering within the meaning of the Securities Act and that the Notes
have not been registered under the Securities Act, and we agree, on our own
behalf and on behalf of each account for 

 

D-1

 

which we
acquire any Notes, that such Notes may be offered, resold, pledged or otherwise
transferred only (i) in the United States to a person whom we reasonably
believe to be a qualified institutional buyer (as defined in Rule 144A
under the Securities Act) in a transaction meeting the requirements of Rule 144A
under the Securities Act, (ii) in a transaction meeting the requirements
of Rule 144 under the Securities Act, (iii) outside the United States
in a transaction meeting the requirements of Rule 903 or 904 under the
Securities Act, (iv) to the Company, (v) to another Institutional
accredited Investor, or (vi) pursuant to an effective registration
statement, and, in each case, in accordance with any applicable securities laws
of any State of the United States, and we will, and each subsequent holder of
the Notes is required to, notify any subsequent purchaser from us or it of the
resale restrictions set forth in clauses (i) – (vi) above.  We acknowledge that the Notes will bear
legends substantially to the foregoing effect. 
We understand that the registrar will not be required to accept for
registration of transfer any Notes, except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with.

 

We
acknowledge that you and the Company will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases
to be accurate and complete.

 

THIS
LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

	
   

  	
   

  
	
   

  	
  [Name of Purchaser]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Address:

 

D-2

 

EXHIBIT E

 

FORM OF NOTATION OF
SUBSIDIARY GUARANTEE

 

For
value received, the undersigned Subsidiary Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally, with each
other Subsidiary Guarantor, unconditionally guaranteed, to the extent set forth
in, and subject to the provisions of, the Indenture dated as of September 23,
2005 (the “Indenture”) between Pogo Producing
Company (the “Company”), and The Bank of New
York Trust Company, N.A., as trustee (the “Trustee”), (a) the
full and punctual payment of the principal of, premium, if any, and interest
[including Special Interest,]* on the Securities (as defined in the Indenture)
when due, whether at Stated Maturity, or upon optional redemption, required
repurchase pursuant to Section 4.8 or Section 4.14 of
the Indenture, acceleration or otherwise, and all other monetary obligations
owing by the Company under the Indenture (including obligations owing to the
Trustee) and the Securities, all as more fully provided in Article XI
of the Indenture.  The obligations of the
undersigned Subsidiary Guarantor to the Holders of Securities and to the
Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly
set forth in Article XI of the Indenture and reference is hereby
made to the Indenture for the precise terms of the Subsidiary Guarantee.  Each Holder of a Security, by accepting the
same, (a) agrees to and shall be bound by such provisions and (b) appoints
the Trustee attorney-in-fact of such Holder for such purpose; provided, however, that each Subsidiary Guarantee shall be
subject to release in accordance with the provisions of the Indenture.

 

	
   

  	
  [NAME OF GUARANTOR(S)]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-1

 

EXHIBIT F

 

FORM OF SUPPLEMENTAL
INDENTURE

TO BE DELIVERED BY FUTURE SUBSIDIARY GUARANTORS

 

THIS
SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”),
is dated as of                  ,
20    , among [Name of Future Subsidiary Guarantor(s)] (the
“New  Subsidiary
Guarantor”), a subsidiary of Pogo Producing Company, a Delaware
corporation (the “Company”), the other Subsidiary
Guarantors (as defined in the Indenture referred to herein), the Company and
The Bank of New York Trust Company, N.A., as trustee under the Indenture
referred to herein (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS,
the Company has heretofore executed and delivered to the Trustee an indenture
(the “Indenture”), dated as of September 23,
2005, providing for the issuance of its 6.875% Senior Subordinated Notes due
2017 (the “Securities”);

 

WHEREAS,
Section 4.11 of the Indenture provides that in certain
circumstances the Company will require a Restricted Subsidiary to execute and
deliver a supplemental indenture to the Indenture providing for a Subsidiary
Guarantee of such Restricted Subsidiary, and such circumstances have arisen in
relation to the New Subsidiary Guarantor; and

 

WHEREAS,
pursuant to Article XI of the Indenture, the Company and the
Trustee are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture without the consent of any Holder.

 

NOW
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Subsidiary
Guarantors, the Company and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Securities as follows:

 

1.             CAPITALIZED TERMS.  Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

 

2.             AGREEMENT TO GUARANTEE.  The New Subsidiary Guarantor hereby agrees,
jointly and severally, with all other Subsidiary Guarantors, to unconditionally
Guarantee to each Holder and to the Trustee the Obligations, to the extent set
forth in the Indenture and subject to the provisions in the Indenture.  The obligations of the Subsidiary Guarantors
to the Holders of Securities and to the Trustee pursuant to the Subsidiary
Guarantees and the Indenture are expressly set forth in Article XI
of the Indenture and reference is hereby made to the Indenture for the precise
terms of the Subsidiary Guarantees.

 

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

 

F-1

 

agrees to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give them effect.

 

4.             EXECUTION AND DELIVERY.  Each Subsidiary Guarantor agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Subsidiary Guarantee.

 

5.             NEW YORK LAW TO GOVERN.  THE LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE.

 

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

 

7.             EFFECT OF HEADINGS.  The Section headings herein are for
convenience only and shall not affect the construction hereof.

 

8.             THE TRUSTEE.  The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Subsidiary Guarantors and the
Company.  This Supplemental Indenture is
executed and accepted by the Trustee subject to all the terms set forth in the
Indenture with the same force and effect as if those terms were repeated at
length herein and made applicable to the Trustee with respect hereto.

 

F-2

 

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

 

	
  Dated:

  	
   

  	
  , 20

  	
   

  	
   

  

 

 

	
   

  	
  [NEW SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [OTHER SUBSIDIARY GUARANTORS]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

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

  
	
   

  	
    as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

F-3

 

SCHEDULE I

 

CASH
EQUIVALENT INVESTMENTS

 

The
Existing Credit Facility defines Cash Equivalent Investments to mean, at any
time:

 

(a)           securities maturing not more than one
year after such time, issued or guaranteed by the United States Government or
any Government Sponsored Enterprise;

 

(b)           commercial paper, maturing not more
than nine moths from the date of issue, which is issued (i) a corporation
(other than an Affiliate or a Subsidiary of the Company) organized under the
laws of any state of the United States or of the District of Columbia and
having an Investment Grade Rating or (ii) any lender (or its holding
company) party to the Existing Credit Facility (“Lender”);

 

(c)           any certificate of deposit, banker’s
acceptance or other bank obligations, maturing not more than one year after
such time, which is issued by either (i) a commercial banking institution
that is a member of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $100,000,000 or (ii) any
Lender;

 

(d)           any repurchase agreement entered into
with any Lender (or other commercial banking institution of the state referred
to in clause (c)(i) above that (i) is secured by a fully perfected
security interest in any obligation of the type described in any of clauses (a) through
(c) above, and (ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase obligation of
such Lender (or other commercial banking institution) thereunder;

 

(e)           any loan participation in a loan
which is to a borrower with a long-term unsecured debt rating of investment
grade or higher from any nationally recognized rating agency and is made by (i) a
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$100,000,000 or (ii) any Lender;

 

(f)            any evidence of indebtedness,
maturing not more than one year after such time, issued or guaranteed by any
agency or instrumentality of the United States Government, which has a rating
of “A-” or better from S&P or a rating of “A3” or better from Moody’s;

 

(g)           any interest bearing account at, or
certificate of deposit maturing not more than one year after such time issued
by, a U.S. savings and loan association which has a rating of “A-” or better
from S&P or a rating of “A3” or
better from Moody’s on its long-term unsecured debt and which has combined
capital and surplus and undivided profits of not less than $100,000,000;

 

(h)           any interest bearing account at, or
certificate of deposit maturing not more than one year after such time, payable
in U.S. dollars and issued by, (i) a foreign banking institution or
foreign branch of a U.S. banking institution, which banking institution has a
rating of “A-” or 

 

I-1

 

better from
S&P or a rating of “A3” or better from Moody’s on its long-term unsecured
debt and combined capital and surplus and undivided profits of not less than
$100,000,000, or (ii) any foreign subsidiary of a U.S. banking
institution, which U.S. banking institution has a rating of “A-” or better from
S&P or a rating of “A3” or better from Moody’s and which subsidiary has
combined capital and surplus and undivided profits of not less than
$100,000,000 or (iii) any Lender;

 

(i)            any evidence of Indebtedness
(including variable rate demand notes), maturing not more than one year after
such time, issued by any State of the United States, by any county or
municipality organized or incorporated under the laws of any State of the
United States or by any agency or subdivision of any of the foregoing, in each
case rated “A-” or better by S&P or rated “A3” or better by Moody’s;

 

(j)            any auction rate or preferred
securities issued by domestic or foreign corporations, municipalities or
closed-end management investment companies that are designed as short term
money market instruments and are rated “A-” or better by S&P or “A3” or
better by Moody’s, provided that
such Investment will not result in any violation of Federal Reserve System
Board Regulation U and further provided
that the Company’s ownership interest will not exceed (and will not be
convertible into shares which exceed) 5% of the issuer’s outstanding shares
entitled to vote unless such ownership interest is acquired pursuant to a
merger agreement between the Company and such issuer;

 

(k)           any mutual funds or similar
investment vehicles investing primarily in Investments of the types set forth
in the foregoing clauses (a) through (j), provided
that ratings requirements shall be applicable to the mutual fund rather than
the underlying Investments, as follows: such mutual funds shall, in each case,
have a rating of “A-” or better from S&P or a rating of “A3” from Moody’s
or a rating satisfactory to the Administrative Agent under the Existing Credit
Facility from another recognized rating agency satisfactory to the
Administrative Agent, provided, however,
that (i) any Investment which when made complies with the requirements of
any of the foregoing clauses (f), (g) or (h) may continue to be held
notwithstanding that such Investment if made thereafter would not comply with
such requirements; and (ii) no Investment otherwise permitted by clause (i) or
(j) shall be permitted to be made directly or indirectly through a mutual fund
if, immediately or after giving effect thereto, any Default shall have occurred
and be continuing; and

 

(l)            any Investments outside the United
States by the Company or any of its Restricted Subsidiaries which are the
functional foreign equivalents in all material respects to the Investments
described in the foregoing clauses (a) through (g), (i) and (k); provided, however, that at no time may the
aggregate amount of any individual Investment permitted under this clause (l)
constitute more than 10% of the total principal amount of any applicable mutual
fund or other similar investment vehicle in which the Investment has been made.

 

I-2Exhibit 4.2

 

Pogo
Producing Company

 

$500,000,000 Principal Amount of

6.875% Senior Subordinated Notes due 2017

 

Exchange and
Registration Rights Agreement

 

September 23, 2005

 

Goldman,
Sachs & Co.,

  As representative of the several Purchasers

  named in Schedule I to the Purchase
Agreement

85
Broad Street

New
York, New York 10004

 

Ladies
and Gentlemen:

 

Pogo Producing Company, a Delaware corporation (the “Company”),
proposes to issue and sell to the Purchasers (as defined herein) upon the terms
set forth in the Purchase Agreement (as defined herein) $500,000,000 principal
amount of its 6.875% Senior Subordinated Notes due 2017.

 

As an inducement to the Purchasers to enter into the
Purchase Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Company agrees with the Purchasers for the benefit
of holders (as defined herein) from time to time of the Registrable Securities
(as defined herein) as follows:

 

1.                                       Certain Definitions.  For purposes of this Exchange and Registration
Rights Agreement, the following terms shall have the following respective
meanings:

 

“Base Interest”
shall mean the interest that would otherwise accrue on the Securities under the
terms thereof and the Indenture, without giving effect to the provisions of
this Agreement.

 

The term “broker-dealer”
shall mean any broker or dealer registered with the Commission under the
Exchange Act.

 

“Closing Date”
shall mean the date on which the Securities are initially issued.

 

“Commission”
shall mean the United States Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities
Act, whichever is the relevant statute for the particular purpose.

 

“DTC” shall
mean The Depository Trust Company.

 

“Effective Time,”
in the case of (i) an Exchange Registration, shall mean the time and date
as of which the Commission declares the Exchange Registration Statement
effective or as of which the Exchange Registration Statement otherwise becomes
effective and (ii) a Shelf 

 

 

Registration,
shall mean the time and date as of which the Commission declares the Shelf
Registration Statement effective or as of which the Shelf Registration
Statement otherwise becomes effective.

 

“Electing Holder”
shall mean any holder of Registrable Securities that has returned a completed
and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(ii) or
3(d)(iii) hereof.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934, or any successor thereto, as the
same shall be amended from time to time.

 

“Exchange Offer”
shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange Registration”
shall have the meaning assigned thereto in Section 3(c) hereof.

 

“Exchange Registration
Statement” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange Securities”
shall have the meaning assigned thereto in Section 2(a) hereof.

 

The term “holder”
shall mean each of the Purchasers and other persons who acquire Registrable
Securities from time to time (including any successors or assigns), in each
case for so long as such person owns any Registrable Securities.

 

“Indenture”
shall mean the Indenture, dated as of September 23, 2005, between the
Company and The Bank of New York Trust Company, N.A., as Trustee, as the same
shall be amended from time to time.

 

“Notice and Questionnaire”
means a Notice of Registration Statement and Selling Securityholder
Questionnaire substantially in the form of Exhibit A hereto.

 

The term “person”
shall mean a corporation, association, partnership, organization, business,
individual, government or political subdivision thereof or governmental agency.

 

“Purchase Agreement”
shall mean the Purchase Agreement, dated September 21, 2005, between the
Purchasers and the Company relating to the Securities.

 

“Purchasers”
shall mean the Purchasers named in Schedule I to the Purchase Agreement.

 

“Registrable Securities”
shall mean the Securities; provided, however, that a Security shall cease to be
a Registrable Security when (i) in the circumstances contemplated by Section 2(a) hereof,
the Security has been exchanged for an Exchange Security in an Exchange Offer
as contemplated in Section 2(a) hereof (provided that any Exchange Security that, pursuant
to the last two sentences of Section 2(a), is included in a prospectus for
use in connection with resales by broker-dealers shall be deemed to be a
Registrable Security with respect to Sections 5, 6 and 9 until termination
of the Resale Period; (ii) in the circumstances contemplated by Section 2(b) hereof,
a Shelf Registration Statement registering such Security under the Securities
Act has been declared or becomes effective and such Security has been sold or
otherwise transferred by the holder thereof pursuant to and in a manner contemplated
by such effective Shelf Registration Statement; (iii) such Security is
sold pursuant to Rule 144

 

2

 

under
circumstances in which any legend borne by such Security relating to
restrictions on transferability thereof, under the Securities Act or otherwise,
is removed by the Company or pursuant to the Indenture; (iv) such Security
is eligible to be sold pursuant to paragraph (k) of Rule 144; or (v) such
Security shall cease to be outstanding.

 

“Registration Default”
shall have the meaning assigned thereto in Section 2(c) hereof.

 

“Registration Expenses”
shall have the meaning assigned thereto in Section 4 hereof.

 

“Resale Period”
shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Restricted Holder”
shall mean (i) a holder that is an affiliate of the Company within the
meaning of Rule 405, (ii) a holder who acquires Exchange Securities
outside the ordinary course of such holder’s business, (iii) a holder who
has arrangements or understandings with any person to participate in the
Exchange Offer for the purpose of distributing Exchange Securities and (iv) a
holder that is a broker-dealer, but only with respect to Exchange Securities
received by such broker-dealer pursuant to an Exchange Offer in exchange for
Registrable Securities acquired by the broker-dealer directly from the Company.

 

“Rule 144,”
“Rule 405” and “Rule 415” shall mean, in each case,
such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.

 

“Securities”
shall mean the Company’s 6.875% Senior Subordinated Notes due 2017 to be issued
and sold to the Purchasers and securities issued in exchange therefor or in
lieu thereof pursuant to the Indenture.

 

“Securities Act”
shall mean the Securities Act of 1933, or any successor thereto, as the same
shall be amended from time to time.

 

“Shelf Registration”
shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Shelf Registration
Statement” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Special Interest”
shall have the meaning assigned thereto in Section 2(c) hereof.

 

“Suspension Period”
shall have the meaning assigned thereto in Section 3(h) hereof.

 

“Trust Indenture Act”
shall mean the Trust Indenture Act of 1939, or any successor thereto, and the
rules, regulations and forms promulgated thereunder, all as the same shall be
amended from time to time.

 

“Trustee”
shall mean The Bank of New York Trust Company, N.A.

 

Unless the context otherwise requires, any reference herein
to a “Section” or “clause” refers to a Section or clause, as the case may
be, of this Exchange and Registration Rights Agreement, and the words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this
Exchange and Registration Rights Agreement as a whole and not to any particular
Section or other subdivision.

 

3

 

All references to “$” shall refer to the lawful currency of
the United States of America.

 

2.                                      Registration Under the Securities Act.

 

(a)                                  Except as set forth in
Section 2(b) below, the Company agrees to file under the Securities
Act, no later than 90 days after the Closing Date, a registration statement
relating to an offer to exchange (such registration statement, the “Exchange
Registration Statement”, and such offer, the “Exchange Offer”) any and all of
the Securities for a like aggregate principal amount of debt securities issued
by the Company, which debt securities are substantially identical to the
Securities (and are entitled to the benefits of a trust indenture which is
substantially identical to the Indenture or is the Indenture and which has been
qualified under the Trust Indenture Act), except that they have been registered
pursuant to an effective registration statement under the Securities Act and do
not contain provisions for the additional interest contemplated in Section 2(c) below
(such new debt securities hereinafter called “Exchange Securities”).  The Company agrees to use its reasonable best
efforts to cause the Exchange Registration Statement to become effective under
the Securities Act no later than 180 days after the Closing Date.  The Exchange Offer will be registered under
the Securities Act on the appropriate form and will comply with all applicable
tender offer rules and regulations under the Exchange Act.  The Company further agrees to use its
reasonable best efforts to commence and complete the Exchange Offer no later
than 45 days after such registration statement has become effective, hold the
Exchange Offer open for at least 30 days and exchange the Exchange Securities
for all Registrable Securities that may legally be exchanged in the Exchange
Offer and that have been properly tendered and not withdrawn on or prior to the
expiration of the Exchange Offer. The Exchange Offer will be deemed to have
been “completed” only if the debt securities received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities are, upon
receipt, transferable by each such holder without restriction under the
Securities Act (except for the requirement to deliver a prospectus included in
the Exchange Offer Registration Statement applicable to resales by certain
broker-dealers of Exchange Securities received by them pursuant to the Exchange
Offer) and the Exchange Act. The Exchange Offer shall be deemed to have been
completed upon the earlier to occur of (i) the Company having exchanged
the Exchange Securities for all outstanding Registrable Securities pursuant to
the Exchange Offer and (ii) the Company having exchanged, pursuant to the
Exchange Offer, Exchange Securities for all Registrable Securities that may
legally be exchanged in the Exchange Offer and that have been properly tendered
and not withdrawn before the expiration of the Exchange Offer, which shall be
on a date that is at least 30 days following the commencement of the Exchange
Offer. The Company agrees (x) to include in the Exchange Registration Statement
a prospectus for use in any resales by any holder of Exchange Securities that
is a broker-dealer eligible under Commission interpretations as of the date
hereof to use such a prospectus for such resales and (y) to keep such Exchange
Registration Statement effective for a period (the “Resale Period”) beginning
when Exchange Securities are first issued in the Exchange Offer and ending upon
the earlier of the expiration of the 180th day after the Exchange Offer has
been completed or such time as such broker-dealers no longer own any
Registrable Securities.  With respect to
such Exchange Registration Statement, such holders shall have the benefit of
the rights of indemnification and contribution set forth in Sections 6(a),
(c), (d) and (e) hereof.

 

(b)                                 If (i) on or
prior to the time the Exchange Offer is completed existing Commission
interpretations are changed such that the debt securities received by holders
other than Restricted Holders in the Exchange Offer for Registrable Securities
are not or would not be, upon receipt, transferable by each such holder without
restriction under the Securities Act ; (ii)

 

4

 

the
Exchange Offer has not been completed within 255 days following the Closing
Date or (iii) the Exchange Offer is not available to any holder of the
Securities because of applicable law or Commission interpretations and, unless
it is a Purchaser, such holder notifies the Company of such unavailability
prior to the 60th day following consummation of the Exchange Offer, the Company
shall, in lieu of (or, in the case of clause (iii), in addition to) conducting
the Exchange Offer contemplated by Section 2(a), use its reasonable best
efforts to file under the Securities Act no later than the later of 90 days
following the Closing Date and 45 days after the time such obligation to file
arises, a “shelf” registration statement providing for the registration of, and
the sale on a continuous or delayed basis by the holders of, all of the
Registrable Securities, pursuant to Rule 415 or any similar rule that
may be adopted by the Commission (such filing, the “Shelf Registration” and
such registration statement, the “Shelf Registration Statement”).  The Company agrees to use its reasonable best
efforts (x) to cause the Shelf Registration Statement to become or be declared
effective no later than 120 days after such Shelf Registration Statement is
filed and to keep such Shelf Registration Statement continuously effective for
a period ending on the earlier of the second anniversary of the Effective Time
or such time as there are no longer any Registrable Securities outstanding,
provided, however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the prospectus
forming a part thereof for resales of Registrable Securities unless such holder
is an Electing Holder, and (y) after the Effective Time of the Shelf
Registration Statement, promptly upon the request of any holder of Registrable
Securities that is not then an Electing Holder, to take any action reasonably
necessary to enable such holder to use the prospectus forming a part thereof
for resales of Registrable Securities, including, without limitation, any
action necessary to identify such holder as a selling securityholder in the
Shelf Registration Statement; provided, however, that nothing in this Clause
(y) shall (a) relieve any such holder of the obligation to return a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(d)(iii) hereof or (b) in the case of a Shelf
Registration under clause (iii) above, require the Company to enable any
holder not covered by such clause to use such prospectus.  The Company further agrees to supplement or
make amendments to the Shelf Registration Statement, as and when required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement or by the Securities Act or rules and
regulations thereunder for shelf registration, and the Company agrees to
furnish to each Electing Holder copies of any such supplement or amendment
prior to its being used or promptly following its filing with the Commission.

 

(c)                                  In the event that (i) the
Company has not filed the Exchange Registration Statement or Shelf Registration
Statement on or before the date on which such registration statement is
required to be filed pursuant to Section 2(a) or 2(b), respectively,
or (ii) such Exchange Registration Statement or Shelf Registration
Statement has not become effective or been declared effective by the Commission
on or before the date on which such registration statement is required to
become or be declared effective pursuant to Section 2(a) or 2(b),
respectively, or (iii) the Exchange Offer has not been completed within 45
days after the initial effective date of the Exchange Registration Statement
relating to the Exchange Offer (if the Exchange Offer is then required to be
made) or (iv) any Exchange Registration Statement or Shelf Registration
Statement required by Section 2(a) or 2(b) hereof is filed and
declared effective but shall thereafter either be withdrawn by the Company or
shall become subject to an effective stop order issued pursuant to Section 8(d) of
the Securities Act suspending the effectiveness of such registration statement
(except as specifically permitted herein) without being succeeded as promptly
as practicable by an additional registration statement filed and declared
effective (each such event referred to in clauses (i) through (iv), a “Registration

 

5

 

Default”
and each period during which a Registration Default has occurred and is
continuing, a “Registration Default Period”), then, as liquidated damages for
such Registration Default, subject to the provisions of Section 8(b),
special interest (“Special Interest”), in addition to the Base Interest, shall
accrue at a per annum rate of 0.25% for the first 90 days of the Registration
Default Period, at a per annum rate of 0.50% for the second 90 days of the
Registration Default Period, at a per annum rate of 0.75% for the third 90 days
of the Registration Default Period and at a per annum rate of 1.0% thereafter
for the remaining portion of the Registration Default Period.  Following the cure of all Registration
Defaults, the accrual of Special Interest shall cease.

 

(d)                                 The Company shall take
all actions reasonably necessary or advisable to be taken by it to ensure that
the transactions contemplated herein are effected as so contemplated.

 

(e)                                  Any reference herein
to a registration statement as of any time shall be deemed to include any
document incorporated, or deemed to be incorporated, therein by reference as of
such time and any reference herein to any post-effective amendment to a
registration statement as of any time shall be deemed to include any document
incorporated, or deemed to be incorporated, therein by reference as of such
time.

 

3.                                      Registration Procedures.  If the Company files a registration statement
pursuant to Section 2(a) or Section 2(b), the following provisions
shall apply:

 

(a)                                  At or before the
Effective Time of the Exchange Offer or the Shelf Registration, as the case may
be, the Company shall qualify the Indenture under the Trust Indenture Act.

 

(b)                                 In the event that such
qualification would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.

 

(c)                                  In connection with the
Company’s obligations with respect to the registration of Exchange Securities
as contemplated by Section 2(a) (the “Exchange Registration”), if
applicable, the Company shall:

 

(i)                                     prepare and file with
the Commission no later than 90 days after the Closing Date, an Exchange
Registration Statement on any form which may be utilized by the Company and
which shall permit the Exchange Offer and resales of Exchange Securities by
broker-dealers during the Resale Period to be effected as contemplated by Section 2(a),
and use its reasonable best efforts to cause such Exchange Registration
Statement to become effective no later than 180 days after the Closing Date;

 

(ii)                                  as soon as practicable
prepare and file with the Commission such amendments and supplements to such
Exchange Registration Statement and the prospectus included therein as may be
necessary to effect and maintain the effectiveness of such Exchange
Registration Statement for the periods and purposes contemplated in Section 2(a) hereof
and as may be required by the applicable rules and regulations of the
Commission and the instructions applicable to the form of such Exchange
Registration Statement, and promptly provide each broker-dealer holding
Exchange Securities with such number of copies of the prospectus included
therein (as then amended or supplemented), in conformity in all material
respects with the requirements of the Securities Act and the Trust Indenture
Act and the rules and 

 

6

 

regulations
of the Commission thereunder, as such broker-dealer reasonably may request prior
to the expiration of the Resale Period, for use in connection with resales of
Exchange Securities with respect to which it may use such prospectus;

 

(iii)                               promptly notify each
broker-dealer that has notified the Company in writing that it is a broker-dealer
eligible to participate in the Exchange Offer and that has requested or
received copies of the prospectus included in such registration statement, and
confirm such advice in writing, (A) when such Exchange Registration
Statement or the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and, with respect to
such Exchange Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any comments by the Commission and by
the blue sky or securities commissioner or regulator of any state with respect
thereto or any request by the Commission for amendments or supplements to such
Exchange Registration Statement or prospectus or for additional information, (C) of
the issuance by the Commission of any stop order suspending the effectiveness
of such Exchange Registration Statement or the initiation or threatening of any
proceedings for that purpose, (D) if at any time during the Resale Period
when a prospectus is required to be delivered under the Securities Act, the
Company becomes aware that the representations and warranties of the Company
contemplated by Section 5 cease to be true and correct in all material
respects, (E) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Exchange Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, or (F) at any time during the Resale Period when a
prospectus is required to be delivered under the Securities Act, that such
Exchange Registration Statement, prospectus, prospectus amendment or supplement
or post-effective amendment does not conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission thereunder or contains an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;

 

(iv)                              in the event that the
Company would be required, pursuant to Section 3(c)(iii)(F) above, to
notify any broker-dealers holding Exchange Securities, without unreasonable
delay prepare and furnish to each such holder a reasonable number of copies of
a prospectus supplemented or amended so that, as thereafter delivered to
purchasers of such Exchange Securities during the Resale Period, such
prospectus shall conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and each such broker-dealer agrees
that upon receipt of any notice from the Company pursuant to Section 3(c)(iii)(F) it
shall forthwith discontinue the disposition of Exchange Securities pursuant to
the Exchange Offer Registration Statement applicable to such Exchange
Securities until such broker-dealer shall have received copies of such amended
or supplemented prospectus, and if so directed by the Company, such
broker-dealer shall deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies, then in such broker-dealer’s
possession of the prospectus covering such Exchange Securities at the time of
receipt of such notice;

 

7

 

(v)                                 use its reasonable
best efforts to obtain the withdrawal of any order suspending the effectiveness
of such Exchange Registration Statement or any post-effective amendment thereto
at the earliest practicable date;

 

(vi)                              if required, use its
reasonable best efforts to (A) register or qualify the Exchange Securities
under the securities laws or blue sky laws of such jurisdictions as are
contemplated by Section 2(a) no later than the commencement of the
Exchange Offer, (B) keep such registrations or qualifications in effect
and comply with such laws so as to permit the continuance of offers, sales and
dealings therein in such jurisdictions until the expiration of the Resale
Period and (C) take any and all other actions as may be reasonably
necessary or advisable to enable each broker-dealer holding Exchange Securities
that is eligible to use the prospectus included in the Exchange Registration
Statement in connection with resales thereof to consummate the disposition
thereof in such jurisdictions; provided, however, that the Company shall not be
required for any such purpose to (1) qualify as a foreign corporation in
any jurisdiction wherein it would not otherwise be required to qualify but for
the requirements of this Section 3(c)(vi), (2) consent to general
service of process in any such jurisdiction, qualify as a dealer in securities
in an jurisdiction in which it is not so qualified or subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject or (3) make any changes to its certificate of
incorporation or bylaws or any agreement between it and its stockholders;

 

(vii)                           use its reasonable
best efforts to obtain the consent or approval of each governmental agency or
authority, whether federal, state or local, which may be required to effect the
Exchange Registration, the Exchange Offer and the offering and sale of Exchange
Securities by broker-dealers that are eligible to use the prospectus included
in the Exchange Registration Statement in connection with resales thereof
during the Resale Period;

 

(viii)                        provide a CUSIP number
for all Exchange Securities, not later than the applicable Effective Time;

 

(ix)                                comply with all
applicable rules and regulations of the Commission, and make generally
available to the Company’s securityholders as soon as practicable but no later
than 18 months after the effective date of such Exchange Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of
the Company, Rule 158 thereunder).

 

(d)                                 In connection with the
Company’s obligations with respect to the Shelf Registration, if applicable,
the Company shall:

 

(i)                                     prepare and file with
the Commission within the time periods specified in and subject to the terms of
Section 2(b), a Shelf Registration Statement on any form which may be
utilized by the Company and which shall register all of the Registrable
Securities for resale by the holders thereof, in accordance with such method or
methods of disposition as may be specified by such of the holders as, from time
to time, may be Electing Holders, and use its reasonable best efforts to cause
such Shelf Registration Statement to become effective within the time periods
specified in Section 2(b);

 

8

 

(ii)                                  not less than 30
calendar days prior to the Effective Time of the Shelf Registration Statement,
mail the Notice and Questionnaire to the holders of record of Registrable
Securities (or, if the Securities are then in book-entry form, to all of the
direct participants of DTC that DTC identifies to the Company on a security
position listing as holders of the Securities); no holder shall be entitled to
be named as a selling securityholder in the Shelf Registration Statement as of
the Effective Time, and no holder shall be entitled to use the prospectus
forming a part thereof for resales of Registrable Securities at any time,
unless such holder has returned a completed and signed Notice and Questionnaire
to the Company by the deadline for response set forth therein; provided,
however, holders of Registrable Securities shall have at least 28 calendar days
from the date on which the Notice and Questionnaire is first mailed to such
holders to return a completed and signed Notice and Questionnaire to the
Company;

 

(iii)                               after the Effective
Time of the Shelf Registration Statement, upon the request of any holder of
Registrable Securities that is not then an Electing Holder, promptly send a
Notice and Questionnaire to such holder; provided, however, that the Company
shall not be required to take any action to name such holder as a selling
securityholder in the Shelf Registration Statement or to enable such holder to
use the prospectus forming a part thereof for resales of Registrable Securities
until such holder has returned a completed and signed Notice and Questionnaire
to the Company and then only if such holder is eligible to be so named or to
use such prospectus pursuant to Section 2(b);

 

(iv)                              as soon as practicable
prepare and file with the Commission such amendments and supplements to such
Shelf Registration Statement and the prospectus included therein as may be
necessary to effect and maintain the effectiveness of such Shelf Registration
Statement for the period specified in Section 2(b) hereof and as may
be required by the applicable rules and regulations of the Commission and
the instructions applicable to the form of such Shelf Registration Statement,
and furnish to the Electing Holders copies of any such supplement or amendment
simultaneously with or prior to its being used or filed with the Commission;

 

(v)                                 comply with the
provisions of the Securities Act with respect to the disposition of all of the
Registrable Securities covered by such Shelf Registration Statement in
accordance with the intended methods of disposition by the Electing Holders
provided for in such Shelf Registration Statement;

 

(vi)                              provide (A) the
Electing Holders, (B) the underwriters (which term, for purposes of this
Exchange and Registration Rights Agreement, shall include a person deemed to be
an underwriter within the meaning of Section 2(a)(11) of the Securities
Act), if any, thereof, (C) any sales or placement agent therefor, (D) not
more than one counsel for any such underwriter or agent and (E) not more
than one counsel for all the Electing Holders the opportunity to participate in
the preparation of such Shelf Registration Statement, each prospectus included
therein or filed with the Commission and each amendment or supplement thereto;

 

(vii)                           for a reasonable
period prior to the filing of such Shelf Registration Statement, and throughout
the period specified in Section 2(b), make available at reasonable times
at the Company’s principal place of business or such other reasonable 

 

9

 

place for inspection
by the persons referred to in Section 3(d)(vi) who shall certify to
the Company that they have a current intention to sell the Registrable
Securities pursuant to the Shelf Registration such financial and other
information and books and records of the Company, and cause the officers,
employees, counsel and independent certified public accountants of the Company
to respond to such inquiries, as shall be reasonably necessary, in the judgment
of the respective counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that each such party shall be required to maintain in
confidence and not to disclose to any other person any information or records
reasonably designated by the Company as being confidential, until such time as (A) such
information becomes a matter of public record (whether by virtue of its
inclusion in such registration statement or otherwise, but not because of
disclosure, unauthorized by the Company or its representatives, by such person
or its representatives), or (B) such person shall be required so to
disclose such information pursuant to a subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter (subject to the
requirements of such order, and only after such person shall have given the
Company prompt prior written notice of such requirement), or (C) such
information is required to be set forth in such Shelf Registration Statement or
the prospectus included therein or in an amendment to such Shelf Registration
Statement or an amendment or supplement to such prospectus in order that such
Shelf Registration Statement, prospectus, amendment or supplement, as the case
may be, complies with applicable requirements of the federal securities laws
and the rules and regulations of the Commission and does not contain an
untrue statement of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;

 

(viii)                        promptly notify each
of the Electing Holders, any sales or placement agent therefor and any
underwriter thereof (which notification may be made through any managing
underwriter that is a representative of such underwriter for such purpose) and
confirm such advice in writing, (A) when such Shelf Registration Statement
or the prospectus included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such Shelf
Registration Statement or any post-effective amendment, when the same has
become effective, (B) of any comments by the Commission and by the blue
sky or securities commissioner or regulator of any state with respect thereto
or any request by the Commission for amendments or supplements to such Shelf
Registration Statement or prospectus or for additional information, (C) of
the issuance by the Commission of any stop order suspending the effectiveness
of such Shelf Registration Statement or the initiation or threatening of any
proceedings for that purpose, (D) if at any time when a prospectus is
required to be delivered under the Securities Act, the Company becomes aware
that the representations and warranties of the Company contemplated by Section 3(d)(xvii)
or Section 5 cease to be true and correct in all material respects, (E) of
the receipt by the Company of any notification with respect to the suspension
of the qualification of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, or (F) if
at any time when a prospectus is required to be delivered under the Securities
Act, that such Shelf Registration Statement, prospectus, prospectus amendment
or supplement or post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission thereunder
or contains an untrue statement of a material fact or omits to state any
material fact required to be 

 

10

 

stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;

 

(ix)                                use its reasonable
best efforts to obtain the withdrawal of any order suspending the effectiveness
of such registration statement or any post-effective amendment thereto at the
earliest practicable date;

 

(x)                                   if requested by any
managing underwriter or underwriters, any placement or sales agent or any
Electing Holder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as is required by the applicable rules and
regulations of the Commission and as such managing underwriter or underwriters,
such agent or such Electing Holder reasonably specifies should be included
therein relating to the terms of the sale of such Registrable Securities,
including information with respect to the principal amount of Registrable
Securities being sold by such Electing Holder or agent or to any underwriters,
the name and description of such Electing Holder, agent or underwriter, the offering
price of such Registrable Securities and any discount, commission or other
compensation payable in respect thereof, the purchase price being paid therefor
by such underwriters and with respect to any other terms of the offering of the
Registrable Securities to be sold by such Electing Holder or agent or to such
underwriters; and make all required filings of such prospectus supplement or
post-effective amendment promptly after notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;

 

(xi)                                furnish to each
Electing Holder, each placement or sales agent, if any, therefor, each
underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(vi) an
executed copy (or, in the case of an Electing Holder, a conformed copy) of such
Shelf Registration Statement, each such amendment and supplement thereto (in
each case excluding all exhibits thereto and documents incorporated by
reference therein unless specifically requested) and such number of copies of
such Shelf Registration Statement (excluding exhibits thereto and documents
incorporated by reference therein unless specifically so requested by such
Electing Holder, agent or underwriter, as the case may be) and of the
prospectus included in such Shelf Registration Statement (including each
preliminary prospectus and any summary prospectus), in conformity in all
material respects with the applicable requirements of the Securities Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder, and such other documents, as such Electing Holder, agent, if any,
and underwriter, if any, may reasonably request in order to facilitate the
offering and disposition of the Registrable Securities owned by such Electing
Holder, offered or sold by such agent or underwritten by such underwriter and
to permit such Electing Holder, agent and underwriter to satisfy the prospectus
delivery requirements of the Securities Act; and the Company hereby consents to
the use of such prospectus (including such preliminary and summary prospectus)
and any amendment or supplement thereto by each such Electing Holder and by any
such agent and underwriter, in each case in the form most recently provided to
such person by the Company, in connection with the offering and sale of the
Registrable Securities covered by the prospectus (including such preliminary
and summary prospectus) or any supplement or amendment thereto;

 

(xii)                             use its reasonable
best efforts to (A) register or qualify the Registrable Securities to be
included in such Shelf Registration Statement under such securities 

 

11

 

laws or blue sky laws
of such jurisdictions as any Electing Holder and each placement or sales agent,
if any, therefor and underwriter, if any, thereof shall reasonably request, (B) keep
such registrations or qualifications in effect and comply with such laws so as
to permit the continuance of offers, sales and dealings therein in such
jurisdictions during the period the Shelf Registration is required to remain
effective under Section 2(b) above and for so long as may be
necessary to enable any such Electing Holder, agent or underwriter to complete
its distribution of Securities pursuant to such Shelf Registration Statement (so
long as such distribution is commenced during the period during which the Shelf
Registration Statement is required to remain effective pursuant to Section 2(b))
and (C) take any and all other actions as may be reasonably necessary or
advisable to enable each such Electing Holder, agent, if any, and underwriter,
if any, to consummate the disposition in such jurisdictions of such Registrable
Securities; provided, however, that the Company shall not be required for any
such purpose to (1) qualify as a foreign corporation in any jurisdiction
wherein it would not otherwise be required to qualify but for the requirements
of this Section 3(d)(xii), (2) consent to general service of process
in any such jurisdiction, qualify as a dealer in securities in an jurisdiction
in which it is not so qualified or subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject or (3) make
any changes to its certificate of incorporation or bylaws or any agreement
between it and its stockholders;

 

(xiii)                          use its reasonable
best efforts to obtain the consent or approval of each governmental agency or
authority, whether federal, state or local, which may be required to effect the
Shelf Registration or the offering or sale in connection therewith or to enable
the selling holder or holders to offer, or to consummate the disposition of,
their Registrable Securities;

 

(xiv)                         unless any Registrable
Securities shall be in book-entry only form, cooperate with the Electing
Holders and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold, which certificates, if so required by any securities exchange upon
which any Registrable Securities are listed, shall be printed, lithographed or
engraved, or produced by any combination of such methods, on steel engraved
borders, and which certificates shall not bear any restrictive legends; and, in
the case of an underwritten offering, enable such Registrable Securities to be
in such denominations and registered in such names as the managing underwriters
may request at least two business days prior to any sale of the Registrable
Securities;

 

(xv)                            provide a CUSIP number
for all Registrable Securities, not later than the applicable Effective Time;

 

(xvi)                         enter into one or more
underwriting agreements, engagement letters, agency agreements, “best efforts”
underwriting agreements or similar agreements, as appropriate, including
customary provisions relating to indemnification and contribution, and take
such other actions in connection therewith as any Electing Holders aggregating
at least 20% in aggregate principal amount of the Registrable Securities at the
time outstanding shall request and as are customarily taken in order to
expedite or facilitate the disposition of such Registrable Securities;

 

12

 

(xvii)                      whether or not an
agreement of the type referred to in Section 3(d)(xvi) hereof is entered
into and whether or not any portion of the offering contemplated by the Shelf
Registration is an underwritten offering or is made through a placement or
sales agent or any other entity, (A) make such representations and
warranties to the Electing Holders and the placement or sales agent, if any,
therefor and the underwriters, if any, thereof in form, substance and scope as
are customarily made in connection with an offering of debt securities pursuant
to any appropriate agreement or to a registration statement filed on the form applicable
to the Shelf Registration; (B) obtain an opinion or opinions of counsel of
or to the Company in customary form and covering such matters, of the type
customarily covered by such an opinion, as the managing underwriters, if any,
or as any Electing Holders of at least 20% in aggregate principal amount of the
Registrable Securities at the time outstanding may reasonably request,
addressed to such Electing Holder or Electing Holders and the placement or
sales agent, if any, therefor and the underwriters, if any, thereof and dated
the effective date of such Shelf Registration Statement (and if such Shelf
Registration Statement contemplates an underwritten offering of a part or all
of the Registrable Securities, dated the date of the closing under the underwriting
agreement relating thereto) (it being agreed that the matters to be covered by
such opinions shall include the due formation and good standing of the Company
and certain of its subsidiaries; the due authorization, execution and delivery
of the relevant agreement of the type referred to in Section 3(d)(xvi)
hereof; the due authorization, execution, authentication and issuance, and the
validity and enforceability, of the Securities; the absence of material legal
or governmental proceedings involving the Company; the absence of a breach by
the Company or any of its subsidiaries of, or a default under, material
agreements binding upon the Company or any subsidiary of the Company as a
result of the contemplated transaction; the absence of certain governmental
approvals required to be obtained in connection with the Shelf Registration,
the offering and sale of the Registrable Securities, this Exchange and
Registration Rights Agreement or any agreement of the type referred to in Section 3(d)(xvi)
hereof, except such approvals as may be required under state securities or blue
sky laws; the material compliance as to form of such Shelf Registration
Statement and any documents incorporated by reference therein and of the
Indenture with the requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission thereunder,
respectively; and, a statement that as of the date of the opinion and of the
Shelf Registration Statement or most recent post-effective amendment thereto, as
the case may be, no facts have come to the attention to such counsel that would
lead such counsel to believe that such Shelf Registration Statement and the
prospectus included therein, as then amended or supplemented, and from the
documents incorporated by reference therein (in each case other than the
financial statements and other financial or reserve information contained
therein) of an untrue statement of a material fact or the omission to state
therein a material fact necessary to make the statements therein not misleading
(in the case of such documents, in the light of the circumstances existing at
the time that such documents were filed with the Commission under the Exchange
Act); provided, however, that such opinions may include customary qualifications
and limitations and shall not be materially more extensive in scope and content
than the opinions of counsel to or of the Company under the Purchase
Agreement); (C) obtain a “cold comfort” letter or letters from the
independent registered public accountants of the Company addressed to the
selling Electing Holders, the placement or sales agent, if any, therefor or the
underwriters, if any, thereof, dated (i) the effective date of such Shelf
Registration Statement and (ii) the effective date of any prospectus
supplement to the prospectus 

 

13

 

included in such Shelf
Registration Statement or post-effective amendment to such Shelf Registration
Statement which includes unaudited or audited financial statements as of a date
or for a period subsequent to that of the latest such statements included in
such prospectus (and, if such Shelf Registration Statement contemplates an
underwritten offering pursuant to any prospectus supplement to the prospectus
included in such Shelf Registration Statement or post-effective amendment to
such Shelf Registration Statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the latest such
statements included in such prospectus, dated the date of the closing under the
underwriting agreement relating thereto), such letter or letters to be in
customary form and covering such matters of the type customarily covered by
letters of such type; (D) deliver such documents and certificates,
including officers’ certificates, as may be reasonably requested by any
Electing Holders of at least 20% in aggregate principal amount of the
Registrable Securities at the time outstanding or the placement or sales agent,
if any, therefor and the managing underwriters, if any, thereof to evidence the
accuracy of the representations and warranties made pursuant to clause (A) above
or those contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (E) undertake
such obligations relating to expense reimbursement, indemnification and
contribution as are provided in Section 6 hereof;

 

(xviii)                   notify in writing each
holder of Registrable Securities affected thereby of any proposal by the
Company to amend or waive any provision of this Exchange and Registration
Rights Agreement pursuant to Section 9(h) hereof and of any amendment
or waiver effected pursuant thereto, each of which notices shall contain the
text of the amendment or waiver proposed or effected, as the case may be;

 

(xix)                           in the event that any
broker-dealer registered under the Exchange Act shall underwrite any
Registrable Securities or participate as a member of an underwriting syndicate
or selling group or “assist in the distribution” (within the meaning of the
Conduct Rules (the “Conduct Rules”) of the National Association of
Securities Dealers, Inc. (“NASD”) or any successor thereto, as amended
from time to time) thereof, whether as a holder of such Registrable Securities
or as an underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, assist such broker-dealer in complying with the
requirements of such Conduct Rules, including by (A) if such Conduct Rules shall
so require, engaging a “qualified independent underwriter” (as defined in such
Conduct Rules) to participate in the preparation of the Shelf Registration
Statement relating to such Registrable Securities, to exercise usual standards
of due diligence in respect thereto and, if any portion of the offering
contemplated by such Shelf Registration Statement is an underwritten offering
or is made through a placement or sales agent, to recommend the yield of such
Registrable Securities, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters provided in Section 6
hereof (or to such other customary extent as may be requested by such
underwriter) and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the requirements
of the Conduct Rules; and

 

(xx)                              comply with all
applicable rules and regulations of the Commission, and make generally
available to its securityholders as soon as practicable but in any event not
later than eighteen months after the effective date of such Shelf Registration 

 

14

 

Statement, an earning
statement of the Company and its subsidiaries complying with Section 11(a) of
the Securities Act (including, at the option of the Company, Rule 158
thereunder).

 

(e)                                  In the event that the
Company would be required, pursuant to Section 3(d)(viii)(F) above,
to notify the Electing Holders, the placement or sales agent, if any, therefor
and the managing underwriters, if any, thereof, the Company shall without
unreasonable delay prepare and furnish to each of the Electing Holders, to each
placement or sales agent, if any, and to each such underwriter, if any, a
reasonable number of copies of a prospectus supplemented or amended so that, as
thereafter delivered to purchasers of Registrable Securities, such prospectus
shall conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations
of the Commission thereunder and shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing.  Each
Electing Holder agrees that upon receipt of any notice from the Company
pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder shall
forthwith discontinue the disposition of Registrable Securities pursuant to the
Shelf Registration Statement applicable to such Registrable Securities until
such Electing Holder shall have received copies of such amended or supplemented
prospectus, and if so directed by the Company, such Electing Holder shall
deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies, then in such Electing Holder’s possession of the
prospectus covering such Registrable Securities at the time of receipt of such
notice.

 

(f)                                    In the event of a
Shelf Registration, in addition to the information required to be provided by
each Electing Holder in its Notice Questionnaire, the Company may require such
Electing Holder to furnish to the Company such additional information regarding
such Electing Holder and such Electing Holder’s intended method of distribution
of Registrable Securities as may be required in order to comply with the
Securities Act. Each such Electing Holder agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Electing Holder to the Company or of the occurrence of any
event in either case as a result of which any prospectus relating to such Shelf
Registration contains or would contain an untrue statement of a material fact
regarding such Electing Holder or such Electing Holder’s intended method of
disposition of such Registrable Securities or omits to state any material fact
regarding such Electing Holder or such Electing Holder’s intended method of
disposition of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish to the Company any
additional information required to correct and update any previously furnished
information or required so that such prospectus shall not contain, with respect
to such Electing Holder or the disposition of such Registrable Securities, an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing.

 

(g)                                 Until the expiration
of two years after the Closing Date or such earlier time as no Registrable
Securities are outstanding, the Company will not, and will not permit any of
its “affiliates” (as defined in Rule 144) to, resell any of the Securities
which constitute “restricted securities” under Rule 144 that have been
reacquired by any of them except pursuant to an effective registration
statement under the Securities Act.

 

15

 

(h)                                 Notwithstanding any
provision of this Exchange and Registration Rights Agreement to the contrary,
in the event of a potential acquisition or business combination or other
transaction, business development or event involving the Company that may
require disclosure in an Exchange Registration Statement or a Shelf
Registration Statement, if the Company shall determine in the exercise of its reasonable
judgment that disclosure of such potential acquisition or business combination
or other transaction, business development or event is not in the best
interests of the Company or that obtaining any financial statements relating to
an acquisition or business combination required to be included in such
registration statement would be impracticable, the Company shall have the right
to suspend the effectiveness of such registration statement for no more than
two periods, each of up to 60 consecutive days (each, a “Suspension Period”),
during any 365-day period, provided that no such registration statement may be
suspended for more than an aggregate of 75 days in any 12-month period. In any
such event, the Company shall promptly notify each broker-dealer eligible to
use the prospectus in the Exchange Offer Registration Statement in connection
with resales of Exchange Securities held by it and, if applicable, each
Electing Holder eligible to resell Securities under a Shelf Registration
Statement, of the suspension of the effectiveness of such registration
statement, provided that the Company shall not be required to disclose in such
notice the possible acquisition or business combination or other transaction,
business development or event if it determines in good faith that such
disclosure would not be in the best interests of the Company.  Any Suspension Period shall terminate upon
the later of (i) the abandonment, consummation or termination of such
acquisition or business combination or other transaction, business development
or event or the availability of the required financial statements with respect
to a possible acquisition or business combination and (ii) any required
amendment or supplement to such registration statement, and the Company shall
promptly notify broker-dealers eligible to use the prospectus in the Exchange
Offer Registration Statement in connection with resales of Exchange Securities
held by them and, if applicable, Electing Holders eligible to resell Securities
under a Shelf Registration Statement, that the use of the prospectus contained
in such registration statement, as amended or supplemented, may resume. The
Company shall provide sufficient copies of the most recent version of such
prospectus to broker-dealers holding Exchange Securities eligible to use the
prospectus in the Exchange Offer Registration Statement in connection with
resales of Exchange Securities held by them and, if applicable, Electing
Holders eligible to resell Securities under a Shelf Registration Statement,
promptly upon written request, and in no event later than three business days
after such request.

 

4.                                       Registration Expenses.  The Company agrees to bear and to pay or
cause to be paid promptly all expenses incident to the Company’s performance of
or compliance with this Exchange and Registration Rights Agreement, including (a) all
Commission and any NASD registration, filing and review fees and expenses
including reasonable fees and disbursements of not more than one counsel for
the placement or sales agent or underwriters in connection with such
registration, filing and review, (b) all fees and expenses in connection
with the qualification of the Securities for offering and sale under the State
securities and blue sky laws referred to in Section 3(d)(xii) hereof and
determination of their eligibility for investment under the laws of such
jurisdictions as any managing underwriters or the Electing Holders may
designate, including any reasonable fees and disbursements of not more than one
counsel for the Electing Holders or underwriters in connection with such
qualification and determination, (c) all expenses relating to the
preparation, printing, production, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the expenses of preparing the Securities for
delivery and the expenses of printing or producing any 

 

16

 

underwriting
agreements, agreements among underwriters, selling agreements and blue sky or
legal investment memoranda and all other documents in connection with the
offering, sale or delivery of Securities to be disposed of (including
certificates representing the Securities), (d) messenger, telephone and
delivery expenses relating to the offering, sale or delivery of Securities and
the preparation of documents referred in clause (c) above, (e) fees
and expenses of the Trustee under the Indenture, any agent of the Trustee and
any counsel for the Trustee and of any collateral agent or custodian, (f) internal
expenses of the Company (including all salaries and expenses of the Company’s
officers and employees performing legal or accounting duties), (g) fees,
disbursements and expenses of counsel, reservoir engineers and independent
certified public accountants of the Company (including the expenses of any
opinions or “cold comfort” letters required by or incident to such performance
and compliance), (h) reasonable fees, disbursements and expenses of any “qualified
independent underwriter” engaged pursuant to Section 3(d)(xix) hereof and
of one counsel for the Electing Holders retained in connection with a Shelf
Registration, as selected by the Electing Holders of at least a majority in
aggregate principal amount of the Registrable Securities held by Electing
Holders (which counsel shall be reasonably satisfactory to the Company), (i) any
fees charged by securities rating services for rating the Securities, and (j)
fees, expenses and disbursements of any other persons, including special
experts, retained by the Company in connection with such registration
(collectively, the “Registration Expenses”). To the extent that any
Registration Expenses are reasonably incurred, assumed or paid by any holder of
Registrable Securities or any placement or sales agent therefor or underwriter
thereof, the Company shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a
request therefor. Notwithstanding the foregoing, the holders of the Registrable
Securities being registered shall pay all agency fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Registrable Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
the counsel and experts specifically referred to above.

 

5.                                      Representations and Warranties.  The Company represents and warrants to, and
agrees with, each Purchaser and each of the holders from time to time of
Registrable Securities that:

 

(a)                                  Each registration
statement covering Registrable Securities and each prospectus (including any
preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(d) or
Section 3(c) hereof and any further amendments or supplements to any
such registration statement or prospectus, when it becomes effective or is
filed with the Commission, as the case may be, and, in the case of an
underwritten offering of Registrable Securities, at the time of the closing
under the underwriting agreement relating thereto, will conform in all material
respects to the requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at all times subsequent to the Effective Time when a prospectus
would be required to be delivered under the Securities Act, other than from (i) such
time as a notice has been given to holders of Registrable Securities pursuant
to Section 3(d)(viii)(F) or Section 3(c)(iii)(F) hereof
until (ii) such time as the Company furnishes an amended or supplemented
prospectus pursuant to Section 3(e) or Section 3(c)(iv) hereof,
each such registration statement, and each prospectus (including any summary
prospectus) contained therein or furnished pursuant to Section 3(d) or
Section 3(c) hereof, as then amended or supplemented, will conform in
all material respects to the requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission 

 

17

 

thereunder
and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by a holder of Registrable
Securities expressly for use therein.

 

(b)                                 Any documents
incorporated by reference in any prospectus referred to in Section 5(a) hereof,
when they become or became effective or are or were filed with the Commission,
as the case may be, will conform or conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and none
of such documents will contain or contained an untrue statement of a material
fact or will omit or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a holder of Registrable Securities
expressly for use therein.

 

(c)                                  The compliance by the
Company with all of the provisions of this Exchange and Registration Rights
Agreement and the consummation of the transactions herein contemplated will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any subsidiary
of the Company is a party or by which the Company or any subsidiary of the
Company is bound or to which any of the property or assets of the Company or
any subsidiary of the Company is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or the bylaws
of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any subsidiary of the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Exchange and Registration
Rights Agreement, except the registration under the Securities Act of the
Securities, qualification of the Indenture under the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications as
may be required under State securities or blue sky laws in connection with the
offering and distribution of the Securities.

 

(d)                                 This Exchange and
Registration Rights Agreement has been duly authorized, executed and delivered
by the Company.

 

6.                                       Indemnification.

 

(a)                                  Indemnification
by the Company.
The Company will indemnify and hold harmless each of the holders of Registrable
Securities included in an Exchange Registration Statement, each of the Electing
Holders of Registrable Securities included in a Shelf Registration Statement
and each person who participates as a placement or sales agent or as an
underwriter in any offering or sale of such Registrable Securities against any
losses, claims, damages or liabilities, joint or several, to which such holder,
agent or underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Exchange Registration Statement

 

18

 

or
Shelf Registration Statement, as the case may be, under which such Registrable
Securities were registered under the Securities Act, or any preliminary, final
or summary prospectus contained therein or furnished by the Company to any such
holder, Electing Holder, agent or underwriter, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse such holder,
such Electing Holder, such agent and such underwriter for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such person in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, or preliminary, final or
summary prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by such person
expressly for use therein; provided, further, that the Company shall not be
liable for any losses, claims, damages or liabilities arising out of any offer
or sale during any Suspension Period with respect to which the Company provided
notice in accordance with Section 3(h).

 

(b)                                 Indemnification
by the Holders and any Agents and Underwriters. The Company may require, as a condition
to including any Registrable Securities in any registration statement filed pursuant
to Section 2(b) hereof and to entering into any underwriting
agreement with respect thereto, that the Company shall have received an
undertaking reasonably satisfactory to it from the Electing Holder of such
Registrable Securities and from each underwriter named in any such underwriting
agreement, severally and not jointly, to (i) indemnify and hold harmless
the Company and all other holders of Registrable Securities, against any
losses, claims, damages or liabilities to which the Company or such other
holders of Registrable Securities may become subject, jointly or severally
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained in
such registration statement, or any preliminary, final or summary prospectus
contained therein or furnished by the Company to any such Electing Holder,
agent or underwriter, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Electing Holder or underwriter expressly for use
therein, and (ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that no such Electing Holder shall be required to undertake liability
to any person under this Section 6(b) for any amounts in excess of
the dollar amount of the proceeds to be received by such Electing Holder from
the sale of such Electing Holder’s Registrable Securities pursuant to such
registration.

 

(c)                                  Notices
of Claims, Etc.
Promptly after receipt by an indemnified party under subsection (a) or
(b) above of written notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party pursuant to the indemnification provisions of or
contemplated by this Section 6, notify such indemnifying party in writing
of the commencement of such action; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified 

 

19

 

party
(to the extent it is not materially prejudiced as a result thereof) otherwise
than under the indemnification provisions of or contemplated by Section 6(a) or
6(b) hereof. In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying party of the commencement
thereof, such indemnifying party shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, such indemnifying party shall not be liable to
such indemnified party for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.  No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out
of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

 

(d)                                 Contribution. If for any reason
the indemnification provisions contemplated by Section 6(a) or Section 6(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were determined by pro
rata allocation (even if the holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 6(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no holder shall be required to contribute
any amount in excess of the amount by which the dollar amount of the proceeds
received by such holder from the sale of any Registrable Securities (after
deducting any fees, discounts and commissions applicable thereto) exceeds the
amount of any damages which such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and no underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such underwriter has otherwise
been required to pay by reason

 

20

 

of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The holders’ and any
underwriters’ obligations in this Section 6(d) to contribute shall be
several in proportion to the principal amount of Registrable Securities
registered or underwritten, as the case may be, by them and not joint.

 

(e)                                  The obligations of the
Company under this Section 6 shall be in addition to any liability which
the Company may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and partner of each holder, agent and
underwriter and each person, if any, who controls any holder, agent or
underwriter within the meaning of the Securities Act; and the obligations of
the holders and any agents or underwriters contemplated by this Section 6
shall be in addition to any liability which the respective holder, agent or
underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his consent, is named in any registration statement as about to
become a director of the Company) and to each person, if any, who controls the Company
within the meaning of the Securities Act.

 

7.                                       Underwritten Offerings.

 

(a)                                  Selection
of Underwriters.
If any of the Registrable Securities covered by the Shelf Registration are to
be sold pursuant to an underwritten offering, the managing underwriter or
underwriters thereof shall be designated by Electing Holders holding at least a
majority in aggregate principal amount of the Registrable Securities to be
included in such offering, provided that such designated managing underwriter
or underwriters is or are reasonably acceptable to the Company.

 

(b)                                 Participation
by Holders.
Each holder of Registrable Securities hereby agrees with each other such holder
that no such holder may participate in any underwritten offering hereunder
unless such holder (i) agrees to sell such holder’s Registrable Securities
on the basis provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

 

8.                                      Rule 144. The Company covenants to
take such action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act
within the limitations of the exemption provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any
similar or successor rule or regulation hereafter adopted by the
Commission. Upon the request of any holder of Registrable Securities in
connection with that holder’s sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.

 

9.                                       Miscellaneous.

 

(a)                                  No
Inconsistent Agreements.  The Company represents, warrants, covenants
and agrees that it has not granted, and shall not grant, registration rights
with respect to Registrable Securities or any other securities which would be
inconsistent with the terms contained in this Exchange and Registration Rights
Agreement.

 

21

 

(b)                                 Specific
Performance.  The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the holders from time to time
of the Registrable Securities may be irreparably harmed by any such failure, and
accordingly agree that the Purchasers and such holders, in addition to any
other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of the Company under
this Exchange and Registration Rights Agreement in accordance with the terms
and conditions of this Exchange and Registration Rights Agreement, in any court
of the United States or any State thereof having jurisdiction.

 

(c)                                  Notices.  All notices, requests, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, if delivered personally or by
courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested) as follows:

 

(1)                                  if to a holder, to the
address of such holder set forth in the security register or other records of
the Company, or to such other address as the Company or any such holder may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.

 

(2)                                  if to the Company:

 

Pogo Producing Company

5 Greenway Plaza, Suite 2700

Houston, Texas 77046

Attention: General Counsel

 

with a copy to:

 

Baker Botts L.L.P.

One Shell Plaza

Houston, Texas 77002

Attention: Stephen Massad

 

(3)                                  if to the Purchasers:

 

Goldman, Sachs & Co.

85 Broad Street

New York, New York 10004

Attention: Ray Strong

 

with a copy to:

 

Vinson & Elkins
L.L.P.

First City Tower

1001 Fannin, Suite 2300

Houston, Texas 77002

Attention: T. Mark Kelly

 

22

 

(d)                                 Parties
in Interest.  All the terms and provisions of this Exchange
and Registration Rights Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the parties hereto and the holders from
time to time of the Registrable Securities and the respective successors and
assigns of the parties hereto and such holders. In the event that any
transferee of any holder of Registrable Securities shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, without any further writing or action of
any kind, be deemed a beneficiary hereof for all purposes and such Registrable
Securities shall be held subject to all of the terms of this Exchange and
Registration Rights Agreement, and by taking and holding such Registrable
Securities such transferee shall be entitled to receive the benefits of, and be
conclusively deemed to have agreed to be bound by all of the applicable terms
and provisions of this Exchange and Registration Rights Agreement. If the
Company shall so request, any such successor, assign or transferee shall agree
in writing to acquire and hold the Registrable Securities subject to all of the
applicable terms hereof.

 

(e)                                  Survival.  The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Exchange
and Registration Rights Agreement or made pursuant hereto shall remain in full
force and effect regardless of any investigation (or statement as to the
results thereof) made by or on behalf of any holder of Registrable Securities,
any director, officer or partner of such holder, any agent or underwriter or
any director, officer or partner thereof, or any controlling person of any of
the foregoing, and shall survive delivery of and payment for the Registrable
Securities pursuant to the Purchase Agreement and the transfer and registration
of Registrable Securities by such holder and the consummation of an Exchange
Offer.

 

(f)                                    Governing Law.  This
Exchange and Registration Rights Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

 

(g)                                 Headings.  The descriptive headings of the several
Sections and paragraphs of this Exchange and Registration Rights Agreement are
inserted for convenience only, do not constitute a part of this Exchange and
Registration Rights Agreement and shall not affect in any way the meaning or
interpretation of this Exchange and Registration Rights Agreement.

 

(h)                                 Entire
Agreement; Amendments.  This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the Indenture
and the form of Securities) or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Exchange and Registration Rights Agreement supersedes all
prior agreements and understandings between the parties with respect to their
subject matter. This Exchange and Registration Rights Agreement may be amended
and the observance of any term of this Exchange and Registration Rights
Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) only by a written instrument duly
executed by the Company and the holders of at least a majority in aggregate
principal amount of the Registrable Securities at the time outstanding. Each
holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any amendment or waiver effected pursuant to this Section 9(h),
whether or not any notice, writing or marking indicating such amendment or
waiver appears on such Registrable Securities or is delivered to such holder.

 

(i)                                     Inspection.  For so long as this Exchange and Registration
Rights Agreement shall be in effect, this Exchange and Registration Rights
Agreement and a complete list of the 

 

23

 

names
and addresses of all the holders of Registrable Securities shall be made
available for inspection and copying on any business day by any holder of
Registrable Securities for proper purposes only (which shall include any
purpose related to the rights of the holders of Registrable Securities under
the Securities, the Indenture and this Agreement) at the offices of the Company
at the address thereof set forth in Section 9(c) above and at the
office of the Trustee under the Indenture.

 

(j)                                     Counterparts.  This agreement may be executed by the parties
in counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.

 

24

 

If the foregoing is in accordance with your understanding,
please sign and return to us five counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Purchasers, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Purchasers and the Company.  It is
understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among Purchasers,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  Pogo
  Producing Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Ulm, II

  
	
   

  	
   

  	
  James P. Ulm, II

  
	
   

  	
   

  	
  Senior Vice President and Chief

  
	
   

  	
   

  	
  Financial Officer

  

 

	
  Accepted
  as of the date hereof:

  
	
  Goldman,
  Sachs & Co.

  
	
    As
  representative of the several Purchasers

  
	
   

  
	
   

  
	
  By:

  	
      /s/
  Goldman, Sachs & Co.

  	
   

  
	
   

  	
     (Goldman,
  Sachs & Co.)

  

 

25

 

Exhibit A

 

Pogo
Producing Company

 

INSTRUCTION
TO DTC PARTICIPANTS

 

[                        ],
2005

 

URGENT - IMMEDIATE ATTENTION REQUESTED

 

DEADLINE
FOR RESPONSE:  [DATE]*

 

The Depository Trust Company (“DTC”) has
identified you as a DTC Participant through which beneficial interests in Pogo
Producing Company (the “Company”) $500,000,000 principal amount of 6.875% Senior
Subordinated Notes due 2017 (the “Securities”) are held.

 

The Company is in the process of
registering the Securities under the Securities Act of 1933 for resale by the
beneficial owners thereof.  In order to
have their Securities included in the registration statement, beneficial owners
must complete and return the enclosed Notice of Registration Statement and
Selling Securityholder Questionnaire.

 

It is important that beneficial owners of
the Securities receive a copy of the enclosed materials as soon as possible as their rights to
have the Securities included in the registration statement depend upon their
returning the Notice and Questionnaire by [Deadline
For Response].  Please forward
a copy of the enclosed documents to each beneficial owner that holds interests
in the Securities through you.  If you
require more copies of the enclosed materials or have any questions pertaining
to this matter, please contact Investor Relations, Pogo Producing Company, 5
Greenway Plaza, Suite 2700, Houston, Texas 77046 (telephone:
713.297.5000).

 

*  Not less than 28 calendar days from date of
mailing.

 

A-1

 

Pogo Producing Company

 

Notice
of Registration Statement

and

Selling Securityholder Questionnaire

 

[                        ],
2005

 

Reference is hereby made to the Exchange
and Registration Rights Agreement (the “Exchange and Registration Rights Agreement”)
between Pogo Producing Company (the “Company”) and each of the Purchasers named
therein.  Pursuant to the Exchange and
Registration Rights Agreement, the Company has filed with the United States
Securities and Exchange Commission (the “Commission”) a registration statement
on Form S-3 (the “Shelf Registration Statement”) for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities
Act”), of $500,000,000 principal amount of the Company’s 6.875% Senior Subordinated
Notes due 2017 (the “Securities”).  A
copy of the Exchange and Registration Rights Agreement is attached hereto.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Exchange and
Registration Rights Agreement.

 

Each beneficial owner of Registrable
Securities (as defined below) is entitled to have the Registrable Securities
beneficially owned by it included in the Shelf Registration Statement.  In order to have Registrable Securities
included in the Shelf Registration Statement, this Notice of Registration
Statement and Selling Securityholder Questionnaire (“Notice and Questionnaire”)
must be completed, executed and delivered to the Company’s counsel at the
address set forth herein for receipt ON OR BEFORE [Deadline for Response]. 
Beneficial owners of Registrable Securities who do not complete, execute
and return this Notice and Questionnaire by such date (i) will not be
named as selling securityholders in the Shelf Registration Statement and (ii) may
not use the Prospectus forming a part thereof for resales of Registrable
Securities.

 

Certain legal consequences arise from
being named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.  Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their
own securities law counsel regarding the consequences of being named or not
being named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.

 

The term “Registrable Securities”
is defined in the Exchange and Registration Rights Agreement.

 

A-2

 

ELECTION

 

The undersigned holder (the “Selling
Securityholder”) of Registrable Securities hereby elects to include in the
Shelf Registration Statement the Registrable Securities beneficially owned by
it and listed below in Item (3).  The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Exchange and Registration
Rights Agreement, including, without limitation, Section 6 of the Exchange
and Registration Rights Agreement, as if the undersigned Selling Securityholder
were an original party thereto.

 

Upon any sale of Registrable Securities
pursuant to the Shelf Registration Statement, the Selling Securityholder will
be required to deliver to the Company and Trustee the Notice of Transfer set
forth in Appendix A to the Prospectus and as Exhibit B to the Exchange and
Registration Rights Agreement.

 

The Selling Securityholder hereby
provides the following information to the Company and represents and warrants
that such information is accurate and complete:

 

A-3

 

QUESTIONNAIRE

 

(1)                                  (a)                                  Full Legal Name of
Selling Securityholder:

 

 

(b)                                 Full Legal Name of Registered Holder (if not the
same as in (a) above) of Registrable Securities Listed in Item (3) below:

 

 

(c)                                  Full Legal Name of DTC Participant (if
applicable and if not the same as (b) above) Through Which Registrable
Securities Listed in Item (3) below are Held:

 

 

(2)                                  Address for Notices to
Selling Securityholder:

 

 

 

 

Telephone:

Fax:

Contact
Person:

 

(3)                                  Beneficial Ownership
of Securities:

 

Except as set forth below in this Item
(3), the undersigned does not beneficially own any Securities.

 

(a)                                  Principal amount of Registrable Securities
beneficially owned:                             

 

CUSIP No(s).
of such Registrable Securities:                                                  

 

(b)                                 Principal amount of Securities other than
Registrable Securities beneficially owned:                   

 

CUSIP No(s).
of such other Securities:                                              

 

(c)                                  Principal amount of Registrable Securities which
the undersigned wishes to be included in the Shelf Registration Statement:                               

 

CUSIP No(s). of such Registrable Securities to be included
in the Shelf Registration Statement:                        

 

 

(4)                                  Beneficial Ownership of Other Securities of the
Company:

 

Except as set forth below in this Item
(4), the undersigned Selling Securityholder is not the beneficial or registered
owner of any other securities of the Company, other than the Securities listed
above in Item (3).

 

A-4

 

State any
exceptions here:

 

(5)                                  Relationships with the Company:

 

Except as set forth below, neither the
Selling Securityholder nor any of its affiliates, officers, directors or
principal equity holders (5% or more) has held any position or office or has
had any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.

 

State any
exceptions here:

 

(6)                                  Plan of Distribution:

 

Except as set forth below, the undersigned
Selling Securityholder intends to distribute the Registrable Securities listed
above in Item (3) only as follows (if at all):  Such Registrable Securities may be sold from
time to time directly by the undersigned Selling Securityholder or,
alternatively, through underwriters, broker-dealers or agents.  Such Registrable Securities may be sold in
one or more transactions at fixed prices, at prevailing market prices at the time
of sale, at varying prices determined at the time of sale, or at negotiated
prices.  Such sales may be effected in
transactions (which may involve crosses or block transactions) (i) on any
national securities exchange or quotation service on which the Registered
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv) through
the writing of options.  In connection
with sales of the Registrable Securities or otherwise, the Selling
Securityholder may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the Registrable Securities in the course
of hedging the positions they assume. 
The Selling Securityholder may also sell Registrable Securities short
and deliver Registrable Securities to close out such short positions, or loan
or pledge Registrable Securities to broker-dealers that in turn may sell such
securities.

 

State any
exceptions here:

 

By signing below, the Selling
Securityholder acknowledges that it understands its obligation to comply, and
agrees that it will comply, with the provisions of the Exchange Act and the rules and
regulations thereunder, particularly Regulation M.

 

In the event that the Selling
Securityholder transfers all or any portion of the Registrable Securities
listed in Item (3) above after the date on which such information is
provided to the Company, the Selling Securityholder agrees to notify the
transferee(s) at the time of the transfer of its rights and obligations under
this Notice and Questionnaire and the Exchange and Registration Rights
Agreement.

 

By signing below, the Selling
Securityholder consents to the disclosure of the information contained herein
in its answers to Items (1) through (6) above and the inclusion of
such 

 

A-5

 

information in the Shelf Registration
Statement and related Prospectus.  The
Selling Securityholder understands that such information will be relied upon by
the Company in connection with the preparation of the Shelf Registration
Statement and related Prospectus.

 

In accordance with the Selling
Securityholder’s obligation under Section 3(d) of the Exchange and
Registration Rights Agreement to provide such information as may be required by
law for inclusion in the Shelf Registration Statement, the Selling
Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the date
hereof at any time while the Shelf Registration Statement remains in
effect.  All notices hereunder and
pursuant to the Exchange and Registration Rights Agreement shall be made in
writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight
delivery as follows:

 

(i)                                     To the Company:

 

Pogo Producing Company

5 Greenway Plaza, Suite 2700

Houston, Texas 77046

Attention: General Counsel

 

(ii)                                  with a copy to:

 

Baker Botts L.L.P.

One Shell Plaza

Houston, Texas 77002

Attention: Stephen Massad

 

Once this Notice and Questionnaire is
executed by the Selling Securityholder and received by the Company’s counsel,
the terms of this Notice and Questionnaire, and the representations and
warranties contained herein, shall be binding on, shall inure to the benefit of
and shall be enforceable by the respective successors, heirs, personal
representatives, and assigns of the Company and the Selling Securityholder
(with respect to the Registrable Securities beneficially owned by such Selling
Securityholder and listed in Item (3) above).  This Agreement shall be governed in all
respects by the laws of the State of New York.

 

A-6

 

IN WITNESS WHEREOF, the undersigned, by
authority duly given, has caused this Notice and Questionnaire to be executed
and delivered either in person or by its duly authorized agent.

 

	
  Dated:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Selling
  Securityholder

  
	
  (Print/type full legal name of
  beneficial owner

  
	
   of Registrable Securities)

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
    Name:

  	
   

  	
   

  
	
    Title:

  	
   

  	
   

  
							

 

PLEASE RETURN THE COMPLETED AND EXECUTED
NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY’S COUNSEL AT:

 

 

 

 

 

A-7

 

Exhibit B

 

NOTICE
OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

 

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

Pogo
Producing Company

c/o
The Bank of New York Trust Company, N.A.

600
Pearl Street, Suite 420

Dallas,
Texas 75201

 

Attention:  Trust Officer

 

Re:                               Pogo Producing Company
(the “Company”) $500,000,000 Principal Amount of 6.875% Senior Subordinated
Notes due 2017

 

Dear Sirs:

 

Please be advised that
                                                                has
transferred $                          aggregate
principal amount of the above-referenced Notes pursuant to an effective
Registration Statement on Form [      ]
(File No. 333-                  )
filed by the Company.

 

We hereby certify that the prospectus
delivery requirements, if any, of the Securities Act of 1933, as amended, have
been satisfied and that the above-named beneficial owner of the Notes is named
as a “Selling Holder” in the Prospectus dated [date]
or in supplements thereto, and that the aggregate principal amount of the Notes
transferred are the Notes listed in such Prospectus opposite such owner’s name.

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized
  Signature)

  
				

 

B-1

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